Research on the Impact Mechanism of Green Public Funds on the Synergistic Effect of Pollution Reduction and Carbon Mitigation in the Manufacturing Industry

Yuelan Ping; Yitian Jiang; Yilan Huang; Maisha Liang

doi:10.54691/qqvtq195

Authors

Yuelan Ping
Yitian Jiang
Yilan Huang
Maisha Liang

DOI:

https://doi.org/10.54691/qqvtq195

Keywords:

Green Public Funds, Synergistic Effects of Pollution Reduction and Carbon Emission Reduction, PSM-DID Test.

Abstract

China is pushing hard to link green finance with the green transformation of manufacturing. This is a big strategic priority. Green public funds play an important role here. They act as a key market-driven investment force. Still, how exactly they affect pollution reduction and carbon emission mitigation in manufacturing isn’t fully clear. Their impact mechanisms need systematic clarification. Their transmission pathways also call for empirical examination. This study looks at companies listed on China’s A-share market in the manufacturing sector. These firms held shares in green public funds between 2015 and 2022. The research focus on how that fund ownership shaped coordinated pollution control and carbon reduction. It maps out the key influence mechanisms step by step. It also traces the actual transmission pathways - how effects moved from fund holding to real-world outcomes. Initially, it is presumed the link works mainly through capital allocation signals. But subsequent analysis revealed other channels mattered too - like governance spillovers and peer benchmarking. The whole picture came together only after unpacking each piece separately. The findings show that green public fund holdings boost the combined impact of pollution control and carbon reduction in manufacturing firms. The effect isn’t uniform across all firms. It’s especially strong for non-state-owned enterprises. It also stands out among heavily polluting companies. Another thing worth mentioning: firms in eastern and western regions show this boost too. Initially, it is presumed that ownership type, pollution intensity, and regional location might each play a role-but subsequent analysis revealed the pattern holds up clearly for these three groups. Mechanism tests show how green public funds work. They mainly do this in three ways. First, they ease financing constraints. Second, they push companies to develop green technologies. Third, they boost external governance oversight. Initially, it is presumed these funds help firms get money more easily. But subsequent analysis revealed they also motivate green innovation directly. Another thing worth mentioning: the funds make outside monitors-like regulators or investors-more active. With actually practical effects, external checks become tighter and more consistent. This study delivers solid, real-world evidence. It also offers practical policy ideas. These help use green finance to push the manufacturing industry toward sustainability. The shift is low-carbon. It also supports high-quality development.

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