Abstract
ESG (Environmental, Social and Governance) is gradually becoming one of the essential indicators for evaluating companies. This paper empirically tested the impact of corporate ESG performance on the stock price crash risk. We discover that the better the ESG performance, the lower the likelihood of a stock price crash. These findings remain after a series of robustness tests such as replacing variables, changing parameter estimation methods, controlling for exogenous shocks, propensity score matching and instrumental variables. Corporate ESG performance mitigates stock price crash risk by boosting green investor attention, improving analyst competency, and reining management behavior. The effect of ESG performance on stock price crash risk is more significant when the city where the firm is located pays less attention to environmental protection and the large degree of marketization. Compared with the central region of China, the ESG performance of firms in the eastern and western regions has a more significant role in mitigating stock price crash risk.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
