Driving Corporate Green Investment: Investigating the Role of Common Ownership Along the Supply Chain in Environmental Sustainability

Abstract

This study uses supplier–customer relationship data from China’s A-share listed companies as a sample to explore the impact and mechanisms of common ownership along the supply chain on corporate green investment. The research hypothesizes that common ownership along the supply chain can have a positive impact on green investment, primarily through three key mechanisms: improving environmental information disclosure between upstream and downstream firms, alleviating financing constraints, and curbing managerial myopia. This study finds that common ownership along the supply chain significantly increases the scale of green investment, and the positive impact is stronger in regions with stronger environmental regulations, heavily polluting industries, companies with lower media attention, lower management shareholding ratios, and lower levels of digital transformation. This research not only enriches the study of factors influencing corporate green investment but also provides new empirical evidence and policy insights for promoting corporate green transformation and achieving “dual carbon” goals through optimizing supply chain governance structures.

1. Introduction

As environmental issues such as global warming, environmental pollution, and resource depletion become increasingly prominent, green development has become a strategic goal for promoting sustainable economic development. The Third Plenary Session of the 20th Central Committee of the Party clearly stated the need to “coordinate carbon reduction, pollution reduction, green expansion, and growth, promote ecological priority, conservation and intensive use, green and low-carbon development, and foster harmonious coexistence between humans and nature” and that “promoting the green and low-carbon transformation of economic and social development is a key link in achieving high-quality development.” As micro-economic entities, an important channel for enterprises to practice green development concepts is through green investment, promoting corporate green transformation through increased green investment. Green investment is an important source of green productivity, providing funding sources and material guarantees for green transformation and development, and serves as a key driving force for enterprises to achieve green and low-carbon development [1]. Green investment drives technological innovation and industrial upgrading, promotes the transformation of traditional industries into green industries, and cultivates new economic growth points. However, due to the lack of effective and comprehensive market mechanisms and policy systems, the positive externalities of green investment are difficult to capture, and enterprises lack sufficient internal motivation and incentive mechanisms for green investment, resulting in insufficient scale of green investment. Therefore, exploring the influencing factors that promote green investment development is an important issue that urgently needs to be addressed. Existing research shows that external environment and internal management are the main factors affecting corporate green investment. Among external environmental factors, policy support and external supervision play key roles. On one hand, policy support provides accessible funding channels and policy incentives for corporate green investment through measures such as green credit preferences [2], interest rate liberalization [3], green finance pilots [4], and digital finance [5]. On the other hand, external supervision forms strict punishment mechanisms and reputation constraints on enterprises that fail in environmental responsibility through environmental regulations [6], media supervision [7], and public environmental concerns [8], driving enterprises to proactively engage in green investment. Among internal management factors, management characteristics and governance mechanisms such as equity incentives [9] and executives’ party membership [10] can guide executives to form environmentally friendly cognition, prompting enterprises to adopt more green investment decisions. It can be seen that existing research has focused more on external environment and policy levels, with obvious deficiencies in the discussion of internal governance factors, especially neglecting the impact generated by equity associations between upstream and downstream enterprises in supply chains. The common equity network relationships formed by upstream and downstream enterprises through equity investment can effectively reduce information asymmetry, promote knowledge and technology spillovers, and coordinate the long-term interests of chain enterprises [11]. However, can common ownership along the supply chain effectively promote corporate green investment? What are the specific impact pathways and heterogeneity among enterprises with different characteristics? In-depth research on the impact mechanism of supply chain equity associations on corporate green investment not only helps enrich the theoretical system of green investment but also provides an important theoretical basis and practical guidance for formulating more precise and effective green development policies.

As a product of the continuous development of capital markets, the phenomenon of common ownership, where investors simultaneously hold shares in two or more companies, has become increasingly common [12]. In the U.S. market, BlackRock holds more than 5% of the shares in over 20% of the listed companies in its portfolio [13]. The common ownership phenomenon includes not only competing enterprises in the same industry but also upstream and downstream enterprises in supply chains. By the end of 2023, approximately 18% of listed companies in China’s capital market had common ownership along the supply chain among their top ten shareholders. As an important link in the relationships between enterprises within supply chains, it can play key roles in information transmission [11], resource integration [14], collaborative cooperation [15], and supervisory governance [16], affecting corporate green investment decisions. Theoretically, supply chain common owners will aim to maximize the overall collaborative value of the supply chain, coordinate the green behaviors of upstream and downstream enterprises, internalize environmental costs, and promote upstream and downstream supply chain enterprises to increase green investment and enhance overall green development levels and sustainable competitive advantages. Therefore, exploring the impact mechanism of common ownership along the supply chain on corporate green investment has profound practical significance for promoting corporate green transformation and achieving carbon peak and carbon neutrality goals.

Based on the above analysis, this paper uses supplier–customer relationship data of A-share listed companies on the Shanghai and Shenzhen stock exchanges from 2010 to 2023 as samples to empirically test the impact and internal mechanisms of common ownership along the supply chain on corporate green investment, as well as differences among enterprises with different regional environmental regulation intensity, industry pollution levels, media attention, and management shareholding ratios. Research results show that common ownership along the supply chain significantly enhances corporate green investment levels. Mechanism testing shows that common ownership along the supply chain affects corporate green investment behavior through three channels: synergy effect, funding effect, and sustainability effect. Specifically, the synergy effect indicates that supply chain common owners promote green collaborative cooperation between upstream and downstream enterprises by strengthening corporate environmental information disclosure, increasing corporate green investment scale. The funding effect indicates that supply chain common owners provide credit endorsements for upstream and downstream enterprises, alleviating financing constraints and addressing enterprises’ funding difficulties for green investments. The sustainability effect indicates that supply chain common owners enhance corporate green investment levels by suppressing management myopia and improving corporate sustainable governance levels. To ensure robust conclusions, this paper also conducted a series of endogeneity tests and robustness checks including instrumental variable methods, Heckman two-stage testing, PSM methods, replacement of core variables, controlling for industry-year trends, using lagged variables, and controlling for other possible influencing factors. The test results remain consistent with the aforementioned research conclusions. Further analysis found that unlike downstream enterprises, common ownership along the supply chain has better effects in improving corporate green investment among upstream supply chain enterprises.

Compared to existing research, the marginal contributions of this paper are threefold: First, it expands research on influencing factors of green investment. Previous research has focused more on the incentive effects of macro policies on green investment, such as green credit policies [2], green finance policies [4], and digital finance [5], with less exploration from the enterprise level on impacts on green investment, especially from the perspective of stakeholder networks. This paper explores the pivotal role of common ownership along the supply chain in corporate green investment by considering the dual connection relationships of supply chain networks and equity networks. Second, it enriches research on the economic effects of common ownership. Compared to the adequate research on horizontal common ownership in the existing literature, research on economic effects based on vertical supply chain relationships is still limited and mostly concentrated on trade credit [17], loan costs [14], corporate innovation [15], and earnings management [16], with obvious deficiencies in research on green transformation. Therefore, this paper systematically studies whether and how common ownership along the supply chain can promote the enhancement of corporate green investment from three aspects: information coordination, financial support, and sustainable governance, expanding the research boundaries of common ownership economic consequences and promoting supply chain sustainable development and helping enterprises achieve the “dual carbon” goals. Third, it has sufficient public policy significance. This paper reveals the promoting effect of common ownership along the supply chain on corporate green investment, providing new policy ideas for achieving “dual carbon” goals and promoting economic green transformation. Governments can introduce relevant policy measures to guide and support investors in strategic investment layouts in upstream and downstream industrial chains, establish and improve green investment incentive mechanisms, and achieve dual enhancement of economic and environmental benefits.

2. Literature Review and Research Hypothesis

2.1. Green Investment

Green investment is a key pathway for enterprises to fulfill environmental responsibilities and pursue sustainable development. Green investment (GI) is defined as investment behavior aimed at reducing and controlling pollutant emissions without significantly reducing the production and consumption of non-energy goods, such as pollution control and research and development of renewable energy technologies [18]. In the context of intensifying global climate change and “dual carbon” goals, the factors driving enterprises to participate in green investment have become a focal point of attention for both academia and practitioners.

Existing research on the driving factors of corporate green investment can be summarized along two main lines: macro and micro perspectives. From the macro perspective, the existing literature mostly focuses on the impact of policy support [4], policy uncertainty [19], and government environmental attention [20] on corporate green investment. Stable policy orientation [21] and environmental regulation [6] are the external driving forces for corporate green investment. From the micro perspective, the focus is on the influence of internal corporate governance structures. Equity incentives [9] and the environmental awareness of executive teams [22] can provide internal incentives for corporate green investment. Additionally, public [8] and media environmental attention [23] can also supervise management behavior through reputation mechanisms, prompting enterprises to assume more environmental responsibilities.

