Accelerating the diffusion of green technology can unleash the full potential of innovation, providing strong support for the construction of an ecological civilization. This paper explores the existence, mechanism, and actual impact of corporate green technology diffusion behaviors using green patent citation data from Chinese A-share listed companies from 2005 to 2021. The study indicates that there is a significant industry group effect in the process of corporate green technology diffusion, where an increase in the level of green technology diffusion among peer companies strengthens the diffusion intentions of the target company. Significant differences in the group effect are observed across different levels of technology diffusion, diffusion stages, and technological capabilities. Institutional pressure is categorized into regulatory, normative, and mimetic pressures, all of which are found to stimulate the group behavior of corporate green technology diffusion. Moreover, these pressures are substitutable: mimetic pressure substitutes for regulatory pressure, which in turn substitutes for normative pressure, indicating that the group behavior of corporate green technology diffusion mainly stems from competition rather than regulation and norms. Further dividing corporate performance into economic and environmental performance, the study finds that an increase in the level of green technology diffusion improves both economic and environmental performance. The group effect strengthens the positive impact on environmental performance while inhibiting the improvement of economic performance. The conclusions provide theoretical guidance and strategic references for promoting corporate green technology diffusion.