Every dollar directed toward green finance carries a promise, but does it deliver? This study tests whether corporate green bond issuance translates into measurable improvements in firm-level high-quality development, which is defined as the enhancement of firms’ sustainable growth capacity and resource allocation efficiency and is proxied by total factor productivity (TFP), a widely adopted indicator of development quality in the economics literature. Using panel data from Shanghai and Shenzhen A-share listed enterprises over 2014–2024, we employ a multi-period difference-in-differences framework, validated by parallel trend and placebo tests, to identify the causal effect of green bond issuance. Results confirm a significant positive impact, with green bond issuance raising firm TFP by 0.240 units, representing a substantial improvement in firms’ productivity performance relative to the sample average, robust across Olley–Pakes, Levinsohn–Petrin, and propensity score matched specifications. Mechanism analysis identifies three transmission channels: green technological innovation and green management practices operate as partial mediators, while financing constraints serve as a mediator. Heterogeneity tests reveal stronger effects among firms with higher agency costs, heavier pollution burdens, and those located in eastern China’s more marketized regions. By uncovering the productivity-enhancing mechanisms of green bond issuance, this study enriches the literature on sustainable finance and corporate high-quality development and provides new firm-level evidence on the economic consequences of green financial instruments. These findings provide micro-level evidence that green finance generates tangible productivity gains beyond signaling, offering actionable guidance for policymakers advancing sustainable corporate development under China’s dual carbon targets.
Wang et al. (2026) studied this question.