However, existing research on green investment tends to view firms as independent decision-making entities, paying less attention to their relational effects within industrial networks. In recent years, some scholars have begun to extend their research perspective to the supply chain level, exploring how coordination and cooperation in the supply chain relationship can promote an increase in green investment. For example, by constructing sustainable supply chain coordination models, they explore optimal investment strategies for green technology and electronic equipment, emphasizing the importance of supply chain network coordination for enhancing environmental performance [24]; fully considering the important impact of fairness concerns on sustainable supply chain decisions, they conduct joint optimization of green investment and contract design issues [25]. Meanwhile, financing issues are also a key link affecting supply chain green investment. Existing research has focused on manufacturers’ green strategies when facing financial constraints, exploring financing risk management in green supply chains [26]. Additionally, emerging technologies such as blockchain also have potential effects on supply chain green investment decisions, especially in contexts involving overconfident manufacturers [27].

Although research from the supply chain perspective is increasingly rich, it mainly focuses on operational coordination, contract design, financing risks, and technology applications, with less attention paid to the impact of equity network relationships on the green investment decisions of firms in the chain. Firms do not exist in isolation but are embedded in complex supply chain networks consisting of suppliers, customers, and others. Their close integration with equity relationships may become an important factor influencing firms’ green investment decisions. Therefore, based on existing research, this paper will deeply explore the mechanism of supply chain equity network relationships on firms’ green investment, providing supplementary research on the influencing factors of green investment.

2.2. Common Ownership Along the Supply Chain and Green Investment

Common ownership refers to the phenomenon where the same investor simultaneously holds shares in two or more companies [28]. Early research focused on horizontal common ownership within the same industry, where investors hold shares in multiple competing firms within the same industry. The existing literature mainly explores the economic effects of shareholding behavior by horizontal common owners in the same industry, with significant controversy. On one hand, horizontal common ownership promotes firm growth through coordination among firms in the same industry, exerting synergistic cooperation effects [29]. On the other hand, it may weaken product market competition [30], leading to price increases and output reductions, harming consumer interests and market vitality [31].

In recent years, with the refinement of industrial chain division of labor, the impact of common ownership along the supply chain on corporate governance and firm behavior has become increasingly prominent [11]. Unlike horizontal common ownership, common ownership along the supply chain connects upstream and downstream firms with business relationships. According to portfolio theory and value chain theory, the core objective of supply chain common owners is to maximize the total value of their investment portfolio across the supply chain [32]. Behavioral motivations oriented toward the overall interests of the value chain promote governance behaviors that tend to foster collaborative cooperation and efficiency improvements among firms in the chain [33]. Meanwhile, since environmental risks in the chain may transmit to other firms and harm the overall interests of the investment portfolio, supply chain common owners have strong endogenous incentives to supervise and promote the green behaviors of firms in the chain, to achieve stability and value enhancement of the entire value chain.

Compared to other parallel governance mechanisms, common ownership along the supply chain has obvious governance advantages. Unlike horizontal common ownership that may lead to monopolistic collusion, common ownership along the supply chain stabilizes supply chain relationships, strengthens upstream and downstream business collaboration, and stimulates firms’ long-term value creation activities [34]. Specifically, on the one hand, supply chain common owners serve as information hubs for upstream and downstream firms [15], enabling them to obtain non-public precise information related to upstream and downstream production operations and environmental risks, thereby effectively identifying and evaluating the value of green investment projects. On the other hand, due to supply chain common owners’ deep involvement in the supply chain, they can coordinate supply chain partner behaviors, promote long-term cooperation in technological innovation between upstream and downstream firms, and conduct R&D activities [32]. Meanwhile, common ownership along the supply chain can also reduce supply chain risks, lower financing costs, and enrich firms’ financing channels [14].

Based on the above analysis, common ownership along the supply chain can effectively overcome obstacles faced by green investment and promote improvements in firms’ green investment levels. Therefore, this paper proposes its first research hypothesis:

Hypothesis H1:

Common ownership along the supply chain will improve corporate green investment.

To further clarify the underlying mechanisms, this paper proposes the following hypotheses from three channels: information, capital, and governance.

2.2.1. The Information Synergy Channel

According to information asymmetry theory, there exists a significant information gap between enterprises and external investors, which is particularly pronounced in the green investment sector characterized by technological complexity and uncertain returns [5]. External investors find it difficult to accurately assess the true value and expected returns of green projects based solely on traditional financial reports, leading to adverse selection problems that make it difficult for high-quality green projects to gain recognition due to information opacity [35]. Common ownership along the supply chain provides a solid information foundation for corporate green investment decisions by alleviating information asymmetry [11]. Supply chain common owners, with their unique supply chain governance role, effectively improve the predicament of insufficient green investment. Specifically, the advantages of supply chain common owners are manifested at two levels: First, in terms of information acquisition, when investors simultaneously hold shares in upstream and downstream enterprises in the industrial chain, they can access more forward-looking information resources and have a more comprehensive understanding of the environmental risks and opportunities facing the entire value chain, thereby providing professional advice for the green investment decisions of their portfolio companies. Second, in terms of governance motivation, unlike ordinary investors who pursue profit maximization of individual enterprises, supply chain common owners aim to maximize the value of their investment portfolio [36]. Since environmental risks in both upstream and downstream enterprises may harm the overall value of the supply chain, supply chain common owners have strong endogenous motivation to require chain enterprises to enhance environmental information transparency. To this end, supply chain common owners can require supply chain portfolio companies to improve the quality of environmental information disclosure through shareholder meeting voting and influencing board elections [37]. High-quality environmental information disclosure not only reduces information collection costs between upstream and downstream enterprises [38] but also creates opportunities for collaborative development of environmental technologies and products, achieving a win–win situation for both environmental and economic benefits. Based on this, this paper proposes the second research hypothesis:

Hypothesis H2:

Common ownership along the supply chain promotes corporate green investment by improving the quality of corporate environmental information disclosure.

2.2.2. The Financial Support Channel

Based on financing constraint theory, when enterprises face difficulties in obtaining internal and external funds, they have to abandon investment projects with positive net present value. Green projects face more prominent financing constraint difficulties due to their characteristics of large investment scale, long return cycle, and low collateral value [4]. Common ownership along the supply chain can alleviate corporate financing constraints through the following three aspects: First, direct financing support. Supply chain common owners possess strong capital strength and can provide stable long-term funding support for green projects of portfolio companies, acting as patient capital [32]. Second, credit endorsement and signal transmission. The shareholding or share-increasing behavior of supply chain common owners transmits positive signals about the enterprise’s long-term development prospects and supply chain stability to the market [36], providing implicit credit guarantees for enterprises and reducing creditors’ risk costs [14], helping enterprises obtain external financing at lower costs. Finally, by promoting the formation of internal capital markets. Common ownership along the supply chain strengthens trust and cooperation between upstream and downstream enterprises, promoting the operation of internal capital market mechanisms such as trade credit financing, providing valuable liquidity support for cash-strapped enterprises and broadening funding sources for green investment [17]. Based on this, this paper proposes the third research hypothesis:

Hypothesis H3:

Common ownership along the supply chain promotes corporate green investment by alleviating corporate financing constraints.

2.2.3. The Sustainable Governance Channel

Agency theory points out that the separation of ownership and control leads to differences between managers’ objectives and shareholders’ objectives, especially when executive compensation is excessively linked to short-term financial performance, which easily induces managerial myopic behavior, and executive short-termism is one of the key obstacles to insufficient corporate green investment [39]. Common ownership along the supply chain, as a governance force focused on the long-term value of the supply chain, can effectively curb managerial myopic behavior: On the one hand, common owners can enact governance corrections. Supply chain common owners can utilize their shareholder power to actively influence the board’s compensation committee, promoting reforms in executive compensation structure and reducing the assessment weight of short-term accounting profits [16]. By binding management’s personal interests with the enterprise’s long-term sustainable development goals, it fundamentally weakens short-term incentives. When management persists in short-termism, common owners can also exert pressure on their investment decisions through shareholder meeting voting or direct communication [31]. On the other hand, common owners can strengthen strategic guidance. Out of the goal of enhancing the green synergistic value of the industrial chain, supply chain common owners actively encourage and guide management to carry out collaborative cooperation [40], such as promoting upstream and downstream green technology cooperation and collaborative development of green markets. This not only enhances the enterprise’s long-term competitive advantages but also strengthens the enterprise’s strategic position by constructing green ecosystems, making management more inclined to adopt green investment strategies with long-term value. Based on this, this paper proposes the fourth research hypothesis:

Hypothesis H4:

Common ownership along the supply chain promotes corporate green investment by suppressing managerial myopia.

