Capital market liberalization and green innovation for sustainability: Evidence from China

This paper investigates the impact of capital market liberalization on green innovation. In our theoretical examination, we empirically analyze data on 1,693 listed firms in China in 2008–2019, using a time-varying difference-in-differences model. The results show that capital market liberalization...

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Bibliographic Details
Published inEconomic analysis and policy Vol. 75; pp. 610 - 623
Main Authors Feng, Gen-Fu, Niu, Peng, Wang, Jun-Zhuo, Liu, Jian
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.09.2022
Subjects
Capital market liberalization
Green innovation
Mediating effect
Q55
Capital market liberalization
Green innovation
G18
Mediating effect
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Summary:This paper investigates the impact of capital market liberalization on green innovation. In our theoretical examination, we empirically analyze data on 1,693 listed firms in China in 2008–2019, using a time-varying difference-in-differences model. The results show that capital market liberalization promotes green innovation in China and has a stronger effect on green invention patents than green utility model patents. Heterogeneity analysis results show that the positive effects varies across firms with different types of ownership or scale as well as between AH cross-listed and non-AH cross-listed firms.11AH cross-listed firms refers to companies listed on both China’s A-share market and H-share market. Finally, this research finds that capital market liberalization spurs green innovation through both reducing financing constraints and information disclosure quality effects.
ISSN:0313-5926
DOI:10.1016/j.eap.2022.06.009