Does ESG rating divergence decrease enterprise productivity? Evidence from China

Qiang Tu, Limei Zuo, Anran Liang, Ye Yao and Diyi Liu

Research in International Business and Finance, 2025, vol. 77, issue PB

Abstract: This study explores the impact of ESG rating divergence on enterprise productivity by analyzing a panel dataset of 1024 A-share listed companies in China from 2015 to 2022. The results reveal that ESG rating divergence significantly reduces enterprise productivity by increasing financing constraints and costs, with a more pronounced effect on low-carbon, small-sized, and state-owned firms. Furthermore, variables such as R&D expenditure, internal governance, environmental regulations, and media attention are found to moderate this relationship. The study provides valuable insights for governments in formulating and implementing ESG-related policies.

Keywords: ESG rating divergence; Enterprise productivity; Total factor productivity (TFP); Threshold effect; China (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:77:y:2025:i:pb:s0275531925002235

DOI: 10.1016/j.ribaf.2025.102967

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