Guiding enterprises to effectively implement the concept of ESG is of great significance for promoting the transformation and upgrading of China's industrial structure and achieving high-quality economic development.However,how to empower the sustainable development of real economy through the capital market has not been fully studied.This paper theoretically analyzes the impact and mechanism of stock liquidity on corporate ESG performance,and empirically tests the data of Shanghai and Shenzhen A-share listed companies from 2010 to 2021.The results show that stock liquidity significantly improves the corporate ESG performance,and this conclusion is still valid after a lot of robustness tests including PSM-DID.Furthermore,stock liquidity improves corporate ESG performance by alleviating information asymmetry and strengthening both internal and external governance.Additionally,this promotion effect is more significant in the enterprises with higher degree of QFII shareholding,executive compensation incentive,analyst coverage and under weaker market competition.In particular,stock liquidity amplifies the green innovation-driving effect of ESG.This paper reveals the positive effect of the microstructure of capital market on the sustainable development of the real economy.Therefore,it is suggested to further deepen the reform of capital market,enhance the top-level system design,increase the degree of opening,shore up market confidence,and eventually improve stock liquidity.
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