Abstract: The development of green manufacturing is instrumental for China’s low-carbon economic transition. Nevertheless, prior research has concentrated on the direct effects of such policies, with scant attention paid to their supply chain spillovers. Addressing this gap, the present study utilizes China’s Green Factory Program as a natural experiment to investigate these spillover effects from a supply chain perspective. It is found that when a customer firm obtains Green Factory certification, it significantly facilitates the low-carbon transition of its suppliers. This effect is more pronounced among suppliers in regions with greater impetus for low-carbon development, in closer geographic proximity to the certified customer, with stronger operational linkages, and under higher scrutiny from green investors. Further analysis suggests that low-carbon technological innovation and improved carbon management serve as primary transmission channels. The results provide crucial policy insights for coordinating carbon abatement efforts throughout the supply chain and for steering the economy towards a sustainable, low-carbon path.

Key words: green manufacturing, low-carbon transition, green factory, supply chain, spillover effect