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ESG Rating Disagreement and Corporate Total Factor Productivity:Inference and Prediction

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  • Zhanli Li
  • Zichao Yang

Abstract

This paper examines how ESG rating disagreement (Dis) affects corporate total factor productivity (TFP) in China based on data of A-share listed companies from 2015 to 2022. We find that Dis reduces TFP, especially in state-owned, non-capital-intensive, low-pollution and high-tech firms, green innovation strengthens the dampening effect of Dis on TFP, and that Dis lowers corporate TFP by increasing financing constraints and weakening human capital. Furthermore, XGBoost regression demonstrates that Dis plays a significant role in predicting TFP, with SHAP showing that the dampening effect of ESG rating disagreement on TFP is still pronounced in firms with large Dis values.

Suggested Citation

  • Zhanli Li & Zichao Yang, 2024. "ESG Rating Disagreement and Corporate Total Factor Productivity:Inference and Prediction," Papers 2408.13895, arXiv.org, revised Mar 2025.
    • Handle: RePEc:arx:papers:2408.13895
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    References listed on IDEAS

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    1. Li, Li & Zhang, Du & Li, Rongrong, 2024. "ESG rating disagreement and corporate innovation: Evidence from China," Finance Research Letters, Elsevier, vol. 62(PA).
    2. Avramov, Doron & Cheng, Si & Lioui, Abraham & Tarelli, Andrea, 2022. "Sustainable investing with ESG rating uncertainty," Journal of Financial Economics, Elsevier, vol. 145(2), pages 642-664.
    3. Xue, Qinyuan & Jin, Yifei & Zhang, Cheng, 2024. "ESG rating results and corporate total factor productivity," International Review of Financial Analysis, Elsevier, vol. 95(PA).
    4. Yanan Liang & Cheng Zhang, 2024. "Digital transformation and total factor productivity of enterprises: evidence from China," Economic Change and Restructuring, Springer, vol. 57(1), pages 1-22, February.
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    Cited by:

    1. Ruiying Liu & Yuchi Li & Zhanli Li, 2025. "What influenced the lack of diversity in CSR after the company's losses: evidence from topic modeling," Papers 2509.23424, arXiv.org.
    2. Yang, Shuning & Li, Yuanhui & Ge, Wenxia, 2026. "ESG rating disagreement, executive environmental background, and corporate green innovation: Evidence from China," Finance Research Letters, Elsevier, vol. 90(C).
    3. Gong, Qi & Kong, Zhaoyang & Li, Liang & Dong, Xiucheng & Li, Yang, 2026. "The consequences of hypocrisy: how ESG greenwashing undermines green total factor productivity," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 106(C).

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