 Can ESG ratings mitigate managerial myopia? Evidence from Chinese listed companiesJiawei Zhang, Yuan Li, Hanwen Xu and Yi Ding International Review of Financial Analysis, 2023, vol. 90, issue C Abstract: Managerial myopia has an important impact on the future development of companies and the legitimate rights of stakeholders; however, the impact of ESG ratings on managerial myopia is unclear. Based on the ESG rating data of Chinese listed companies from 2009 to 2021, we constructed indicators of managerial myopia through text analysis and found that ESG ratings can significantly inhibit managerial myopia. The results of the mechanism tests show that ESG ratings inhibit managerial myopia by alleviating financing constraints, improving accounting information quality, and enhancing analysts' attention. The results of heterogeneity tests show that a higher degree of market competition indicates a more significant inhibitory effect of ESG ratings on managerial myopia. The economic consequences test revealed that ESG ratings can improve company performance by inhibiting managerial myopia. These conclusions provide important empirical evidence and suggestions for emerging market countries to use ESG ratings effectively to inhibit managerial myopia. Keywords: ESG rating; Managerial myopia; Accounting information quality; Financing constraints; Analyst attention (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:90:y:2023:i:c:s1057521923003940 DOI: 10.1016/j.irfa.2023.102878 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 |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.