How Do Free Trade Zones in China Trigger Corporate Green Transition? A Quasi-Experimental Evidence from China

Free Trade Zones (FTZs) are central to China’s institutional opening, but the effect on corporate green transition (CGT) remains unclear. Using Chinese A-share listed firms from 2007 to 2021 and a staggered difference-in-differences design, this study examines whether FTZ establishment promotes CGT. FTZ establishment increases CGT by 9.0%, and this result is robust to a range of identification checks. FTZ establishment is also associated with improved environmental information disclosure, eased financing constraints and reverse knowledge transfer, consistent with these factors serving as potential channels. By measuring CGT beyond green patents, this study provides firm-level evidence that institutional opening can support corporate green transition.