Stock liquidity and corporate climate performance: evidence from China
研究首次考察中国股票流动性对企业气候绩效的影响，发现流动性提高与碳排放降低显著相关，并通过外部监督、碳减排投资和绿色创新等渠道发挥作用。
In this study, we consider for the first time whether and how stock liquidity impacts corporate climate performance in China. We find that an increase in stock liquidity is highly associated with lower carbon emissions. To address endogeneity concerns, we exploit a unique quasi-natural experiment in China— the stock market liberalization (Shanghai-Shenzhen Hong Kong Stock Connect). Using difference-in-differences (DID) estimations, we find that carbon emissions for treatment firms substantially decrease after the stock market liberalization. The impact of stock liquidity is more pronounced for enterprises facing severe financial constraints, greater equity dependence, and operating in pollution-intensive sectors. Similarly, we find that external monitoring, carbon abatement investment, and green innovation are plausible channels through which stock liquidity drives carbon emissions reduction. We further find that the sensitivity of corporate climate performance to improved stock liquidity becomes stronger following the Paris Agreement. Overall, we uncover new evidence on the impact of stock liquidity on corporate climate performance, expanding our understanding of the role of financial markets towards a greener economy.