3. Empirical Approaches

3.1. Data and Sample

Based on the A-share data of listed companies on the Shanghai and Shenzhen stock exchanges from 2010 to 2023, we conducted the following processing steps: (1) excluded samples of financial and insurance enterprises; (2) excluded ST and PT companies; (3) deleted samples with missing key variables; (4) deleted samples with asset–liability ratios greater than or equal to 1 and less than or equal to 0; (5) winsorized all continuous variables at the 1% and 99% percentiles. We finally obtained 5162 valid company–year observations. Data sources include the CSMAR database, CRNDS database, Wind database, Wantide Information Network, and data manually collected by the authors.

3.2. Measurement of Key Variables

3.2.1. Control Variables

Following the existing research [11,16], we controlled for company size (Size), listed company age (FirmAge), leverage ratio (Lev), enterprise growth (Growth), return on assets (ROA), cash flow level (CashFlow), CEO–chairman duality (Dual), board size (Board), proportion of independent directors (Indep), ownership concentration (Top1), and Tobin’s Q value (TobinQ) and controlled for year fixed effects and industry fixed effects. Specific variable definitions and descriptive statistical results are shown in

Table 1. Summary statistics.

Variable	Definitions	Measurement	N	SD	P50	Mean
EPI	Corporate green investment	Detailed in the text	5162	0.863	0.000	0.241
Overlap_dum	Existence of common ownership along the chain supply holdings	Detailed in the text	5162	0.293	0.000	0.095
Overlap_num	Level of common ownership along the chain supply linkages	Detailed in the text	5162	0.232	0.000	0.0730
Overlap_value	Market value of common ownership along the chain supply holdings	Detailed in the text	5162	4.078	0.000	0.572
Size	Company scale	Natural logarithm of total assets	5162	1.250	21.83	22.02
FirmAge	Firm age	Years since IPO	5162	0.374	2.944	2.877
Lev	Leverage	Total liabilities/total assets	5162	0.214	0.403	0.415
Growth	Firm growth	(Current year revenue–previous year revenue)/previous year revenue	5162	1.056	0.131	0.375
ROA	Return on assets	Net profit divided by total assets	5162	0.061	0.035	0.033
CashFlow	Cash flow	Net cash flow from operating activities/operating revenue	5162	0.068	0.038	0.038
Dual	Duality	Whether the chairman of the board and the general manager are the same person, if the same person takes 1, and vice versa takes 0	5162	0.437	0.000	0.257
Board	Board size	Natural logarithm of board size	5162	0.194	2.197	2.147
Indep	Proportion of independent directors	Number of independent directors/total number of directors	5162	0.050	0.333	0.370
Top1	Shareholding ratio of the largest shareholder	Shareholding of the largest shareholder/total shares of the enterprise	5162	0.150	0.315	0.344
TobinQ	Tobin’s Q	(Market value of equity + book value of liabilities)/total assets	5162	1.443	1.524	1.991

Note. This table reports the descriptive statistics and definitions for the main variables. The sample period is from 2010 to 2023.

.

3.2.2. Measurement of Common Ownership Along the Supply Chain

Following the research methods of He and Huang [28], Freeman [11], and Gao et al. [16], we define supply chain common owners as shareholders who simultaneously hold shares in the listed company and its top five suppliers or top five customers among the top ten shareholders. Specifically, this paper constructs common ownership along the supply chain indicators from the following three dimensions: First, whether common ownership along the supply chain exists within the enterprise (Overlap_dum). If supply chain common owners exist within the enterprise during the year, Overlap_dum takes the value of 1; otherwise, it is assigned 0. Second, the degree of supply chain common owners’ connection (Overlap_num). Calculate how many supply chain common owners each listed company has at the annual level, add 1, and take the natural logarithm. Third, the market value of common ownership shareholders along supply chain holdings (Overlap_values). The specific calculation method is shown in Formula (1):

$$Overlap\_value={\displaystyle \frac{{\displaystyle {\sum }_{k=1}^n(V_{s,k}+V_{c,k})}}{V_s+V_c}}$$

(1)

where ${\displaystyle {\sum }_{k=1}^n{V}_{s,k}}$ is the market value held by supply chain common owners k in supplier s, ${\displaystyle {\sum }_{k=1}^n{V}_{c,k}}$ is the market value held by supply chain common owners k in customer c, $V_s$ is the total market value of supplier s, and $V_c$ is the total market value of customer c.

3.2.3. Measurement of Green Investment

Drawing on the existing literature’s measurement methods [3,21], based on the definition of green investment in the appendix of listed companies’ annual reports, we collect detailed data related to environmental protection and green aspects in the “construction in progress” and “administrative expenses” accounts. Specifically, the “construction in progress” account details include capitalized expenditures such as desulfurization, denitrification, and denitration projects, sewage, waste gas, and waste residue treatment, energy and water conservation, waste treatment, clean production lines, and waste heat recovery and utilization; the “administrative expenses” account details include expensed expenditures such as environmental protection fees, pollution discharge fees, and greening fees. By summing up the above environmental protection and green expenditures and dividing by the company’s total assets at year-end, we obtain the enterprise’s year-end green investment level (EPI).

3.3. Research Design

To examine the relationship between common ownership along the supply chain and enterprise green investment levels, this paper constructs the following regression model:

$$EP{I}_{i,t}={\beta }_0+{\beta }_1\times Overla{p}_{i,t}+{\beta }_2\times Control{s}_{i,t}+{\mu }_i+{\theta }_t+{\epsilon }_{i,t}$$

(2)

where $EP{I}_{i,t}$ represents the green investment level of enterprise i in year t. $Overla{p}_{i.t}$ represents the common ownership along the supply chain of enterprise i in year t, specifically whether the enterprise has common ownership along the supply chain (Overlap_dum), the degree of supply chain common owners’ connection (Overlap_num), and the market value of common ownership along the supply chain (Overlap_value). $Control{s}_{i,t}$ includes other control variables affecting firm green investment, ${\mu }_i$ represents firm fixed effects, ${\theta }_t$ denotes year fixed effects, and ${\sigma }_{i,t}$ is the residual term, with standard errors clustered at the firm level. If the coefficient ${\beta }_1$ is significantly greater than 0, it suggests that common ownership along the supply chain enhances green investment, thus supporting hypothesis H1.

To further explore the underlying influence mechanism, we developed the following regression model to clarify the corresponding theoretical framework:

$$M{V}_{i,t}={\delta }_0+{\delta }_1\times Overla{p}_{i,t}+{\delta }_2\times Control{s}_{i,t}+{\mu }_i+{\theta }_t+{\epsilon }_{i,t}$$

(3)

$$EP{I}_{i,t}={\gamma }_1+{\gamma }_2\times M{V}_{i,t}+{\gamma }_{3}Control{s}_{i,t}+{\mu }_i+{\theta }_t+{\epsilon }_{i,t}$$

(4)

where $M{V}_{i,t}$ represents the mediating variable, and the remaining variables are consistent with those in the previous benchmark model (2).

4. Results

4.1. Baseline Results

We conduct an empirical test of the impact relationship between common ownership along the supply chain and corporate green investment, with regression results shown in

Table 2. Baseline results.

