Do government green subsidies improve corporate carbon neutrality performance?

• Published in: Letters in spatial and resource sciences Vol. 18; no. 1; p. 26
• Main Author: Niu, Zhuangzhuang
• Format: Journal Article
• Language: English
• Published: Berlin/Heidelberg Springer Berlin Heidelberg 01.12.2025; Springer Nature B.V
• Subjects: Agricultural Economics; Annual reports; Carbon; Climate; Demography; Economics; Economics and Finance; Environmental Economics; Executives; Geographical Information Systems/Cartography; Government; Government subsidies; Hypotheses; Innovations; Investments; Landscape/Regional and Urban Planning; Neutrality; Original Paper; Politics; Regional/Spatial Science; Renewable resources; Subsidies; Variables; China; Q56; Financing constraints; H23; Carbon neutrality performance; Green subsidies; Investor green attention; Green innovation; O32
• ISSN: 1864-4031; 1864-404X
• DOI: 10.1007/s12076-025-00422-1

Carbon neutrality is critical to addressing the climate crisis. Using a unique dataset from Chinese market from 2018 to 2022, this study investigates the impact of government green subsidies on corporate carbon neutrality performance (CNP). The results indicate that green subsidies increase CNP by promoting green innovation, alleviating financing constraints, and attracting investor green attention. Additionally, green subsidies have a spillover effect, incentivizing the peers of subsidized firms to improve their CNP. This study provides additional evidence to assess the role of government power in promoting sustainability.