Two-Pronged Approach: Capital Market Openness Promotes Corporate Green Total Factor Productivity

Ziyang Zhan, Junfeng Li, Dongxing Jia and Kai Wu ()
Additional contact information
Ziyang Zhan: School of Finance, Central University of Finance and Economics, Beijing 102206, China
Junfeng Li: School of Finance, Central University of Finance and Economics, Beijing 102206, China
Dongxing Jia: School of Finance, Central University of Finance and Economics, Beijing 102206, China
Kai Wu: School of Finance, Central University of Finance and Economics, Beijing 102206, China

Sustainability, 2025, vol. 17, issue 13, 1-24

Abstract: This study examines the impact of capital market openness on corporate green total factor productivity (GTFP) using a quasi-natural experiment based on the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect policies. Employing a multi-period difference-in-differences (DID) approach, the findings reveal that capital market openness significantly enhances corporate GTFP through two primary mechanisms: strengthening firms’ green financial resources and technological innovation (green “hard strength”) and improving corporate environmental governance, green information disclosure, and managerial green expertise (green “soft strength”). Further heterogeneity analysis suggests that firms with greater institutional investor engagement, higher market competition, and non-state ownership exhibit stronger responses. These results provide policy insights into leveraging financial liberalization to drive corporate sustainability and green economic growth. This study highlights the role of financial markets in supporting global carbon neutrality and sustainable development goals.

Keywords: capital market openness; green total factor productivity; financial liberalization; green finance; corporate sustainability (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/17/13/5901/pdf (application/pdf)
https://www.mdpi.com/2071-1050/17/13/5901/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:17:y:2025:i:13:p:5901-:d:1688333

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().