Abstract:    Over the past 40 years of reform and opening up, one of the great progresses made in China′s financial system reform is to optimize the investor structure and improve the efficiency of capital allocation. The capital market has entered a new stage of opening up. With the introduction of Shanghai Hong Kong Stock Connect, Shenzhen Hong Kong Stock Connect and a series of other opening-up measures and the gradual improvement of the capital market system, the international influence of China′s capital market has significantly increased, which has important practical significance for the development principle of "financial services for the real economy". Enterprises not only undertake the task of creating new economic growth points and improving the development quality of the real economy, but also play a driving role in accelerating the development of low-carbon economy and promoting the green transformation of industrial structure. Therefore, it is an important question to investigate how the internationalization of capital market affects the green development of enterprises. As one of the main manifestations of green development or transformation of enterprises, green innovation investment can enhance the positive expectations of investors and the public on enterprises. The internationalization of the capital market not only introduces more foreign investors, but also increases the constraint strength of public opinion on enterprises, which may become an important factor affecting enterprises′ investment in green innovation.The capital market opening to the outside world is an important measure in China, and its influencing factors and economic consequences are deeply concerned by the practitioners. This paper used the financial industry FDI limit index to construct an indicator of the impact of internationalization of capital market on enterprise behavior, tested the impact of internationalization of capital market on green innovation activities of enterprises, and selected A-shares to be included in the Morgan Stanley Capital International Index (MSCI) as a Quasi-natural experiment for further analysis. The study found that the greater the impact of internationalization of capital market on enterprises, the more active their green innovation activities are. After using the PSM and DID models to solve endogenous problems, the conclusions are still stable. The mechanism test found that the promotion of enterprises′ willingness to disclose information, the strengthening of public media′s supervision function and the easing of financing constraints are important mechanisms for internationalization of capital market to promote enterprises green innovation. The result of sample grouping test showed that the impact of internationalization of capital market is more obvious in industries restricted by green credit policy and local environmental protection law enforcement is low for non-patent intensive enterprises. Further research showed that after A-shares are included in MSCI, the higher the shareholding ratio and growth rate of foreign investors, the better the performance of green innovation of enterprises. This study not only revealed the impact mechanism of internationalization of capital market on enterprise green innovation, but also provided empirical evidence for China′s implementation of the series of reforms of "deepening the opening of capital markets" and "financial services for the real economy".Compared with previous studies, the possible contributions of this paper lie in: First, it will expand the research field of capital market opening to the outside world. The existing literature mainly focused on the research on the relationship between capital market opening and stock price information, audit quality and enterprise investment. This paper examined the impact of internationalization of capital market on micro-enterprises green innovation, which is an innovative attempt in the research field of capital market opening to the outside world; Second, this paper has broken away from the previous research framework that mainly focuses on the impact of environmental regulation tools, industry characteristics and corporate governance on corporate green innovation, and reveals the impact mechanism of internationalization of capital market on corporate green innovation. In addition, the conclusion of this paper will highlight the importance of internationalization of capital market for the high-quality development of China′s micro enterprises.In the context of China′s deepening opening-up, it is of great research value to deeply understand and grasp how foreign investors play a governance role in China′s capital market. The research conclusion of this paper confirmed the importance of the capital market opening to the outside world for the green innovation of China′s micro-enterprises, and has an important enlightenment role in promoting the implementation of the series of reforms of "deepening the opening of the capital market to the outside world" and "enhancing the ability of financial services to the real economy" in China.

Key words: internationalization of capital market, Morgan Stanley Capital International Index (MSCI), green innovation of enterprises