1. Introduction
Manufacturing is the backbone of China’s national economy, and its international competitiveness typically reflects a nation’s comprehensive strength. Since the 20th National Congress of the Communist Party of China emphasized the need to promote the high-end, intelligent, and green development of the manufacturing sector, the push for green transformation in manufacturing has been elevated to an unprecedented level. Within the current manufacturing structure, industries with high energy consumption and pollution still account for a significant proportion in China. This not only hinders the high-quality development of China’s economy but also places immense pressure on the country’s resources and environment. According to the “China Energy Statistical Yearbook (2024)”, the total energy consumption of China’s manufacturing sector reached 2.82447 billion tons of standard coal, accounting for 56.821% of the nation’s total energy consumption. The resulting carbon emissions amounted to 8.0113 billion tons, representing 69.838% of the country’s total carbon emissions. This indicates that there is still considerable room for improvement in green innovation and transformation within the manufacturing sector. The green transformation of manufacturing is not only a critical pathway for high-quality development but also an inevitable requirement for sustainable development [
1].
Enterprises are the core carriers of socio-economic wealth creation and the extractors of natural resources, making them the most crucial factor in balancing economic development with ecological environmental protection. Given the public goods nature of the ecological environment, on one hand, the benefits of environmental governance by enterprises are shared by all economic stakeholders, while the costs are borne solely by the enterprises themselves. On the other hand, enterprises do not incur costs for their exploitation of natural resources [
2]. Green transformation often conflicts with the profit-maximization goals of enterprises, making the drive for green transformation more reliant on various environmental policies implemented by the government. As an essential tool for guiding enterprises toward green development, environmental policies aim to address the negative environmental externalities of economic activities and internalize the costs of environmental externalities. By enacting relevant laws, regulations, policies, and guidelines, environmental policies effectively stimulate and intervene in enterprises’ energy-saving and emission-reduction activities, serving as a vital external force in promoting the transformation and development of manufacturing enterprises [
3].
From an international perspective, to effectively address global environmental challenges such as climate change, environmental pollution, and ecological degradation, the United Nations has promoted global green ecological development through initiatives such as establishing a global green environmental policy framework and target system, organizing international environmental activities, and funding and supporting green ecological demonstration projects [
4]. By providing financial and technical support, the United Nations assists countries in implementing green ecological demonstration projects, showcasing the feasibility and advantages of green ecological development, and offering references for other regions and countries. For instance, the United Nations established the Green Climate Fund (GCF) to support developing countries in adapting to and mitigating the impacts of climate change. As of November 2024, the GCF has approved 286 projects, with a total funding scale of
$15.9 billion. In recent months, global trade pressures, energy security concerns triggered by the Russia–Ukraine conflict, industrial reshoring, and geopolitical factors have led to significant shifts in global green policy directions and theoretical reflections. From the perspective of China’s green policies, in 2015, the State Council issued Made in China 2025, listing “green manufacturing” as one of the five key projects and clarifying the strategic tasks for China’s manufacturing development. In 2021, the 14th Five-Year Plan for Industrial Green Development proposed that green transformation should be “guaranteed by regulatory and standard systems, vigorously implementing green manufacturing projects, and achieving significant results in industrial green development”. In 2024, the “Opinions of the Central Committee of the Communist Party of China and the State Council on Accelerating the Comprehensive Green Transformation of Economic and Social Development” was issued. These policies, as part of a series of central policy systems, systematically deploy measures to accelerate the comprehensive green transformation of economic and social development, explicitly requiring the improvement of the green transformation policy system and adherence to comprehensive green transformation. Central green policies, as top-level designs that govern the overall national strategy, provide policy incentives and institutional guarantees for the green transformation of manufacturing enterprises [
5]. As a new round of technological revolution and industrial transformation approaches, China is bound to formulate and implement more policies in the field of green manufacturing development. In this context, clarifying the channels through which central green policies influence enterprise green transformation and whether there are differences in the effectiveness of different types of green policies holds significant theoretical and practical importance for the Chinese government in adopting appropriate green policies and promoting the green development of manufacturing enterprises.
China is the world’s largest unitary state, characterized by its vast territory and large population. Central policies are macro-level national strategies, while local governments possess certain discretionary powers to formulate regional policies based on local development conditions to further implement central policies. Consequently, there are variations in policies across different regions [
6]. Under China’s model of decentralization, local governments face the dilemma of mismatched fiscal and administrative powers. Driven by “yardstick competition” and a GDP-oriented performance evaluation mechanism, local governments are more inclined to sacrifice environmental benefits for economic gains. This aligns with the profit-driven nature of enterprises, potentially leading to collusion between local governments and enterprises, resulting in misalignment with the objectives of the central government [
7]. How to achieve a rational division of labor and collaborative governance between central and local governments and how to realize the complementary advantages and dynamic balance of professional and localized management are key issues that need to be addressed in advancing the modernization of the national governance system and capabilities.
