Digital Government and Corporate Green Total Factor Productivity: Evidence from Chinese Listed Industrial Firms

Industrial sustainability depends on cleaner production and more efficient resource use. This study examines whether local digital government development is associated with faster growth in the green total factor productivity of industrial firms, and which corporate decisions change alongside it. We use annual data on Chinese listed industrial firms from 2017 to 2023. Matching annual corporate records to a city-level digital government index, we find that a one standard deviation increase in the index raises the annual green productivity growth index by 0.0253, equivalent to 16.6% of its standard deviation. Two mechanisms are at work. Digital government promotes green innovation: green invention applications become more frequent and account for a larger share of green patent applications. It also disciplines investment: the capital expenditure rate declines and investment deviation narrows, consistent with less overinvestment. The relationship is stronger with greater telecommunications activity, broader financial service coverage, higher earnings retention, and more stable management, and weaker with greater stock forum sentiment dispersion. Digital public services thus support sustainable industrial transformation through green innovation and more efficient capital allocation, linking digital government policy to the cleaner production and resource efficiency goals of sustainable development.