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ESG and stock price crash risk revisited: Evidence from mandatory ESG disclosure policy in China

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  • Hao, Jing
  • Sun, Ran
  • Gong, Xu
  • Zhu, Xiaoyu (Ross)

Abstract

This study examines how corporate environmental, social and governance (ESG) information disclosure impacts stock price crash risk (SPCR). Unlike previous studies, it finds that mandatory corporate ESG information disclosure has no significant effect on stock price crash risk in recent years. Heterogeneity analysis shows that ESG disclosure can effectively reduce stock price crash risk in firms with higher corporate governance levels or stronger external supervision. Further research reveals that ESG rating is a key factor in reducing stock price crash risk. This study provides new insights into the economic consequences of ESG disclosure and its underlying mechanisms in the current digital era.

Suggested Citation

  • Hao, Jing & Sun, Ran & Gong, Xu & Zhu, Xiaoyu (Ross), 2025. "ESG and stock price crash risk revisited: Evidence from mandatory ESG disclosure policy in China," Pacific-Basin Finance Journal, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:pacfin:v:91:y:2025:i:c:s0927538x25000666
    DOI: 10.1016/j.pacfin.2025.102729
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