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ESG rating disagreement and corporate innovation: Evidence from China

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  • Li, Li
  • Zhang, Du
  • Li, Rongrong

Abstract

This paper examines the impact of ESG rating disagreement on corporate innovation using data on Chinese listed firms from 2010 to 2021. We robustly find that ESG rating disagreement significantly reduces corporate innovation. Further research reveals that ESG rating disagreement can impede corporate innovation by amplifying firms' financing constraints and diminishing their human capital. In addition, the dampening effect of ESG rating disagreement on corporate innovation is more pronounced among firms with higher ESG ratings. The research in this paper holds importance for a more comprehensive and objective understanding of ESG rating disagreement.

Suggested Citation

  • Li, Li & Zhang, Du & Li, Rongrong, 2024. "ESG rating disagreement and corporate innovation: Evidence from China," Finance Research Letters, Elsevier, vol. 62(PA).
    • Handle: RePEc:eee:finlet:v:62:y:2024:i:pa:s1544612324001260
    DOI: 10.1016/j.frl.2024.105096
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    References listed on IDEAS

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    Cited by:

    1. Zhanli Li & Zichao Yang, 2024. "ESG Rating Disagreement and Corporate Total Factor Productivity:Inference and Prediction," Papers 2408.13895, arXiv.org, revised Oct 2024.

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