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Catalytic effect of the Shanghai–Hong Kong Stock Connect policy on corporate ESG performance

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  • Cai, Cen
  • Yang, Qianyi
  • Tu, Da
  • Tian, Grace Li
  • Tu, Yongqian

Abstract

Using the difference-in-differences method and Shanghai Stock Exchange–listed company data from 2007 to 2022, this study investigates the impact of the Shanghai–Hong Kong Stock Connect policy and capital market liberalization on corporate environmental, social, and governance (ESG) performance. Results show a significant improvement in ESG performance following the implementation of the Shanghai–Hong Kong Stock Connect policy. Analyst focus serves as a key intermediary in this process. Furthermore, capital market liberalization enhances corporate information disclosure standards and expedites ESG performance improvements. Following the implementation of the policy, state-owned enterprises demonstrate a particularly substantial increase in ESG performance.

Suggested Citation

  • Cai, Cen & Yang, Qianyi & Tu, Da & Tian, Grace Li & Tu, Yongqian, 2025. "Catalytic effect of the Shanghai–Hong Kong Stock Connect policy on corporate ESG performance," International Review of Financial Analysis, Elsevier, vol. 101(C).
    • Handle: RePEc:eee:finana:v:101:y:2025:i:c:s1057521925001036
    DOI: 10.1016/j.irfa.2025.104016
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