The Impact of ESG Disclosure Quality on Sustainable Growth and Asset Pricing Efficiency in China's Industrial Sector

Abstract

This research analyzes the impact of Environmental, Social, and Governance (ESG) disclosure quality on listed industrial companies in China's sustainable development potential, stock pricing efficiency, and the moderating effects of firm size and ownership structure. Panel regression and moderating effect models are applied in the research to investigate the links using data from Bloomberg's ESG Disclosure Score and China Stock Market & Accounting Research (CSMAR) from 2010 to 2020. The findings reveal that quality ESG disclosures significantly enhance both sustainable growth and stock pricing efficiency, with larger firms showing a more substantial impact. However, state-owned enterprises demonstrate a weaker impact compared to private firms. These findings suggest that ESG disclosure quality can boost investor confidence in a firm's long-term growth potential, thereby attracting capital and enhancing the accuracy of asset pricing. This work facilitates in the comprehension of the function of ESG disclosures in the monetary markets and offers guidance to Chinese businesses, investors, and regulatory agencies.