From referee to player: how green public procurement reshapes the logic of firm greenwashing

This article examines whether green public procurement (GPP) reduces firm greenwashing among Chinese A-share listed companies from 2010 to 2023. Using a staggered difference-in-differences design on 21,253 firm-year observations, we find that GPP participation significantly reduces firm greenwashing. This effect operates through a legitimacy acquisition mechanism that reduces incentives for opportunistic signalling and a resource acquisition mechanism that alleviates financial constraints on substantive environmental investment. Environmental violations attenuate the GPP effect, whereas green institutional investor ownership amplifies it. Results are robust to propensity-score-matched estimation, placebo tests, Bartik-style instrumental variables, an alternative greenwashing measure, and Oster’s omitted-variable sensitivity test. These findings extend the greenwashing literature by showing that governments can discipline symbolic–substantive decoupling through market-based procurement, not only through coercive regulation.