The Construction of Two-tier Equity Structure of Joint Stock Companies in China from the Perspective of Green Finance

Abstract

In this modern era business and changing landscapes, the construction of a two-tier equity structure within Chinese joint stock companies has proved to be a very innovative and augmented strategy. This paper scrutinizes the unorthodox integration of financial architecture and ecological sustainability by evaluation of this structure through the lens of green finance. The interlacing of the principles of environmental responsibility with mainframes of corporate governance enlightens the unique dynamics and outcomes of the two-tier equity model. This study comprehensively analyses and elucidates how this mainframe facilitates the shareholder interests as they align with long-term ecological objectives. This in turn cultivates a promising environment for sustainable development. As we draw onto the theoretical calculations and perspective supplemented with empirical evidences, this research study gives birth to amenable perspectives that the green finance has the potential to transform the Chinese context by shaping the future trajectory of corporate structures. Using a dataset consisting of Chinese publicly traded companies from 2001-2017, this study investigates how a lack of funding has led to a scarcity of environmentally friendly technologies in China. We also investigate how green finance laws help businesses overcome financial hurdles on the road to eco-friendly innovation. It has been observed that a company's capacity for green innovation decreases as its financial constraints grow, and that privately held businesses are at greater danger of this happening than government-owned ones.