The “Wuli–Shili–Renli” (WSR) systems methodology, which focuses on solving complex and systemic problems [
8], aligns well with policy systems characterized by multiple intricate factors. It is particularly suitable for constructing a theoretical framework for green policies driving the green transformation of manufacturing enterprises. This is especially true for central green policies, as local governments, when faced with central policies, address three layers of issues: the “Wuli” (physical) layer, which deals with “what exists”, where local governments control the allocation of key physical elements such as land, energy, and data; the “Shili” (logical) layer, which addresses “how to do it”, where local governments balance economic and environmental performance pressures; and the “Renli” (human) layer, which tackles “why to do it”, reflecting the subjective willingness of local governments to promote enterprise green transformation [
9]. Therefore, the WSR theory provides a comprehensive and clear framework for exploring the policy-making mechanisms of China’s green development in manufacturing from the perspective of central-local collaboration. It reveals the essence of such collaboration and offers diagnostic tools when transformation encounters obstacles.
Against this backdrop, this paper primarily explores the following questions: can the issuance of central green policies directly drive the green transformation of manufacturing enterprises? Should local governments coordinate with central policies or independently formulate green policies tailored to their own development? Alternatively, under the premise of aligning with the central government’s top-level design, how can local governments fully leverage their subjective initiative across multiple dimensions? The aim is to investigate the policy-making mechanisms through which the central and local governments promote the green transformation of manufacturing enterprises from a central-local collaboration perspective. To this end, this study employs a sample of A-share listed manufacturing companies in Shanghai and Shenzhen from 2011 to 2022, examining the impact of green policies on the green transformation of manufacturing enterprises and their underlying mechanisms from the perspective of central-local collaboration. First, the study tests the impact of central green policies on the green transformation of manufacturing enterprises and further categorizes green policies into three dimensions—supply-side, environmental, and demand-side—to examine their differential effects. Second, it explores the impact of central-local policy alignment on enterprise green transformation. Finally, based on the “Wuli–Shili–Renli” (WSR) methodology, the study investigates the boundary conditions for the effective implementation of central green policies. The findings reveal that central green policies generally facilitate the green transformation of manufacturing enterprises, with supply-side and environmental policies showing significant effectiveness. Central-local policy alignment has a notably positive impact on enterprise green transformation. The boundary effect analysis indicates that local manufacturing comparative advantages do not exert significant boundary effects, while local performance evaluation pressures exhibit a nonlinear boundary effect on the positive relationship between central green policies and enterprise green transformation. Local governments’ green focus significantly enhances the positive impact of central green policies on enterprise green transformation.
The marginal contributions of this paper are as follows: (1) using a sample of A-share listed manufacturing companies in Shanghai and Shenzhen from 2011 to 2022, this study creates a novel longitudinal dataset. This dataset integrates multi-dimensional data, including policy texts (central and local green policies), corporate annual reports (R&D investment, patent data, etc.), and regional economic statistics (e.g., local GDP growth rate, PM2.5 concentration, etc.), constructing a cross-level (central-local-enterprise) analytical framework. On the one hand, the longitudinal dataset allows for capturing dynamic changes, covering multiple policy cycles, and tracking the implementation intensity of central and local green policies at different time points and their long-term impacts on enterprise green transformation, thereby revealing the long-term interaction mechanisms between policies and enterprises. On the other hand, while existing studies have examined the impact of strategic planning or pilot policies in various subfields of green development on enterprise transformation, they have not comprehensively reflected the overall impact of central green policies on enterprise green transformation behavior. By analyzing policy texts, this study constructs an overall supply intensity index for central green policies, not only focusing on their impact on enterprise green transformation but also examining the differential effects of policies across different dimensions. (2) Grounded in China’s unique institutional context of central-local decentralization, this study investigates the intrinsic mechanisms through which green policy alignment under central-local decentralization influences the green transformation behavior of micro-enterprises. It extends the existing debate on “green policy effectiveness” to the exploration of “boundaries of green policy effectiveness”, enriching the boundary conditions for determining the effectiveness and desirability of green policies in transitioning countries. This provides a new cognitive foundation and empirical evidence for the ongoing academic debate on green policy effectiveness and offers a new theoretical framework and empirical evidence for the formulation and implementation of central and local policies. (3) The WSR methodology, which systematically and scientifically analyzes and designs, plans, and coordinates the development of things from an overall perspective, has been widely applied in fields such as knowledge management, enterprise management, public opinion governance, engineering practice, and system evaluation. However, existing research has yet to apply the WSR methodology to the theoretical study and practical guidance of central green policies. Based on the WSR methodology, this study explores the boundary effects of central green policies in enhancing the green transformation of manufacturing enterprises, contributing to broadening the research on the mechanisms through which central green policies drive enterprise green transformation and providing a theoretical basis for improving the green policy system.
