Can Green Product Design Promote Corporate ESG Performance? Evidence from China

As a core component in constructing a green manufacturing system, green product design has become an essential strategy for promoting enterprises’ green transformation. This study aims to investigate the causal impact of green product design implementation on corporate environmental, social, and governance (ESG) performance, addressing a critical gap in understanding how design-level interventions drive sustainable development. Based on panel data of China’s A-share listed firms from 2015 to 2022, this study employs the officially released list of green product design enterprises as a quasi-natural experiment and applies a multi-period difference-in-differences model to address this research objective. The empirical results show that, first, green product design significantly and robustly enhances corporate ESG performance. Second, mechanism analysis reveals that green product design promotes ESG performance mainly through three channels: driving green technological innovation, optimizing supply chain governance, and improving operational efficiency. Third, heterogeneity analysis shows that the positive impact is more pronounced in regions with a higher degree of marketization, in firms with lower financing constraints, and in firms receiving greater media attention. This research contributes novel insights by establishing a comprehensive analytical framework that integrates multiple transmission mechanisms and contextual moderators, thereby advancing the theoretical understanding of green design efficacy. This study not only provides micro-level empirical evidence for the effectiveness of the green manufacturing system but also offers important implications for policymakers and enterprises aiming to achieve sustainable development through green design practices.