Impact of capital market openness on corporate green technology innovation: evidence from the Shanghai-Hong Kong Stock Connect program

Abstract

This paper explores the impact of capital market openness on corporate green technology innovation using the Difference in Differences model (DID) and a quasi-natural experiment with the Shanghai-Hong Kong Stock Exchange using A-share listed corporations data from 2011 to 2020. The findings indicate that capital market openness has a significant promotion effect on corporate green technology innovation. This effect is consistent using Propensity Score Matching-Difference in Differences model (PSM-DID), counterfactual and placebo tests. Moreover, capital market openness can indirectly stimulate corporate green technology innovation by increasing corporate R&D investment and improving corporate management. Notably, the promotion effect of capital market openness on green technology innovation of SOEs and small-scale corporations is stronger.

Keywords:

• Capital market openness
• corporate green technology innovation
• Shanghai-Hong Kong Stock Connect program
• corporate management

JEL CODES:

• Q00; Q01; Q56

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 See more detail: https://www.investopedia.com/terms/q/qualified-foreign-institutional-investor-qfii.asp

2 See more detail: http://www.moa.gov.cn/ztzl/sbdhd/zyjs/201211/t20121127_3074189.htm

Additional information

Funding

This project is funded by the National Natural Science Foundation of China (NSFC) (72172042).