2. Literature Review
Green transformation aims to shift from a high-emission, high-pollution, and environmentally destructive extensive development model to a low-emission, low-consumption green development model, thereby reconstructing the harmonious relationship between humans and nature and promoting sustainable development [
10]. As the microeconomic entities in the market, enterprises are not only the main drivers of economic growth but also the primary polluters. Thus, they have become the key focus and breakthrough point for practicing green development concepts and achieving green transformation and upgrading. The green transformation of enterprises not only aligns with their intrinsic requirements for high-quality development but also resonates with national strategic orientations, making them a critical target for government environmental regulations and green policies [
11].
In existing research, external factors such as fiscal and tax policies, regulatory factors, and resource factors, as well as internal factors such as corporate management structures and green technology innovation, are the primary focuses of domestic and international scholars studying enterprise green transformation. From the perspective of external factors, fiscal factors mainly refer to fiscal pressure. Yu et al. through a study of 285 cities in China, found that when fiscal pressure is high, local governments may divert funds originally intended to support green technology innovation to other areas with faster returns, which is detrimental to the green transformation of the manufacturing sector [
12]. Regulatory factors primarily refer to environmental regulations. Strict environmental regulations can help reduce the pollution emission intensity while compelling manufacturing enterprises to improve their green productivity, thereby promoting green development [
13]. Liu et al.’s research further revealed that the role of environmental regulations in enhancing the green transformation of manufacturing is mainly reflected in supervising and strengthening internal innovation, and this effect is more pronounced in enterprises with higher emissions, lower green productivity, and older equipment [
14]. Resource factors mainly refer to resource dependence. Resource dependence refers to the phenomenon where resource-abundant economies crowd out factors that drive long-term economic growth during their development [
15]. Zheng et al. further explored the reasons and found that resource-dependent cities excessively rely on natural resources while inadequately cultivating new drivers and industries, coupled with a lack of technological introduction, leading to increasingly prominent issues of high energy consumption and low output, ultimately trapping them in an unsustainable development model [
16]. From the perspective of internal factors, green technology innovation is the primary driver and the foremost impetus for enterprise green transformation. Green technology innovation not only directly reduces pollutant emissions in manufacturing by replacing polluting equipment but also enhances pollutant recycling technologies, transforming undesirable outputs into intermediate inputs, thereby indirectly improving the overall green performance of enterprises [
17]. Green human resource management [
18], executives’ green investment vision [
19], and organizational culture [
20] are critical elements to achieve transformation.
From the perspective of the specific connotation of enterprise green transformation, the development model centered on energy conservation, environmental protection, and green low carbon embodies certain characteristics of quasi-public goods, representing an organic integration of innovation-driven and green development. Enterprises exhibit positive external effects during green transformation, and the benefits of such transformation often spill over to the entire society [
21]. Therefore, for public goods with strong externalities, such as the ecological environment, it is particularly necessary for government departments to improve the design of supporting environmental management systems. Policy tools, as the collective term for political means to achieve policy objectives or governance effects, can effectively drive enterprise green transformation when appropriately selected. Policy tools are classified differently according to various application scenarios, with numerous classification systems requiring alignment with suitable logical frameworks. Based on different classification criteria, this paper summarizes the existing literature, as shown in
Table 1.
Among these classifications, Rothwell and Zegveld categorized policies into three major types: supply-side, environmental, and demand-side. This classification not only aligns the selection of policy tools with the policy objectives of their applicable fields but also reduces the dimensionality of policies, exhibiting strong within-dimension convergent validity and between-dimension discriminant validity. As a result, it has been widely applied in policy research. In the context of China’s central green policies, supply-side central green policies refer to the government’s top-down support, directly acting on production factors to expand effective supply and directly supporting enterprise green development from the supply side. Bhandary et al., through literature reviews and case studies, examined the environmental and equity impacts of climate finance policies [
31]. Xiang et al. examined the impact of enterprise financialization on green transformation intentions and found that government fiscal subsidies and green financial policies significantly mitigate the inhibitory effect of financialization on green transformation intentions, thereby facilitating enterprise green transformation [
32]. Shao and Chen, through empirical research on heavily polluting enterprises, discovered that government talent subsidies significantly enhance the quantity and quality of green innovation by optimizing internal innovation resources and increasing external financing, thereby promoting green and low-carbon transformation [
33]. Ulucak et al. argued that industrial intelligent technology, as a general-purpose technology, integrates with other technologies to trigger a green technology revolution, providing technical support for enterprise green transformation [
34]. Advanced experimental equipment and favorable research environments are critical for green technology innovation. Jiang et al. empirically demonstrated that information infrastructure and integrated infrastructure create a favorable environment for enterprise green transformation [
35]. Environmental central green policies aim to shape a favorable environment for green development, employing specific measures such as goal planning, intellectual property protection, regulation formulation, and effective supervision. Their primary purpose is to standardize and guide the overall industrial development layout, improve fair competition environments, and thereby enhance enterprises’ innovation capabilities to some extent. Oberlack et al. utilized meta-analysis (Archetype analysis) to study the impact of sustainable development goals on climate change [
36]. Manigandan et al.’s research demonstrated that regulatory policies establish strict environmental standards and emission limits, set green product standards, regulate enterprises’ environmental behaviors, and continuously improve environmental performance through systematic management methods, achieving long-term green development [
37]. Demand-side central green policies indirectly support target industries through policy tools such as government procurement, product subsidies, trade controls, and application promotion, stimulating the demand side to enhance enterprises’ enthusiasm for green and sustainable development. Cheng et al., through systematic literature reviews and content analysis, found that green procurement promotes the development of a circular economy, regulates environmental protection, and fosters the formation of an environmentally friendly society [
38]. Chae’s research indicated that market cultivation policies also provide market application scenarios for green transformation behaviors, alleviating market failures. Comprehensive measures, such as guiding end consumers, promoting international cooperation, and establishing green trading platforms, can collectively advance enterprises’ green transformation [
39].
