Corporate ESG disclosure and regulatory inquiry: Evidence from comment letters on annual reports

Xin Li, Yan Tong and Guoquan Xu

The North American Journal of Economics and Finance, 2025, vol. 77, issue C

Abstract: Using a sample of Chinese A-share listed firms from 2015 to 2021, this paper finds that corporate ESG disclosure reduces the likelihood of regulatory inquiries. Channel analysis demonstrates that corporate ESG disclosure lowers regulatory inquiry risk by reducing agency costs and business risks. This relationship is more pronounced in firms that have less disagreement in ESG ratings, have higher levels of digital transformation, operate in highly polluting industries, or are situated in more favorable institutional environments. Further analysis indicates that corporate ESG disclosure is associated with a lower probability of delayed responses by firms, the need for verification opinions from intermediary institutions by stock exchanges, and inquiries regarding risk information from stock exchanges. The study expands the literature on the determinants of regulatory inquiries. It also sheds light on corporations’ improvement of information disclosure.

Keywords: ESG, Stock Exchange; Regulatory Inquiry; Comment Letter; Information Disclosure (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1062940825000282
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:ecofin:v:77:y:2025:i:c:s1062940825000282

DOI: 10.1016/j.najef.2025.102388

Access Statistics for this article

The North American Journal of Economics and Finance is currently edited by Hamid Beladi

More articles in The North American Journal of Economics and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().