Enterprise sustainable development and green fund concern: The analysis and test of R&D from listed companies in China

• Published in: Energy economics 2023-05, Vol.121, p.106654, Article 106654
• Main Authors: Ma, Wenchao, Duan, Xiaoman, Tang, Yongjun
• Format: Article
• Language: English
• Subjects: Capital flow; Green fund; R&D; Reputation building
• ISSN: 0140-9883; 1873-6181
• DOI: 10.1016/j.eneco.2023.106654

According to active ownership, the development of green funds in the capital market should promote the sustainable development of enterprises. However, when green funds practice green screening strategies, myopic managers may ignore the long-term innovation activities of enterprises because of the attraction of capital flow and the construction of managers' reputations. This study uses long-term and external corporate R&D to explain changes in green fund holdings and further examines the impact of fund characteristics and corporate heterogeneity on green fund holdings. The results show that the greater the corporate R&D, the less the green fund holdings, and the better the short-term financial performance, the weaker the negative relationship, indicating that green funds may be myopic and not concerned about corporate innovation. In particular, this study did not find that the traditional fund adopted a negative screening strategy for enterprises like the green fund. In addition, myopic green funds pay more attention to capital flow attraction and performance ranking improvement and do not pay attention to long-term, sustainable, and market-oriented corporate governance behavior. This conclusion has important implications for understanding and developing China's green fund market.