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When ESG Ratings Disagree: An Information-Intermediation Perspective on Firm Value

Author

Listed:
  • Huiquan Zhang

    (Graduate School of Economics, Kobe University, JAPAN)

  • Junyi Shen

    (Research Institute for Economics and Business Administration, Kobe University, JAPAN)

Abstract

ESG rating disagreement is often viewed as a source of information uncertainty, yet divergent ratings may also encourage information acquisition and interpretation. This study examines the relationship between ESG rating disagreement and firm value from an information-intermediation perspective, focusing on the role of analyst attention. Using data from 893 Chinese A-share listed firms over 2018–2024 and ESG ratings from Bloomberg, Huazheng, and Wind, we find that greater rating disagreement is positively associated with firm value and analyst attention. Bootstrap results further reveal a significant indirect association between rating disagreement and firm value through analyst attention, which remains evident when rating disagreement is lagged by one year. The dimension-specific analysis provides the clearest evidence for the social dimension, although differences in indirect effects across ESG dimensions are not statistically significant. Further analysis indicates that the positive association between social-dimension rating disagreement and analyst attention is weaker among state-owned firms, while the positive association between analyst attention and firm value is weaker when stock trading activity is higher. These findings highlight the role of information intermediation in understanding the valuation implications of ESG rating disagreement and identify dimension-specific patterns and stage-specific boundary conditions.

Suggested Citation

  • Huiquan Zhang & Junyi Shen, 2026. "When ESG Ratings Disagree: An Information-Intermediation Perspective on Firm Value," Discussion Paper Series DP2026-30, Research Institute for Economics & Business Administration, Kobe University.
    • Handle: RePEc:kob:dpaper:dp2026-30
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    File URL: https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2026-30.pdf
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    Keywords

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    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • 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
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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