 Stock market openness and ESG performance: Evidence from Shanghai-Hong Kong connect programYe Wang, Xufeng Liu and Die Wan Economic Analysis and Policy, 2023, vol. 78, issue C, 1306-1319 Abstract: Taking the Shanghai-Hong Kong connect program as a natural experiment, the paper investigates if stock market openness impacts firms’ ESG performance. The results show that, the ESG rating of the connected firms improves significantly compared to the non-connected firms, and the improvement is larger in firms with stricter financial constraints, but smaller in stocks with better financial or market performance. The findings imply that since foreign investors value ESG more than domestic investors, the connected firms may promote their ESG performance to cater to the northbound capital, and their catering incentive becomes stronger when their demand is more urgent. In the post-pandemic period, with the continuous challenging from anti-globalization trends, our results suggest that it is of theoretical and practical significance to utilize the positive role of market openness on corporate sustainability. Keywords: Stock market openness; Foreign investors; ESG performance; Catering incentive; Corporate sustainability (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:78:y:2023:i:c:p:1306-1319 DOI: 10.1016/j.eap.2023.05.005 Access Statistics for this article Economic Analysis and Policy is currently edited by Clevo Wilson More articles in Economic Analysis and Policy from Elsevier |
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