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ESG ratings and stock price crash risk: Role of herding behavior and network media attention

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  • Tong, Xinle
  • Lyu, Xinyue
  • Jin, Jingyu
  • Bian, Huabin

Abstract

This paper examines whether and how ESG ratings influence stock price crash risk using panel data of China's A-share listed companies from 2010 to 2021. The results show that higher ESG ratings are significantly associated with lower stock price crash risk. Mechanism analysis suggests that ESG ratings reduce crash risk by curbing institutional investor herding, particularly sell-side herding. Furthermore, network media attention strengthens the mitigating effect of ESG ratings, while print media attention plays a comparatively weaker role. Heterogeneity analyses reveal that the inhibitory effect of ESG ratings on crash risk is more pronounced among non-SOE firms, small firms, non-overconfident managers, and companies in the manufacturing sector. These findings remain robust after addressing potential endogeneity and conducting a series of robustness checks.

Suggested Citation

  • Tong, Xinle & Lyu, Xinyue & Jin, Jingyu & Bian, Huabin, 2026. "ESG ratings and stock price crash risk: Role of herding behavior and network media attention," Pacific-Basin Finance Journal, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:pacfin:v:97:y:2026:i:c:s0927538x26000600
    DOI: 10.1016/j.pacfin.2026.103114
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