The Impact of Capital Market Opening on Enterprise Green Technology Innovation: Insights from the Shanghai–Hong Kong Stock Connect

Jianfei He, Rong Huang, Jiayu Ding, Yuting Liu and Rongxi Zhou ()
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Jianfei He: China School of Banking and Finance, University of International Business and Economics, Beijing 100029, China
Rong Huang: School of Economics, Minzu University of China, Beijing 100081, China
Jiayu Ding: School of Finance, Capital University of Economics and Business, Beijing 100070, China
Yuting Liu: China School of Banking and Finance, University of International Business and Economics, Beijing 100029, China
Rongxi Zhou: China School of Banking and Finance, University of International Business and Economics, Beijing 100029, China

Sustainability, 2024, vol. 16, issue 6, 1-30

Abstract: China’s economy has experienced a period of remarkable growth and entered a stage of high-quality development, necessitating the implementation of innovative eco-friendly practices involving green technology innovation. The capital market environment plays a direct role in influencing the sources and scale of external financing for businesses, thus affecting their green technology innovation activities. The Shanghai–Hong Kong Stock Connect (SHSC) mechanism in China is the first official two-way opening of China’s capital market. Therefore, this paper regards the SHSC policy as a quasi-natural experiment platform for the opening of the capital market and employs a difference-in-difference methodology to investigate the impact of the SHSC policy on enterprise green technology innovation and its influence mechanisms. The overall sample covers Chinese A-share listed enterprises from 2012 to 2017. The findings demonstrate that the SHSC policy significantly enhances the level of green technology innovation by enhancing corporate governance and alleviating financing constraints. Non-state-owned enterprises are more affected than state-owned ones, and there is no significant difference in the impact between heavily polluting industries and non-heavily polluting ones.

Keywords: green technology innovation; capital market opening; Shanghai–Hong Kong Stock Connect; difference-in-difference model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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