Through the analysis of existing literature, three limitations in the research on central green policies and enterprise green transformation can be identified: first, a significant portion of the literature analyzes central green policies from a qualitative perspective. Due to the relative difficulty in quantifying demand-side and environmental policies, existing studies have focused more on the effects of specific pilot policies. However, the effects of pilot policies are often regional, necessitating further examination using broader and longer-term microdata. Second, most existing studies focus on the impact of central green policies on enterprise green transformation, overlooking the objective influence of central-local policy coordination under the framework of central-local decentralization on the formulation and implementation of central green policies. Yet, studying the pure effects of central green policies alone is a pseudo-proposition. Numerous external factors determine that the impact of central policies on enterprise green transformation is not simply a matter of “effective” or “ineffective”. Instead, it is essential to delve into the applicable conditions and boundaries for their effective implementation.
7. Results and Discussion
Based on the above findings, the hypotheses tested in this study are summarized as follows, as shown in
Table 16.
Central policies are one of the key factors driving corporate green transformation and achieving high-quality development in the manufacturing sector. This study first confirms the role of central green policies in promoting the green transformation of manufacturing enterprises. It further categorizes green policies into three dimensions—supply-side, environmental, and demand-side—and demonstrates the differences in their effectiveness. Additionally, the research finds that central-local policy coordination significantly enhances corporate green transformation. Building on this, the study employs the Wuli–Shili–Renli (WSR) methodology to reveal the following insights: in the Wuli (physical) aspect, the comparative advantages of local manufacturing do not exhibit a significant boundary effect; in the Shili (logical) aspect, local performance evaluation pressure exerts a nonlinear boundary effect on the positive relationship between central green policies and corporate green transformation; and in the Renli (human) aspect, local governments’ green attention significantly strengthens the positive impact of central green policies on the green transformation of manufacturing enterprises. Based on these findings, the theoretical contributions of this study are as follows:
First, this study extends the literature on the impact of central green policies on corporate green transformation. Existing research has examined the effects of strategic planning or pilot policies in specific areas of central policies on corporate transformation, but it has failed to comprehensively and accurately reflect the holistic impact of central green policies on corporate behavior. This paper constructs a holistic intensity index for central green policies, not only focusing on their influence on corporate green transformation but also exploring the effectiveness differences among various policy dimensions. By doing so, this study not only extends the evaluation of the effectiveness of central green policies but also enriches empirical research on the driving factors of corporate green transformation.
Second, from the perspective of China’s unique central-controlled economic model, this paper investigates the intrinsic mechanisms through which the coordination between central and local governments under the decentralization framework influences the green transformation behavior of micro-enterprises. It enriches the boundary conditions for assessing the effectiveness and appropriateness of policies in transitioning economies, providing a new cognitive foundation and empirical evidence for the ongoing academic debate on the effectiveness of green policies. This contributes to the existing literature by deepening the understanding of the mechanisms through which green policies drive corporate green transformation.
Lastly, this study broadens the application of the Wuli–Shili–Renli (WSR) methodology. Based on the WSR framework, it explores the boundary effects of central green policies on enhancing corporate green transformation by examining the comparative advantages of local manufacturing (Wuli: physical factors), local performance evaluation pressure (Shili: logical factors), and local green attention (Renli: human factors). This provides a systematic analytical framework for understanding the mechanisms through which central and local governments collaboratively promote corporate green transformation. Furthermore, it validates the practicality and scientific rigor of the WSR methodology in the field of policy implementation.