Capital Market Liberalization, Stock Price, and Corporate Green Innovation: A Quasi-Experiment of Shanghai-Hong Kong Stock Connect

Wan Ying-lin, Jia Jiu-lu and Fu Jia-cheng

SAGE Open, 2025, vol. 15, issue 3, 21582440251342476

Abstract: This study uses the Shanghai-Hong Kong Stock Connect as a quasi-natural experiment to explore how capital market liberalization affects green innovation in China’s A-share listed firms. The findings show that the Stock Connect stimulates independent but not cooperative green innovation. This effect is driven by active investor governance and, to a lesser extent, the threat of investor exit, with the former having a more substantial positive influence. The impact is more pronounced in firms located in regions with more robust legal systems and better corporate governance. Capital market liberalization boosts firms’ motivation and capacity for green innovation, providing valuable insights for policymaking and the continued development of liberalized capital markets.

Keywords: capital market liberalization; Shanghai-Hong Kong stock connect; corporate green innovation; difference in difference (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:15:y:2025:i:3:p:21582440251342476

DOI: 10.1177/21582440251342476

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