The Impact of the New Energy Demonstration City Policy on Corporate Green Transformation: Double Machine Learning Evidence from Chinese Listed Companies

Amid ongoing adjustments to its energy structure and increasingly stringent sustainability requirements, China has promoted the New Energy Demonstration City (NEDC) initiative to expand renewable-energy use and explore pathways for green and low-carbon development. Using a 2010–2024 panel of Chinese A-share listed companies, this study applies partial-linear double machine learning (PL-DML) to examine the effects of the NEDC policy on corporate green transformation. The results indicate that the policy significantly promotes corporate green transformation, and this finding remains robust across multiple identification and sensitivity checks. After policy implementation, firms exhibit significantly lower financing constraints and higher internal-control quality. Combined with prior evidence linking financing conditions and governance quality to green transformation, these findings support two potential channels: improved external resource conditions and more efficient internal governance. Policy responses vary significantly across industry attributes, city characteristics, and governance settings and are stronger among firms with higher total factor productivity. Corporate green transformation is also positively associated with employment growth and negatively associated with the operating cycle. Overall, the NEDC policy has a robust positive effect on corporate green transformation, with substantial contextual heterogeneity and links to broader corporate sustainability outcomes.