	(1)	(2)	(3)	(4)	(5)	(6)
VARIABLES	EPI	EPI	EPI	EPI	EPI	EPI
Overlap_dum	0.1729 **			0.1581 **
	(0.073)			(0.074)
Overlap_num		0.2295 ***			0.2121 **
		(0.088)			(0.090)
Overlap_value			0.0223 ***			0.0236 ***
			(0.008)			(0.009)
Size				0.0405 **	0.0395 **	0.0417 **
				(0.018)	(0.017)	(0.017)
FirmAge				0.0184	0.0178	0.0187
				(0.062)	(0.062)	(0.062)
Lev				0.2367 **	0.2400 ***	0.2333 **
				(0.092)	(0.092)	(0.091)
Growth				−0.0138	−0.0138	−0.0143
				(0.012)	(0.012)	(0.012)
ROA1				0.2098	0.2133	0.2468
				(0.177)	(0.177)	(0.176)
CashFlow				−0.0037	−0.0035	−0.0150
				(0.172)	(0.173)	(0.171)
Dual				0.0974 **	0.0974 **	0.1026 ***
				(0.040)	(0.040)	(0.040)
Board				−0.2226 **	−0.2238 **	−0.1986 *
				(0.113)	(0.113)	(0.105)
Indep				−0.7745 **	−0.7793 **	−0.6987 **
				(0.354)	(0.354)	(0.341)
Top1				−0.2421 *	−0.2451 *	−0.2372 **
				(0.126)	(0.126)	(0.117)
TobinQ				−0.0148 *	−0.0148 *	−0.0143 *
				(0.009)	(0.009)	(0.008)
Constant	0.2308 ***	0.2304 ***	0.2338 ***	0.0341	0.0617	−0.0746
	(0.018)	(0.018)	(0.018)	(0.441)	(0.438)	(0.435)
N	5317	5317	5317	5162	5162	5162
adj-R^2	0.077	0.078	0.087	0.084	0.084	0.093
Industry FE	Y	Y	Y	Y	Y	Y
Year FE	Y	Y	Y	Y	Y	Y

Note. *, **, and *** denote statistical significance at the 10%, 5%, and 1% levels, respectively. Standard errors of regression coefficients are shown in parentheses below coefficients.

. Columns (1) to (3) of Table 2 show the impact of common ownership along the supply chain on corporate green investment level (EPI) without including the information set. Specifically, the presence of common ownership along the supply chain (Overlap_dum), the degree of supply chain common owners’ connections (Overlap_num), and the market value of common ownership along the supply chain (Overlap_value) are positively correlated with corporate green investment level (EPI) at the 1% and 5% significance levels. Columns (4) to (6) in Table 2 show the impact of common ownership along the supply chain on corporate green investment level when including the information set while simultaneously controlling for time fixed effects and industry fixed effects. Specifically, the estimated coefficients of the presence of common ownership along the supply chain (Overlap_dum), the degree of supply chain common owners’ connections (Overlap_num), and the market value of common ownership along the supply chain (Overlap_value) on corporate green investment (EPI) are also positively correlated at the 5% and 1% significance levels. The results indicate that common ownership along the supply chain can lead to an expansion of the corporate green investment scale, and hypothesis H1 is supported.

Regional differences in the strength of environmental regulation significantly affect the enhancing effect of common ownership along the supply chain on corporate green investment levels. In regions with weak environmental regulation, enterprises lack green investment pressure from regulatory authorities, which makes the governance role of common ownership along the supply chain an important alternative mechanism for promoting corporate green transformation. Corporate management may tend to pursue profit maximization while neglecting the importance of environmental protection and sustainable development. Supply chain common owners can utilize their shareholder status and governance capabilities to actively supervise enterprises in green governance, promoting enterprises to formulate and implement environmentally friendly investment strategies, fully exerting the enhancing effect on green investment. Based on this, to verify the heterogeneous effects of common ownership along the supply chain on corporate green investment in enterprises in regions with different environmental regulation intensities, following existing research methods [41], we measure the strength of environmental regulation in the region where enterprises are located using the proportion of vocabulary related to “environmental protection” in local government work reports relative to the total word count of the reports and construct interaction terms by multiplying common ownership along the supply chain with regional environmental regulation. Specifically, if an enterprise’s environmental regulation intensity is higher than the median level of ratings for the regions where sample enterprises are located, it is considered that the enterprise faces strong environmental regulation and is classified into the strong environmental regulation group, with EV taking a value of 1; otherwise, it is classified into the weak environmental regulation group, with EV taking a value of 0. Columns (1) to (3) in

Table 3. Influence factors test: environmental regulation and heavy pollution industries.

	(1)	(2)	(3)	(4)	(5)	(6)
VARIABLES	EPI	EPI	EPI	EPI	EPI	EPI
Overlap_dum × EV	−0.2889 *
	(0.157)
Overlap_num × EV		−0.3297 *
		(0.191)
Overlap_value × EV			−0.0271 *
			(0.015)
Overlap_dum × Pollute				0.3029 *
				(0.174)
Overlap_num × Pollute					0.3468 *
					(0.199)
Overlap_value ×Pollute						0.0430 ***
						(0.012)
Overlap_dum	0.3119 **			0.0427
	(0.141)			(0.058)
Overlap_num		0.3840 **			0.0727
		(0.168)			(0.082)
Overlap_value			0.0382 ***			−0.0005
			(0.015)			(0.003)
EV	−0.0286	−0.0318	−0.0409
	(0.031)	(0.031)	(0.032)
Pollute				0.1103	0.1140	0.0949
				(0.191)	(0.192)	(0.191)
Constant	0.0853	0.1135	−0.0003	0.0886	0.1177	−0.0583
	(0.442)	(0.440)	(0.436)	(0.441)	(0.439)	(0.429)
Controls	Y	Y	Y	Y	Y	Y
N	5162	5162	5162	5162	5162	5162
adj-R^2	0.087	0.087	0.098	0.087	0.087	0.104
Industry FE	Y	Y	Y	Y	Y	Y
Year FE	Y	Y	Y	Y	Y	Y

Note. *, **, and *** denote statistical significance at the 10%, 5%, and 1% levels, respectively. Standard errors of regression coefficients are shown in parentheses below coefficients.

present the heterogeneous effects under different environmental regulation regions, adding interaction terms of common ownership along the supply chain and environmental regulation intensity to the baseline regression model. The results show that the interaction terms of the presence of common ownership along the supply chain and environmental regulation intensity (Overlap_dumEV), the interaction terms of common ownership along the supply chain connection degree and environmental regulation intensity (Overlap_numEV), and the interaction terms of common ownership along the supply chain market value and environmental regulation intensity (Overlap_value*EV) are significantly negative at the 10% statistical level. Therefore, the promoting effect of common ownership along the supply chain on corporate green investment scale only exists in enterprises in regions with weaker environmental regulations.

In heavily polluting industries, the enhancing effect of common ownership along the supply chain on corporate green investment levels is more prominent. Green transformation in heavily polluting industries requires high capital investment, high technical requirements, and strong market uncertainty and is highly dependent on industrial chain coordination, facing greater environmental transformation pressure and green investment demand. Supply chain common owners, with their strong financial strength and rich investment experience, provide necessary financial support and professional advice for corporate green investment, helping enterprises navigate the transformation period. Meanwhile, the extensive industry networks and resource integration capabilities possessed by supply chain common owners can help enterprises obtain the technology, talent, and market resources needed for green transformation, promoting heavy pollution industry enterprises to increase green investment. For this purpose, we distinguish whether it is a heavy pollution industry based on the “Industry Classification Management Directory for Environmental Protection Verification of Listed Companies” and use the dummy variable Pollute to represent it. When an enterprise belongs to a heavy pollution industry, it is classified into the heavy pollution enterprise group with Pollute set to 1; otherwise, it is classified into the non-heavy pollution group with Pollute set to 0. Interaction terms of common ownership along the supply chain and heavy pollution industries are added to the baseline regression, with regression results shown in columns (4) to (6) of Table 3. The results show that the interaction terms of the presence of common ownership along the supply chain and heavy pollution industries (Overlap_dum×Pollute), the interaction terms of supply chain common owners’ connection degree and heavy pollution industries (Overlap_num×Pollute), and the interaction terms of common ownership along the supply chain market value and heavy pollution industries (Overlap_value×Pollute) are positively significant at the 10% and 1% statistical levels, respectively. It can be seen that the positive impact of common ownership along the supply chain on corporate green investment levels can be more effectively utilized in heavy pollution industry enterprises.

