IDEAS home Printed from https://ideas.repec.org/a/sae/sagope/v14y2024i2p21582440241262921.html
   My bibliography  Save this article

Can Foreign Institutional Investors Stimulate Environmental Innovation? Evidence From China’s Stock Market Liberalization

Author

Listed:
  • Zhongcheng Wang
  • Yiheng Cheng
  • Xinhong Xue

Abstract

In this paper, the Mainland-Hong Kong Stock (MHKS) Connect Program is used as a quasi-natural experience to study the relationship between foreign institutional investors and environmental innovation. Using the sample of the Chinese mainland A-Share market industrial firms from 2012 to 2019 and Difference-In-Difference model, we find a promoting effect of the foreign institutional investors on the mainland firms’ environmental innovation. The mediating effect tests prove that foreign institutional investors inspire environmental innovation through monitoring channel (supervising the environmental innovation), insurance channel (tolerating innovation failures) and knowledge spillover channel. It is noteworthy that only firms in the regions of high innovation capacity benefit from the knowledge spillover channel. Our study implies that environmental innovation can benefit from the opening-up of the stock market if it can attract foreign institutional investors who fulfill the roles of monitoring, insurance and knowledge spillover.

Suggested Citation

  • Zhongcheng Wang & Yiheng Cheng & Xinhong Xue, 2024. "Can Foreign Institutional Investors Stimulate Environmental Innovation? Evidence From China’s Stock Market Liberalization," SAGE Open, , vol. 14(2), pages 21582440241, June.
    • Handle: RePEc:sae:sagope:v:14:y:2024:i:2:p:21582440241262921
    DOI: 10.1177/21582440241262921
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/21582440241262921
    Download Restriction: no
    File URL: https://libkey.io/10.1177/21582440241262921?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:sagope:v:14:y:2024:i:2:p:21582440241262921. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.