ESG Disagreement and Stock Price Crash Risk: Evidence from China

Minghua Dong, Miaomiao Li, Hongxia Wang () and Yuanyuan Pang
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Minghua Dong: Nanjing University of Aeronautics and Astronautics
Miaomiao Li: Nanjing University of Aeronautics and Astronautics
Hongxia Wang: Nanjing University of Finance and Economics
Yuanyuan Pang: China Life Insurance (Group) Company

Asia-Pacific Financial Markets, 2025, vol. 32, issue 1, No 11, 267-299

Abstract: Abstract The ESG ratings have been focused in response to the requirements for green development. However, the uncertainty created by ESG disagreements has caused market participants to question their reliability. This study empirically examines how ESG disagreements affect stock price crash risk based on data from Shanghai and Shenzhen A-share listed companies. We find that ESG disagreement significantly reduces stock price crash risk and that this relationship is largely driven by environmental disagreement. The mechanism analysis suggests that ESG disagreement increases media attention, subsequently leading to a reduction in stock price crash risk. Additional analysis shows that the driving effect of environmental disagreement is more significant in non-heavy-polluting industries. Positive environmental protection policies help reduce stock price crash risk.

Keywords: ESG disagreement; Stock price crash risk; Environmental disagreement; Driving effect (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10690-024-09453-y

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