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Capital market liberalization and green innovation for sustainability: Evidence from China

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  • Feng, Gen-Fu
  • Niu, Peng
  • Wang, Jun-Zhuo
  • Liu, Jian

Abstract

This paper investigates the impact of capital market liberalization on green innovation. In our theoretical examination, we empirically analyze data on 1,693 listed firms in China in 2008–2019, using a time-varying difference-in-differences model. The results show that capital market liberalization promotes green innovation in China and has a stronger effect on green invention patents than green utility model patents. Heterogeneity analysis results show that the positive effects varies across firms with different types of ownership or scale as well as between AH cross-listed and non-AH cross-listed firms.11AH cross-listed firms refers to companies listed on both China’s A-share market and H-share market. Finally, this research finds that capital market liberalization spurs green innovation through both reducing financing constraints and information disclosure quality effects.

Suggested Citation

  • Feng, Gen-Fu & Niu, Peng & Wang, Jun-Zhuo & Liu, Jian, 2022. "Capital market liberalization and green innovation for sustainability: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 610-623.
    • Handle: RePEc:eee:ecanpo:v:75:y:2022:i:c:p:610-623
    DOI: 10.1016/j.eap.2022.06.009
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    8. Wang, Jun, 2023. "The impact of investor communication on enterprise green innovation," Finance Research Letters, Elsevier, vol. 57(C).
    9. Fengyan Wang & Ziyuan Sun & Hua Feng, 2022. "Can Media Attention Promote Green Innovation of Chinese Enterprises? Regulatory Effect of Environmental Regulation and Green Finance," Sustainability, MDPI, vol. 14(17), pages 1-25, September.
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    More about this item

    Keywords

    Capital market liberalization; Green innovation; Mediating effect;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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