ESG controversies and investor trading behavior in the Korean market

Jeongseok Bang, Doojin Ryu and Jinyoung Yu

Finance Research Letters, 2023, vol. 54, issue C

Abstract: This study examines how investor trading behavior changes following environmental, social, and governance (ESG) controversies by analyzing textual news data. We use deep-learning-based natural language processing to classify news articles into specific categories of controversy. ESG controversies generally increase investors’ trading activities regardless of their type, while their reactions differ by ESG pillar. Interestingly, domestic institutions tend to sell stocks with controversies.

Keywords: ESG; Institutional investor; Investor trading behavior; Natural language processing (search for similar items in EconPapers)
JEL-codes: G12 G14 G23 M14 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:54:y:2023:i:c:s154461232300123x

DOI: 10.1016/j.frl.2023.103750

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