Associate Professor Zhenxing Wu, a researcher of the Base, has published a paper titled “Green Factory Certification, information asymmetry, and stock liquidity” in Finance Research Letters.

Abstract: This paper investigates the causal effect of China’s Green Factory Certification (GFC) on firm stock liquidity. Using data from Chinese listed firms from 2011 to 2023, we treat GFC as a quasi-experiment and apply a staggered difference-in-differences specification to establish the causality. We find that firms receiving GFC experience significant improvements in stock liquidity compared to those uncertified. Mechanism analyses reveal that increased attention and enhanced financial information precision jointly reduce asymmetric information, thereby facilitating better liquidity. In addition, we find that the effects are more pronounced among non-state-owned enterprises, heavily polluting industries, and firms located in regions with weaker environmental regulations. Our findings highlight the potential of sustainability programs led by governments to improve financial market performance.

Keywords: Green factory certification; Stock liquidity; Information asymmetry; Attention; Financial transparency

Link: https://erj.ajcass.com/#/issue?id=122073&year=2025&issue=12

Author profile

Zhenxing Wu, Associate Professor of annual salary, School of Finance, Zhongnan University of Economics and Law, Researcher of Digital Technology and Modern Finance Innovation and Intellectual Introduction Base. Research areas include the application of market microstructure theory to international finance, asset pricing and corporate finance. The research results have been published in the Journal of International Money & Finance, Journal of Corporate Finance and other international journals.