The Impact of ESG Rating Discrepancies on Corporate Financial Flexibility

Yiying Qi ()
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Yiying Qi: Qingdao University of Technology, School of Business

A chapter in Proceedings of the 2026 6th International Conference on Enterprise Management and Economic Development (ICEMED 2026), 2026, pp 208-219 from Springer

Abstract: Abstract This paper examines the impact of ESG rating discrepancies on corporate financial flexibility and the underlying mechanisms. The results indicate that ESG rating discrepancies have a significant positive effect on financial flexibility. Mechanism analysis reveals that these discrepancies enhance financial flexibility by reducing financing constraints and attracting patient capital. Heterogeneity analysis suggests that this positive effect is more pronounced among heavily polluting enterprises. In light of these findings, the following policy recommendations are proposed: at the policy level, efforts should be accelerated to improve the ESG rating system, optimize green finance policies, and implement differentiated regulation. At the corporate level, firms should rationally address ESG rating divergences and actively engage with patient capital. High-pollution enterprises should increase environmental protection investments and green technology R&D, establish risk early-warning mechanisms, and leverage rating divergences to effectively enhance financial flexibility and risk-resilience.

Keywords: ESG rating divergence; financial flexibility; financing constraints; patient capital (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6239-719-4_24

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DOI: 10.2991/978-94-6239-719-4_24

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