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ESG rating disagreement and corporate Total Factor Productivity: Inference and prediction

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  • Li, Zhanli
  • Yang, Zichao

Abstract

This paper examines how ESG rating disagreement (Dis) affects corporate total factor productivity (TFP) in China based on data of A-share listed companies from 2015 to 2022. We find that Dis reduces TFP, especially in state-owned, non-capital-intensive, low-pollution and high-tech firms, green innovation strengthens the dampening effect of Dis on TFP, and that Dis lowers corporate TFP by increasing financing constraints and weakening human capital. Furthermore, XGBoost regression demonstrates that Dis plays a significant role in predicting TFP, with SHAP showing that the dampening effect of ESG rating disagreement on TFP is still pronounced in firms with large Dis values.

Suggested Citation

  • Li, Zhanli & Yang, Zichao, 2025. "ESG rating disagreement and corporate Total Factor Productivity: Inference and prediction," Finance Research Letters, Elsevier, vol. 78(C).
    • Handle: RePEc:eee:finlet:v:78:y:2025:i:c:s1544612325003903
    DOI: 10.1016/j.frl.2025.107127
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    More about this item

    Keywords

    ESG rating disagreement; Total factor productivity; Green innovation; Financing constraints; Human capital; Machine learning;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling

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