Media attention and public supervision are important external forces that form corporate reputation pressure. In information environments lacking media supervision, the probability of negative behaviors being discovered and punished is relatively low, creating space for management’s opportunistic behavior. Considering that environmental scandals of enterprises within the supply chain will affect the reputation of other enterprises and thus damage the investment interests of supply chain common owners, supply chain common owners will actively supervise the behavior of enterprises they hold shares in, making up for the insufficiency of external supervision and providing important driving force for green investment. To further explore the heterogeneous impact of different levels of media attention on the relationship between common ownership along the supply chain and green investment scale, drawing on the research of Chen et al. [7] and Chen & Zhang [42], we construct corporate media attention based on the total number of news items where the listed company appears in online financial news headlines from 20 well-known Chinese financial media platforms including Oriental Money, Phoenix Finance, and Caijing.com. Specifically, if an enterprise’s media attention is higher than the median of all sample enterprises in that year, it is classified into the high media attention group with Media assigned a value of 1; otherwise, it is classified into the low media attention group with Media assigned a value of 0. We add interaction terms of corporate scale common ownership along the supply chain and media attention to the baseline model, with regression results shown in columns (1) to (3) of

Table 4. Heterogeneity analysis: media attention, management shareholding, and digital transformation.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)
VARIABLES	EPI	EPI	EPI	EPI	EPI	EPI	EPI	EPI	EPI
Overlap_dum×Media	−0.2598 **
	(0.109)
Overlap_num×Media		−0.2665 *
		(0.142)
Overlap_value×Media			−0.0206 **
			(0.008)
Overlap_dum×Mshare				−0.3201 ***
				(0.099)
Overlap_num×Mshare					−0.4122 ***
					(0.117)
Overlap_value×Mshare						−0.0392 ***
						(0.012)
Overlap_dum×DIGI							−0.2584 ***
							(0.093)
Overlap_num×DIGI								−0.2888 **
								(0.127)
Overlap_value×DIGI									−0.0194 ***
									(0.006)
Overlap_dum	0.2503 **			0.2213 **			0.2295 **
	(0.101)			(0.092)			(0.090)
Overlap_num		0.3107 **			0.2840 ***			0.2857 ***
		(0.121)			(0.109)			(0.107)
Overlap_value			0.0275 ***			0.0249 ***			0.0279 ***
			(0.010)			(0.009)			(0.009)
Media	0.0233	0.0180	0.0134
	(0.027)	(0.027)	(0.028)
Mshare				−0.0147	−0.0156	−0.0225
				(0.042)	(0.042)	(0.042)
DIGI							−0.0548 *	−0.0581 *	−0.0677 **
							(0.031)	(0.031)	(0.031)
Constant	−0.0223	0.0158	−0.0817	0.1490	0.1768	0.0175	0.1289	0.1502	−0.0145
	(0.426)	(0.425)	(0.427)	(0.486)	(0.485)	(0.478)	(0.442)	(0.439)	(0.435)
Controls	Y	Y	Y	Y	Y	Y	Y	Y	Y
N	5162	5162	5162	5162	5162	5162	5162	5162	5162
adj-R^2	0.085	0.085	0.095	0.086	0.086	0.095	0.087	0.087	0.096
Industry FE	Y	Y	Y	Y	Y	Y	Y	Y	Y
Year FE	Y	Y	Y	Y	Y	Y	Y	Y	Y

Note. *, **, and *** denote statistical significance at the 10%, 5%, and 1% levels, respectively. Standard errors of regression coefficients are shown in parentheses below coefficients.

. The results indicate that the interaction terms of the presence of common ownership along the supply chain and media attention (Overlap_dum×Media), the interaction terms of common ownership along the supply chain connection degree and media attention (Overlap_num×Media), and the interaction terms of common ownership along the supply chain market value and media attention (Overlap_value×Media) are negative at the 5%, 10%, and 1% significance levels, respectively, indicating that the enhancing effect of common ownership along the supply chain on corporate green investment is more significant in enterprises with weaker media attention.

The relationship between common ownership along the supply chain and corporate green investment is also subject to heterogeneous impacts from management shareholding ratios. Enterprises with lower management shareholding ratios face more serious principal–agent problems, with management lacking sufficient motivation to promote green investment. On the one hand, supply chain common owners can promote enterprises to establish long-term incentive mechanisms for management, incorporating green indicators into management assessment systems and incentive plans, improving management’s attention and enthusiasm for green investment. On the other hand, as important external shareholders, supply chain common owners have stronger supervisory motivation and governance capabilities, effectively constraining management’s short-sighted behavior and promoting enterprises to make green investments that align with long-term corporate interests. Additionally, green investment requires coordination and resource integration across departments, and common ownership along the supply chain can provide external resource support for enterprises, helping them overcome internal resistance and promote the implementation of corporate green investment. To test the heterogeneous differences in the impact of common ownership along the supply chain on corporate green investment levels under different management shareholding ratio characteristics, we classify enterprises based on whether management shareholding ratios are greater than the median of all sample enterprises in that year, with samples greater than the median classified as the high management shareholding group and Mshare assigned a value of 1 and conversely classified as the low management shareholding group with Mshare assigned a value of 0. Subsequently, we add interaction terms of common ownership along the supply chain and management shareholding to the baseline model, with regression results shown in Table 4. The results indicate that the interaction terms of the presence of common ownership along the supply chain and management shareholding (Overlap_dum×Mshare), the interaction terms of common ownership along the supply chain connection degree and management shareholding (Overlap_num×Mshare), and the interaction terms of common ownership along the supply chain market value and management shareholding (Overlap_value×Mshare) show negative correlations at the 5%, 10%, and 1% statistical levels, respectively, indicating that the promoting effect of common ownership along the supply chain on corporate green investment is more significant in enterprises with lower management shareholding ratios.

The impact of common ownership along the supply chain on corporate green investment levels also shows heterogeneous differences among companies with different levels of digital transformation. In companies with lower levels of digital transformation, there are serious information asymmetry problems, and the lack of effective information communication channels is one of the important obstacles to advancing green investment. Supply chain common owners, leveraging their diversified investment portfolios in upstream and downstream enterprises along the industrial chain, can establish information networks spanning suppliers and customers, promote standardized disclosure and efficient transmission of environmental information, break down information barriers, and reduce investment uncertainty for corporate green investment. To explore the heterogeneous differences in the impact of common ownership along the supply chain on corporate green investment levels among companies with different levels of digital transformation, drawing on existing research [43,44], we use the ratio of digital assets to intangible assets to measure digital transformation. Digital assets are the sum of ICT hardware capital and software capital. ICT hardware capital is the sum of net values of computers, communication tools, and related equipment in corporate financial reports, and software capital is the net value of software assets. We classify companies based on whether their digital transformation level is greater than the median of all sample companies in that year, with those greater than the median classified as the high digital transformation group and assigned a DIGI value of 1, while the opposite is classified as the low digital transformation group and assigned a DIGI value of 0. Subsequently, we add the interaction term between common ownership along the supply chain and digital transformation to the baseline model, with regression results shown in Table 4. The results indicate that the interaction terms of whether common ownership along the supply chain exists and digital transformation (Overlap_dum×DIGI), the degree of common ownership along the supply chain linkage and digital transformation (Overlap_num×DIGI), and common ownership along the supply chain market value and digital transformation (Overlap_value×DIGI) show negative correlations at 1% and 5% statistical levels, respectively, indicating that the promoting effect of common ownership along the supply chain on corporate green investment is more significant in companies with lower levels of digital transformation.

4.2. Channel Analysis

4.2.1. Channel 1

To test that common ownership along the supply chain can improve green investment levels through synergy effect, this paper, following the research of Lv et al. [45] and Hu & Xu [46], uses environmental information disclosure quality to measure corporate synergy effect. Higher environmental information disclosure quality indicates stronger information synergy effect in enterprises. Specifically, environmental information disclosure items are scored based on two types of themes, and the scores for each item are summed up and then one is added, and the logarithm is taken to obtain the enterprise environmental information disclosure quality (Eidq). Among these, if enterprises have disclosures in environmental management, certification disclosure, and environmental information disclosure vehicle categories, they receive two points, otherwise zero points; if enterprises have quantitative and qualitative descriptions in monetizable items such as environmental liability disclosure and environmental performance and governance disclosure, they receive two points, one point for only qualitative descriptions, and zero points for no disclosure.

Table 5. Synergistic information mechanisms.

	(1)	(2)	(3)	(4)
VARIABLES	Eidq	Eidq	Eidq	EPI
Overlap_dum	0.1880 ***
	(0.053)
Overlap_num		0.2860 ***
		(0.066)
Overlap_value			0.0083 **
			(0.004)
Eidq				0.0519 ***
				(0.020)
Constant	−0.3001	−0.2785	−0.3763	0.2878 ***
	(0.382)	(0.381)	(0.385)	(0.074)
Controls	Y	Y	Y	Y
N	5162	5162	5162	5212
adj-R^2	0.377	0.378	0.376	0.080
Industry FE	Y	Y	Y	Y
Year FE	Y	Y	Y	Y

Note. **, and *** indicate statistical significance at the 5%, and 1% levels, respectively. Standard errors of regression coefficients are shown in parentheses below coefficients.

reports the regression results of whether supply chain common owners exist (Overlap_dum), the degree of supply chain common owners’ connection (Overlap_num), and supply chain common owners’ holding market value (Overlap_value) on enterprise environmental information disclosure quality (Eidq), as well as enterprise environmental information disclosure quality (Eidq) on enterprise green investment (EPI). The results show that the estimated coefficient of the impact of common ownership along the supply chain on the quality of enterprise environmental information disclosure (Eidq) is significantly positive at the 5% statistical level. Meanwhile, the regression coefficient of environmental information disclosure quality (Eidq) on enterprise green investment (EPI) is significantly positive at the 1% statistical level. The above regression results indicate that supply chain common owners can fully leverage information synergy effect among their held suppliers and customers, alleviating information asymmetry problems between upstream and downstream enterprises, thereby promoting the expansion of green investment scale.

