Local governments play an important role in promoting firms' green transformation through policy guidance, financial support, regulatory measures, and resource allocation. In this study, we used A-share listed companies on the Shanghai and Shenzhen Stock Exchanges from 2010 to 2023 as research samples and explored the relationship and underlying mechanisms between local governments' green attention (GGA) and firm green transformation (FGT) using textual analysis techniques. The empirical results showed that higher GGA significantly promotes FGT. Mechanism analysis indicates that GGA enhances FGT by strengthening firms' green innovation capacity and improving environmental information disclosure. In addition, firms' greenwashing prevention measures further strengthen the positive effect of GGA on FGT. The relationship between GGA and FGT varies across ownership types, pollution intensity, and levels of GGA. This study enriches the theoretical and practical understanding of government attention in promoting firm green transformation and provides insights for guiding local government behavior and improving corporate green governance.
Citation: Kai Chang, Haoxuan Fu, Wenqi Wang. Impact of local governments' green attention on firm green transformation in China: Empirical evidence based on the BERTopic method[J]. Green Finance, 2026, 8(2): 236-270. doi: 10.3934/GF.2026009
Local governments play an important role in promoting firms' green transformation through policy guidance, financial support, regulatory measures, and resource allocation. In this study, we used A-share listed companies on the Shanghai and Shenzhen Stock Exchanges from 2010 to 2023 as research samples and explored the relationship and underlying mechanisms between local governments' green attention (GGA) and firm green transformation (FGT) using textual analysis techniques. The empirical results showed that higher GGA significantly promotes FGT. Mechanism analysis indicates that GGA enhances FGT by strengthening firms' green innovation capacity and improving environmental information disclosure. In addition, firms' greenwashing prevention measures further strengthen the positive effect of GGA on FGT. The relationship between GGA and FGT varies across ownership types, pollution intensity, and levels of GGA. This study enriches the theoretical and practical understanding of government attention in promoting firm green transformation and provides insights for guiding local government behavior and improving corporate green governance.
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Figures(4) / Tables(10)
Kai Chang, Haoxuan Fu, Wenqi Wang. Impact of local governments' green attention on firm green transformation in China: Empirical evidence based on the BERTopic method[J]. Green Finance, 2026, 8(2): 236-270. doi: 10.3934/GF.2026009
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