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Bond Market Liberalization and Corporate ESG Performance: Evidence From Bond Connect

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  • Yuling Wang
  • Yilu Zhang
  • Bin Miu
  • Yuliang Long

Abstract

This study examines the impact of bond market liberalization on corporate ESG performance using the launch of Northbound Trading under the Bond Connect program as a quasi‐natural experiment. Employing a difference‐in‐differences (DID) approach, the analysis reveals that bond market opening significantly enhances firms'ESG performance. Further evidence suggests that the improvement is mainly driven by better internal control quality and increased green innovation. The positive effects are more pronounced among firms in eastern regions and those with higher financing constraints and stronger market competition. These findings provide new insights into the real effects of financial market liberalization and offer policy implications for promoting sustainable and high‐quality economic development.

Suggested Citation

  • Yuling Wang & Yilu Zhang & Bin Miu & Yuliang Long, 2026. "Bond Market Liberalization and Corporate ESG Performance: Evidence From Bond Connect," Economics and Politics, Wiley Blackwell, vol. 38(2), pages 345-356, July.
    • Handle: RePEc:bla:ecopol:v:38:y:2026:i:2:p:345-356
    DOI: 10.1111/ecpo.70026
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