4.2.2. Channel 2

To verify that common ownership along the supply chain can improve enterprise green investment by alleviating financing constraints, following Wu & Huang’s approach [47], an FC index is constructed to measure financing constraints. When the FC index is higher, enterprises face higher degrees of financing constraints.

Table 6. Financing support mechanisms.

	(1)	(2)	(3)	(4)
VARIABLES	FC	FC	FC	EPI
Overlap_dum	−0.0151 **
	(0.007)
Overlap_num		−0.0210 **
		(0.009)
Overlap_value			−0.0009 *
			(0.001)
FC				−0.2816 ***
				(0.065)
Constant	4.3738 ***	4.3703 ***	4.3878 ***	1.0305 ***
	(0.091)	(0.092)	(0.090)	(0.377)
Controls	Y	Y	Y	Y
N	5059	5059	5059	5077
adj-R^2	0.841	0.841	0.841	0.079
Industry FE	Y	Y	Y	Y
Year FE	Y	Y	Y	Y

Note. *, **, and *** indicate statistical significance at the 10%, 5%, and 1% levels, respectively. Standard errors of regression coefficients are shown in parentheses below coefficients.

reports the regression results of whether supply chain common owners exist (Overlap_dum), the degree of supply chain common owners’ connection (Overlap_num), and supply chain common owners’ holding market value (Overlap_value) on financing constraints (FCs), as well as enterprise financing constraints (FCs) on enterprise green investment (EPI). The results show that the regression coefficients of common ownership along the supply chain on financing constraints (FCs) are negative at significance levels above 10%, and the estimated coefficients of financing constraints (FCs) on enterprise green investment (EPI) are significantly negative at the 1% statistical level. The above findings demonstrate that common ownership along the supply chain helps increase the scale of a company’s green investments by reducing its financing constraints.

4.2.3. Channel 3

To further test that common ownership along the supply chain can promote enterprise green investment by reducing management myopia, the ratio of listed companies’ short-term investments in the current year to total assets at the beginning of the period is used to measure the degree of management myopia.

Table 7. Sustainability effect mechanisms.

	(1)	(2)	(3)	(4)
VARIABLES	Shortinv	Shortinv	Shortinv	EPI
Overlap_dum	−0.0059 ***
	(0.002)
Overlap_num		−0.0075 ***
		(0.003)
Overlap_value			−0.0003 ***
			(0.000)
Shortinv				−0.5344 ***
				(0.165)
Constant	0.0343	0.0337	0.0400	−0.1138
	(0.030)	(0.030)	(0.029)	(0.452)
Controls	Y	Y	Y	Y
N	4782	4782	4782	4782
adj-R^2	0.114	0.114	0.113	0.084
Industry FE	Y	Y	Y	Y
Year FE	Y	Y	Y	Y

Note. *** indicate statistical significance at the 1% levels, respectively. Standard errors of regression coefficients are shown in parentheses below coefficients.

reports the regression results of whether supply chain common owners exist (Overlap_dum), the degree of supply chain common owners’ connection (Overlap_num), and supply chain common owners’ holding market value (Overlap_value) on management myopia (Shortinv), as well as management myopia (Shortinv) on enterprise green investment (EPI). From the regression results in Table 7, it can be seen that the estimated coefficients of common ownership along the supply chain are all negatively correlated at the 1% statistical level, and the estimated coefficients of management myopia (Shortinv) are negatively correlated at the 1% statistical level. The mechanism testing results indicate that common ownership along the supply chain can improve enterprises’ green investment levels by suppressing myopic behavior of management in upstream and downstream enterprises.

5. Endogeneity and Robustness Checks

5.1. Endogeneity

In the baseline regression results, there may still be endogeneity issues between common ownership along the supply chain and enterprise green investment. On the one hand, there may be unobserved factors that affect both common ownership along the supply chain and enterprise green investment, creating omitted variable problems. On the other hand, supply chain common owners’ equity holdings in enterprises may not be a random choice but influenced by certain characteristics of listed companies, and these characteristic factors may also affect enterprise green investment scale, creating sample selection bias problems. To address potential omitted variables, reverse causality, and sample self-selection problems, instrumental variable methods, Heckman two-stage testing, and PSM-OLS are employed for endogeneity testing.

5.1.1. Instrumental Variable (IV) Approach

To address issues of omitted variables and mutual causality, following the method of Crane et al. (2016) [48], we use adjustments to stock index constituents and the average number of supply chain common owners in the same industry in the previous year as instrumental variables, respectively. The rationale for selecting these instrumental variables is that, on the one hand, index funds hold shares in multiple listed companies, and changes in their asset portfolios may prompt changes in common ownership along the supply chain. However, since constituent stock adjustments are made based on firm size and stock liquidity, they have no direct relationship with corporate green investment levels. On the other hand, investors’ stock selection preferences are correlated with the common ownership shareholding along the supply chain of firms in the same industry, but no research has proven that supply chain common owners of firms in the same industry in the previous year affect corporate green investment levels, and green investment may influence supply chain common owners. Therefore, we use the CSI 300 Index and CSI 500 Index as well as the average number of supply chain common owners in the same industry in the previous year as instrumental variables for testing. Specifically, if a stock belongs to the CSI 300 Index, in300 is assigned a value of 1; otherwise, in300 is assigned a value of 0. Similarly, if a stock belongs to the CSI 500 Index, in500 is assigned a value of 1; otherwise, in500 is also assigned a value of 0. The regression results are shown in columns (1) to (4) of

Table 8. Endogeneity.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)
VARIABLES	EPI	EPI	EPI	EPI	EPI	EPI	EPI	EPI	EPI	EPI
Overlap_dum	0.9395 *		1.9261 **		0.1591 **			0.1579 **
	(0.479)		(0.976)		(0.074)			(0.074)
Overlap_num		1.1337 **		2.2439 **		0.2147 **			0.2114 **
		(0.544)		(0.988)		(0.091)			(0.091)
Overlap_value							0.0235 ***			0.0236 ***
							(0.009)
imr					0.1055	0.1143	0.0806
					(0.112)	(0.113)	(0.108)
Constant					−0.3459	−0.3487	−0.3659	0.0563	0.0826	−0.0542
					(0.583)	(0.582)	(0.577)	(0.451)	(0.448)	(0.445)
Kleibergen–Paap rk LM Statistic	34.639	39.363	7.626	10.709
Cragg–Donald Wald F Statistic	43.523	53.402	8.125	11.174
Hansen J Statistic	0.2256	0.4151
N	5317	5317	2891	2891	5162	5162	5162	5077	5077	5077
adj-R^2	−0.048	−0.039	−0.408	−0.328	0.084	0.084	0.093	0.085	0.085	0.094
Industry FE	Y	Y	Y	Y	Y	Y	Y	Y	Y	Y
Year FE	Y	Y	Y	Y	Y	Y	Y	Y	Y	Y

Note. *, **, and *** denote statistical significance at the 10%, 5%, and 1% levels, respectively. Standard errors of regression coefficients are shown in parentheses below coefficients.

. The IV instrumental variable coefficients for whether supply chain common owners exist (Overlap_dum) and the degree of supply chain common owners’ connection (Overlap_num) on corporate green investment (EPI) are significantly positive at the 10% and 5% statistical levels. This indicates that after considering endogeneity issues, the positive effect of common ownership along the supply chain on corporate green investment still holds, and the research conclusions of this paper remain robust.

5.1.2. Heckman Two-Stage Model

To test for potential sample self-selection problems, the Heckman two-stage model is employed. In the first-stage regression, the Probit model is used to estimate the inverse Mills ratio (IMR), observing whether previous period company characteristic variables are associated with common shareholder decisions, and whether enterprises join the CSI 300 Index is added to the regression model as an exclusivity constraint variable. The regression results are shown in columns (3) to (5) of Table 8. The results show that after adding IMR, IMR is not significant, indicating no sample selection bias. Meanwhile, whether supply chain common owners exist (Overlap_dum), the degree of supply chain common owners’ connection (Overlap_num), and supply chain common owners’ holding market value (Overlap_value) on enterprise green investment (EPI) are all positively significant at the 5% statistical level, consistent with baseline regression results.

