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ESG rating divergence, investor responses, and managerial myopic behavior

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  • Chen, Yufeng
  • Liu, Yi
  • Wang, Chuwen

Abstract

This paper examines how ESG ratings divergence affects managerial myopic behaviors among Chinese A-share listed firms from 2015 to 2023. The analysis reveals a statistically inverse association between ESG divergence and managerial myopic behaviors, and the negative investor sentiment and reduced institutional ownership serve as potential transmission channels. Notably, the presence of green investors amplifies the dampening effect of ESG divergence on managerial myopic behaviors, whereas information asymmetry mitigates it. The more detailed roles of market competition, managerial equity incentives, and environmental disclosure quality are further examined. The results offer corporate governance dynamics of ESG rating divergence.

Suggested Citation

  • Chen, Yufeng & Liu, Yi & Wang, Chuwen, 2025. "ESG rating divergence, investor responses, and managerial myopic behavior," Finance Research Letters, Elsevier, vol. 86(PD).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pd:s1544612325018410
    DOI: 10.1016/j.frl.2025.108587
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