Influence mechanism of government subsidy on the green transformation of coal company in China

Abstract

The optimization of government subsidies to enhance the efficiency of coal companies’ green transformation constitutes a critical component in the pursuit of global sustainability. We investigate the influence mechanism of government subsidies on the green transformation using data from the listed coal companies in China from 2007 to 2022. According to our findings and hypothesis testing, previous government subsidies did not have a significant direct impact on coal companies’ green transformation. Nevertheless, government subsidies can help coal companies transition to greener practices by promoting innovative green initiatives. Furthermore, we confirmed an indirect route: that government subsidies enable the adoption of low-carbon initiatives, which in turn could facilitate the transition of coal companies towards green practices. In addition, we discovered that the coal company’s digitization will improve this indirect route. Thus, we propose increasing the effectiveness of government subsidies in facilitating coal companies’ transition to green practices by focusing on technological advancements and enhancing company digitalization.

Keywords

• Government subsidy
• Green transformation
• Coal company
• Digitalization
• Innovation