With the release of the first two International Financial Reporting Standards on Sustainability(IFRS S1,S2),how to improve corporate ESG performance to promote sustainable development has become a hot topic in practice and theory.In this paper,we utilize the quasi-natural experimental environment provided by the trading mechanism of"Shanghai-Shenzhen-Hong Kong Stock Connect"to construct a multi-temporal double-difference model to empirically examine the impact of cap-ital market liberalization on corporate ESG performance.It is found that the implementation of the trading mechanism improves the ESG performance of firms by increasing the market attention of the target firms and optimizing the investor structure,and this finding is still valid after a series of robustness tests,and the effect is more obvious in non-state-owned firms and firms with higher quality of information disclosure.In addition,firms'green innovation activities can strengthen the effect of capital market liberalization on firms'ESG performance.The study enriches the empirical evidence that capital market liberalization promotes firms'sustainable development,and provides a new perspective for the current investigation of the factors influencing firms'ESG performance.
capital market liberalizationShanghai-Shenzhen-Hong Kong Stock Connectgreen innovationinvestor structurecorporate ESG performance
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