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The role of government green procurement in green firm entry: Evidence from 285 cities

Author

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  • Ye, Huiying
  • Xue, Yan
  • Wu, Haitao
  • Hu, Dongmei

Abstract

Green firm entry serves as a vital force for economic green transformation and industrial upgrading. Through theoretical derivation and empirical analysis, we explore the multifaceted impacts of government green procurement on green firm entry. The findings reveal that government green procurement significantly promotes the market entry of green firms, which remains robust after addressing endogeneity concerns and a series of rigorous tests. Heterogeneity analysis indicates that the effect of government green procurement varies significantly across different institutional environments and geographical characteristics. The promoting effect is more pronounced in regions with high fiscal transparency, high levels of proactive government development, healthy government-business relationships, high regional policy coordination, as well as in non-resource-based cities. Mechanism tests reveal that government green procurement promotes green firm entry through dual demand- and supply-side pathways, stimulating market green consumption on the demand side and facilitating green technology research and application on the supply side.

Suggested Citation

  • Ye, Huiying & Xue, Yan & Wu, Haitao & Hu, Dongmei, 2026. "The role of government green procurement in green firm entry: Evidence from 285 cities," Structural Change and Economic Dynamics, Elsevier, vol. 79(C), pages 375-385.
    • Handle: RePEc:eee:streco:v:79:y:2026:i:c:p:375-385
    DOI: 10.1016/j.strueco.2026.05.014
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