5.1.3. Propensity Score Matching (PSM)

Considering that enterprise characteristic differences may affect supply chain common owners’ selective equity holdings in listed companies, this paper uses propensity score matching (PSM) to correct selection bias problems. First, enterprises with supply chain common owners (Overlap_dum = 1) are set as the treatment group, and other enterprises (Overlap_dum = 0) are set as the control group. The control variables mentioned earlier are used as matching variables, and based on Logit regression propensity scores, one-to-one nearest neighbor matching without replacement is used to find control groups with characteristics similar to the treatment group. Based on PSM samples, the main regression model is used to estimate differences in enterprise green investment after equity structure changes. The regression results are shown in columns (6)to (8) of Table 8. The regression results show that the estimated coefficients are still significantly positive at the 1% statistical level, indicating that the research hypothesis still holds after eliminating sample self-selection problems.

5.2. Robustness Checks

5.2.1. Alternative Measures of Common Ownership Along the Supply Chain and Green Investment

To verify the robustness of baseline regression results, this paper will change the measurement methods of core variables to avoid the impact of different measurement approaches on regression results. Following Freeman [11] and Gao et al. [16], the minimum shareholding ratio of supply chain common owners between supplier and customer enterprises is used to replace the original explanatory variable measuring common ownership along the supply chain, denoted as Overlap_proports_min. The testing results are shown in column (1) of

Table 9. Robustness checks alternative measures of core variables.

	(1)	(2)	(3)	(4)
VARIABLES	EPI	EPI2	EPI2	EPI2
Overlap_proports_min	1.2141 **
	(0.588)
Overlap_dum		0.5334 **
		(0.268)
Overlap_num			0.7247 **
			(0.321)
Overlap_value				0.0622 *
				(0.037)
Constant	−0.1685	−0.0907	0.4345	0.5365
	(0.435)	(0.438)	(1.217)	(1.207)
Controls	Y	Y	Y	Y
N	5162	5162	5162	5162
adj-R^2	0.088	0.086	0.104	0.105
Industry FE	Y	Y	Y	Y
Year FE	Y	Y	Y	Y

Note. * and ** denote statistical significance at the 10% and 5%, levels, respectively. Standard errors of regression coefficients are shown in parentheses below coefficients.

. The specific calculation formula is shown in Equation (5):

$$Overlap\_proports\_min=min\{{\displaystyle \frac{{\displaystyle {\sum }_{k=1}^n{H}_{c,k}}}{H_{c,k}}},{\displaystyle \frac{{\displaystyle {\sum }_{k=1}^n{H}_{s,k}}}{H_{s,k}}}\}$$

(5)

where ${\displaystyle {\sum }_{k=1}^n{H}_{c,k}/H_c}$ is the shareholding proportion of supply chain common owners K in customer C, ${\displaystyle {\sum }_{k=1}^n{H}_{s,k}/H_s}$ is the shareholding proportion of supply chain common owners K in supplier S, and $\min \left\{\right\}$ is the minimum value among the shareholding proportions of supply chain common owners K in customer C and supplier S.

On the other hand, in calculating green investment scale, enterprise year-end operating revenue is used to replace year-end total assets, constructing an alternative indicator for green investment level, denoted as EPI2, and replacing the original dependent variable measuring enterprise green investment. The regression results are shown in columns (2)to (4) of Table 9. The results show that after changing the measurement methods of explanatory and dependent variables, the results remain basically consistent with baseline regression results, and the previous conclusions still hold.

5.2.2. Controlling for Industry-Year Trends

To control for potential impacts of industry cycle changes and macro-economic factors such as industrial policies, this paper also controls for industry-by-year fixed effects. The regression results are shown in columns (1) to (3) of

Table 10. Robustness checks alternative controlling fixed effects and lagged variables (one period).

	(1)	(2)	(3)	(4)	(5)	(6)
VARIABLES	EPI	EPI	EPI	F.EPI	F.EPI	F.EPI
Overlap_dum	0.1911 **			0.1846 *
	(0.078)			(0.106)
Overlap_num		0.2512 ***			0.2615 **
		(0.093)			(0.128)
Overlap_value			0.0244 ***			0.0293 *
			(0.009)			(0.016)
Constant	0.0297	0.0562	−0.1080	0.7422 *	0.7554 *	0.6074
	(0.475)	(0.472)	(0.469)	(0.446)	(0.443)	(0.409)
Controls	Y	Y	Y	Y	Y	Y
N	5093	5093	5093	2810	2810	2810
adj-R^2	0.143	0.143	0.152	0.095	0.096	0.109
Industry FE	Y	Y	Y	Y	Y	Y
Year FE	Y	Y	Y	Y	Y	Y

Note. *, **, and *** denote statistical significance at the 10%, 5%, and 1% levels, respectively.

. The results show that whether common ownership along the supply chain exists (Overlap_dum), the degree of supply chain common owners’ connection (Overlap_num), and supply chain common owners’ holding market value (Overlap_value) on enterprise green investment (EPI) are all positively significant at the 5% and 1% statistical levels. This shows that the baseline regression results of this paper are robust, and the previous research conclusions still hold.

5.2.3. Lagged Variables (One Period)

To exclude the influence of lag periods, this paper also considers one-period lags for explanatory and control variables in the main model to test the robustness of baseline regression results. The testing results are shown in columns (4) to (6) of Table 10. The results show that whether common ownership along the supply chain exists (Overlap_dum), the degree of supply chain common owners’ connection (Overlap_num), and supply chain common owners’ holding market value (Overlap_value) on enterprise green investment (EPI) are significant at the 5% and 10% statistical levels, respectively, indicating that after using one-period lagged explanatory variables and considering lag effects of explanatory and control variables, the empirical results of this paper remain robust.

5.2.4. Controlling for Other Possible Influencing Factors

Considering that other omitted variables may affect empirical results, this paper adds other possible influencing factors based on the baseline regression model, examining potential changes in empirical results after controlling for institutional investor shareholding ratios (Inst), executive compensation (TMTPay), and managerial environmental awareness (MEA). Managerial environmental awareness, following existing research [49], is measured using text analysis methods selecting keywords based on three dimensions: green competitive advantage cognition, corporate social responsibility cognition, and external environmental pressure perception. The specific keywords are detailed in the Supplementary Materials. Managerial environmental awareness is measured through the frequency of occurrence of these words in the annual reports of listed companies from 2010 to 2023.

The regression results are shown in

Table 11. Robustness checks: controlling for other possible influencing factors.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)
VARIABLES	EPI	EPI	EPI	EPI	EPI	EPI	EPI	EPI	EPI
Overlap_dum	0.1579 **			0.1578 **			0.1548 **
	(0.074)			(0.074)			(0.074)
Overlap_num		0.2116 **			0.2113 **			0.2097 **
		(0.090)			(0.090)			(0.090)
Overlap_value			0.0235 ***			0.0236 ***			0.0237 ***
			(0.009)			(0.009)			(0.009)
Inst	0.0637	0.0626	0.0473
	(0.090)	(0.090)	(0.089)
TMTPay				−0.0263	−0.0258	−0.0269
				(0.028)	(0.028)	(0.028)
MEA							0.0115 *	0.0116 *	0.0118 **
							(0.006)	(0.006)	(0.006)
Constant	0.1273	0.1531	−0.0055	0.2435	0.2666	0.1399	0.1875	0.2172	0.0873
	(0.469)	(0.467)	(0.465)	(0.477)	(0.476)	(0.472)	(0.455)	(0.453)	(0.451)
Controls	Y	Y	Y	Y	Y	Y	Y	Y	Y
N	5159	5159	5159	5158	5158	5158	5154	5154	5154
adj-R^2	0.084	0.084	0.093	0.084	0.084	0.093	0.088	0.089	0.098
Industry FE	Y	Y	Y	Y	Y	Y	Y	Y	Y
Year FE	Y	Y	Y	Y	Y	Y	Y	Y	Y

Note. *, **, and *** denote statistical significance at the 10%, 5%, and 1% levels, respectively. Standard errors of regression coefficients are shown in parentheses below coefficients.

. The results show that when institutional investor shareholding ratios and executive compensation are added, respectively, whether common ownership along the supply chain exists (Overlap_dum), the degree of supply chain common owners’ connection (Overlap_num), and supply chain common owners’ holding market value (Overlap_value) on enterprise green investment (EPI) are significant at the 5% and 1% statistical levels, respectively, indicating that after controlling for other possible influencing factors, the empirical results of this paper remain robust.

