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ESG performance and stock price crash risk: The dual perspectives of corporate intelligent transformation and green innovation efficiency

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  • Wang, Xiaowei Vivian

Abstract

This study examines the mechanisms and contextual factors through which corporate ESG performance influences the risk of stock price crashes, drawing on a sample of A-share listed companies in China. The results indicate that stronger ESG performance markedly lowers the likelihood of future stock price collapses. Analysis of the transmission channels shows that part of this risk-reduction effect is attributable to the facilitation of corporate intelligent transformation, which acts as a key mediating mechanism. Additionally, tests for moderating effects reveal that green innovation efficiency amplifies the inverse association between ESG performance and crash risk, implying that the mitigating role of ESG is stronger in companies with more efficient green innovation practices. Furthermore, heterogeneity tests reveal that the risk-reducing effect of ESG is particularly pronounced in enterprises that are not heavily polluting, those in highly competitive sectors, and firms with elevated investor sentiment. This study clarifies the underlying processes by which ESG performance affects stock price stability, offering empirical support to guide corporate efforts in refining ESG implementation and advancing digital transformation.

Suggested Citation

  • Wang, Xiaowei Vivian, 2026. "ESG performance and stock price crash risk: The dual perspectives of corporate intelligent transformation and green innovation efficiency," Finance Research Letters, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:finlet:v:95:y:2026:i:c:s1544612326002722
    DOI: 10.1016/j.frl.2026.109742
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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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