IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v103y2025ics1059056025007105.html
   My bibliography  Save this article

The double-edged effects of the ESG rating on analyst forecast performance

Author

Listed:
  • Wang, Lei
  • Sha, Yifan
  • Li, Yue
  • Wang, Tongyu

Abstract

As information intermediaries, financial analysts play an important role in enhancing market efficiency by synthesizing and disseminating information. The emergence of ESG rating provides analysts with novel, non-financial information and affects their forecast performance. We investigate the impact of the introduction of ESG rating(s) on analysts’ forecasts in China. Evidence suggests that the initial launch of ESG rating significantly helps the forecast and conveys incremental information; on the other edge, this benefit diminishes as more rating agencies enter the market, and the accuracy of analyst forecasts is weakened by the divergence among agencies. Additionally, the disagreement among ratings causes the poor performance of analysts, because ESG divergence distracts analysts’ attention and increases the cost of information acquisition.

Suggested Citation

  • Wang, Lei & Sha, Yifan & Li, Yue & Wang, Tongyu, 2025. "The double-edged effects of the ESG rating on analyst forecast performance," International Review of Economics & Finance, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:reveco:v:103:y:2025:i:c:s1059056025007105
    DOI: 10.1016/j.iref.2025.104547
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056025007105
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2025.104547?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:103:y:2025:i:c:s1059056025007105. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.