6. Discussion

The intrinsic relationship between common ownership along the supply chain and corporate green investment exhibits heterogeneous differences between upstream supplier enterprises and downstream customer enterprises. On one hand, green investment by upstream enterprises primarily involves the fundamental transformation of green technology, production facilities, and governance systems, which belongs to capital-intensive investment with large input and close association with production stability. In comparison, green investment by downstream enterprises is more reflected in product differentiation, environmental packaging, and brand building, with capital input lower than upstream enterprises, and the synergistic value of common ownership along the supply chain is relatively lower. On the other hand, unlike downstream core enterprises with strong bargaining power, upstream suppliers generally face severe financing constraints and weaker market power. When facing equity investment from supply chain common owners, it not only alleviates funding difficulties for upstream enterprises but also provides credit endorsement for supplier enterprises to help them obtain more external financing. Moreover, environmental risks in the supply chain are closely related to upstream production and manufacturing processes, and supply chain common owners will concentrate governance resources on urging suppliers to make substantial green investments and promote green transformation of upstream enterprises. For downstream customers, since their impact on portfolio risk exposure is relatively small, the governance role of supply chain common owners is more reflected in guiding the formulation of positive green procurement standards and coordinated actions with upstream rather than green investment. In summary, common ownership along the supply chain has a stronger promoting effect on the green investment of upstream enterprises.

Table 12. Further analyses.

	(1)	(2)	(3)	(4)	(5)	(6)
VARIABLES	EPI	EPI	EPI	EPI	EPI	EPI
Overlap_supply_dum	0.2134 *
	(0.109)
Overlap_supply_num		0.1846 **
		(0.080)
Overlap_supply_value			0.0300 ***
			(0.011)
Overlap_customer_dum				0.0870
				(0.066)
Overlap_customer_num					0.0416
					(0.040)
Overlap_customer_value						0.0018
						(0.003)
Constant	0.0622	0.1093	−0.0584	−0.2084	−0.2316	−0.2894
	(0.642)	(0.632)	(0.637)	(0.484)	(0.486)	(0.479)
Controls	Y	Y	Y	Y	Y	Y
N	2836	2836	2836	3458	3458	3458
adj-R^2	0.109	0.110	0.126	0.079	0.078	0.078
Industry FE	Y	Y	Y	Y	Y	Y
Year FE	Y	Y	Y	Y	Y	Y

Note. *, **, and *** denote statistical significance at the 10%, 5%, and 1% levels, respectively. Standard errors of regression coefficients are shown in parentheses below coefficients.

reports the heterogeneous effect of research on the asymmetric dependence of upstream and downstream enterprises in the industrial chain. In terms of variable measurement, if supply chain common owners hold shares of supplier enterprises and intermediate enterprises, it is considered as upstream common ownership, and Overlap_supply_dum is set to 1, otherwise 0. Similarly, if supply chain common owners hold shares of customer enterprises and intermediate enterprises, it is considered as downstream common ownership, and Overlap_customer_dum is set to 1, otherwise 0. In addition, following the previous approach, we count the number of enterprises held by upstream supply chain common owners and downstream supply chain common owners of intermediate enterprises among suppliers and customers, respectively, constructing indicators of upstream common ownership enterprise connection number (Overlap_supply_num) and downstream common ownership enterprise connection number (Overlap_customer_num). The test results show that both upstream common ownership and downstream common ownership have an improving effect on corporate green investment behavior and are positively significant at the 10% statistical level, while the impact of downstream common ownership on corporate green investment level is not significant, indicating that the positive impact of upstream common ownership on corporate green investment is significantly stronger than downstream common ownership.

7. Conclusions

7.1. Conclusions

Based on supplier–customer relationship data of Chinese A-share listed companies from 2010 to 2023, this paper empirically analyzes the impact of common ownership along the supply chain on corporate green investment. This study not only explores the underlying mechanism effects but also further examines the heterogeneous effects of common ownership along the supply chain on corporate green investment under different regional environmental regulation levels, heavily polluting industries, media attention levels, management shareholding ratios, and digital transformation degrees, while analyzing the differential effects of this relationship between upstream and downstream enterprises. The core hypothesis of this paper is that common ownership along the supply chain can have a positive impact on corporate green investment levels, and the empirical results provide strong support for this proposition.

The baseline regression results show that common ownership along the supply chain exhibits a significantly positive relationship with corporate green investment levels, indicating that when supply chain common owners hold equity stakes in both upstream and downstream enterprises, they can effectively drive companies to expand their green investment scale. To gain deeper understanding of this phenomenon, this study further explores the underlying channels of influence. The mechanism analysis reveals the following: first, common ownership along the supply chain significantly improves the quality of corporate environmental information disclosure, validating its synergistic effect in promoting information sharing; second, common ownership along the supply chain effectively alleviates corporate financing constraints, confirming its financial effect through providing credit endorsement; finally, common ownership along the supply chain restrains management myopic behavior, reflecting its sustainability effect in guiding long-term value investment.

Furthermore, the positive effects of common ownership along the supply chain are more pronounced under specific circumstances. In enterprises with weaker environmental regulation, lower media attention, lower management shareholding ratios, and lower degrees of digital transformation, common ownership along the supply chain serves as an alternative governance force, showing more significant positive impacts on green investment. Meanwhile, in heavily polluting industries where green transformation needs are most urgent, the driving effect of common ownership along the supply chain is also more prominent. Further analysis reveals that the enhancing effect of common ownership along the supply chain on corporate green investment levels demonstrates stronger influence among upstream supplier enterprises.

Finally, through endogeneity tests and robustness checks including instrumental variable methods, Heckman two-stage tests, and propensity score matching, the reliability of the above conclusions has been validated.

7.2. Managerial Applications

The findings of this study provide important practical guidance for corporate management in green investment decision making and supply chain management.

First, corporate management should recognize the strategic value of common ownership along the supply chain. When seeking strategic partners, management can prioritize investors who invest in key suppliers or customers, building closer supply chain relationships. Introducing common ownership along the supply chain not only alleviates financing constraints faced by green projects but also leverages the coordinating role of common ownership to promote innovation cooperation and information sharing between upstream and downstream enterprises in green technology and sustainable practices, thereby reducing the risks and costs of green investment.

Second, enterprises should establish comprehensive environmental information coordination mechanisms within their supply chains. Upstream and downstream enterprises in the supply chain should create regular environmental information exchange platforms, develop unified environmental standards and monitoring systems, and ensure timely and accurate transmission and sharing of environmental information across all supply chain segments.

Third, corporate management should incorporate green investment into long-term strategic planning. Management should establish long-term incentive mechanisms that link green investment performance with management compensation, ensuring the continuity and effectiveness of green investment decisions.

Finally, upstream suppliers’ management can proactively leverage the capital and reputational support brought by common ownership to increase investment in green production processes and environmental protection facilities. This not only meets downstream customers’ green procurement needs but also consolidates their strategic position within the supply chain, achieving a win–win outcome of both economic and environmental benefits.

7.3. Limitations and Further Research

Although this study provides new insights into understanding the relationship between common ownership along the supply chain and corporate green investment, there are still some limitations that also point to directions for future research.

First, limitations in sample selection: This study’s sample is limited to A-share listed companies in China, and the unique market environment, ownership structure, and regulatory policies may affect the generalizability of the research conclusions. Future research could extend the scope to other countries or regions, particularly examining performance under different capital markets and corporate governance models, conducting cross-national comparative analyses to test the external validity of this study’s conclusions.

Second, limitations in variable measurement: This study’s measurement of green investment mainly relies on data from financial statements, specifically from line items related to environmental protection within “construction in progress” and “management expenses”. Future research could attempt to employ more refined text analysis, corporate social responsibility reports, or survey data to construct more comprehensive measures of green investment. Similarly, the identification of common ownership is based on the top ten shareholders, which may overlook supply chain common owners with lower shareholding ratios but who are equally influential.

Third, deeper exploration of mechanism pathways: This study verified three mechanism channels: information coordination, financing support, and sustainable governance, but there may be other potential pathways. Future research could conduct in-depth exploration of more micro-level mechanisms through case studies and more detailed patent data.

Finally, the study does not consider the heterogeneity of common owner types. This study treats supply chain common owners as a homogeneous group, but different types of institutional investors may have significant differences in investment objectives, governance motivations, and capabilities. Future research could subdivide the types of common owners and explore whether different types of common owners differ in their roles in promoting corporate green investment, thereby providing more targeted recommendations for policy formulation and corporate practice.