ESG rating disagreement and corporate green innovation bubbles: Evidence from Chinese A-share listed firms

Yuan Geng, Jinyu Chen and Ran Liu

International Review of Financial Analysis, 2024, vol. 95, issue PB

Abstract: Environmental, social and governance (ESG) plays a significant role in environmental governance of enterprises, while the sustainability of this function is uncertain in the absence of unified disclosure and scoring standards. Based on a set of data from Chinese A-share listed firms over the period 2015-2021, this paper describes how ESG rating disagreement affects the green innovation bubbles of corporations. The empirical result implies that ESG divergence significantly aggravates corporate green innovation bubbles. Our finding indicates that the managerial myopia is the potential influential mechanism. In addition, from the perspective of external pressure and internal governance, this study concludes that industry competition, media attention and internal control effectiveness would attenuate the positive relationship between ESG disagreement and green innovation bubbles of companies. This study investigates the economic consequences of ESG disagreement from the perspective of corporate green innovation bubbles, expanding the nascent stream of research on the relationship between ESG disagreement and corporate behaviors.

Keywords: ESG disagreement; Green innovation bubbles; Industry competition; Media attention; Internal control effectiveness (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:95:y:2024:i:pb:s1057521924004277

DOI: 10.1016/j.irfa.2024.103495

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