EconPapers    
Economics at your fingertips  
 

News or noise? ESG disclosure and stock price synchronicity

Lei Ruan, Jianing Li and Siqi Huang

International Review of Financial Analysis, 2024, vol. 95, issue PB

Abstract: Environmental, social, and governance (ESG), as an important mechanism to promote the sustainable development of the capital market, is bound to have a significant impact on its stock price synchronicity. This paper examines the impact and mechanism of corporate ESG disclosure on stock price synchronicity using data from Chinese A-share listed companies from 2013 to 2022. It analyzes the dual perspectives of information efficiency and noise trading. The findings support the noise trading perspective, as ESG disclosure significantly reduces the impact of noise on stock prices and enhances firms' stock price synchronicity, and the conclusions still hold after a series of endogeneity and robustness tests. It is also found that the positive impact of ESG disclosure on stock price synchronicity is mainly realized through the paths of reducing accrual earnings management and increasing analyst attention. Moreover, the positive impact of ESG disclosure on stock price synchronicity is more significant in the group of non-state-owned enterprises, higher quality of internal control, non-polluting industries, and less market-oriented enterprises. The study in this paper not only enriches the related literature in the field of ESG disclosure and stock price synchronicity but also reaffirms the noise trading theory of the irrational school.

Keywords: ESG disclosure; Stock price synchronicity; Earnings management; Analyst attention (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1057521924004150
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:95:y:2024:i:pb:s1057521924004150

DOI: 10.1016/j.irfa.2024.103483

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2025-03-19
Handle: RePEc:eee:finana:v:95:y:2024:i:pb:s1057521924004150