Does cross-listing on the Hong Kong stock exchange affect Chinese firms’ green innovation? New evidence
Green innovation is a costly and risky process that enables firms to improve their energy efficiency and maintain sustainable growth. In this study, we investigate whether cross-listing shares in developed markets encourages firms from developing markets to engage in green innovation. By analyzing a...
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| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2025-03-01
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| Series: | Borsa Istanbul Review |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2214845025000109 |
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| Summary: | Green innovation is a costly and risky process that enables firms to improve their energy efficiency and maintain sustainable growth. In this study, we investigate whether cross-listing shares in developed markets encourages firms from developing markets to engage in green innovation. By analyzing a sample of firms that are simultaneously listed on the Chinese A-share market and the Hong Kong Stock Exchange, the study finds that cross-listed firms have more green patent applications, patent grants, and citations than non-cross-listed firms. The transmission mechanisms suggest that cross-listed firms are motivated by foreign investors’ expectations of sustainable growth to engage in green innovation. Furthermore, in developed capital markets, high-quality firms can receive capital at low costs and use it to support valuable green innovation. As a result, cross-listed firms demonstrate better environmental performance after cross-listing, and green innovation products (patents) enable cross-listed firms to improve their financial performance. Overall, we establish a relationship between cross-listing and green innovation and highlight a new factor that leads firms to undertake valuable green innovation. |
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| ISSN: | 2214-8450 |