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ESG Rating Divergence and Corporate Business Risk

Unknown author

Journal of Competitiveness2025https://doi.org/10.7441/joc.2025.02.10article
AJG 2
Weight
0.37

What the paper says

Focusing on China's publicly listed companies from 2015 to 2022, we analyze how ESG rating divergence (ESGD) affects corporate business risk.We found a significant positive relationship between ESGD and corporate business risk.The rating divergence increases corporate business risk by exacerbating corporate financing constraints, demising investor confidence, and harming corporate reputation.We further investigate the differential impact of different degrees of ESGD on corporate business risk and reveal a double-threshold effect -when enterprises' ESGD is between the two threshold levels, the impact is less strong.Further heterogeneity analysis finds that the impact of ESGD on business risk is smaller in SOEs and for enterprises with timely accounting information disclosure, in organizations with good ESG performance and audited by Big 4 accounting firms.Our findings suggest that ESGD can weaken a firm's market competitiveness.Moreover, our study has important policy and practice implications for companies, investors, and regulatory agencies and enhances our understanding of sustainabilityrelated firms' competitiveness.

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https://doi.org/https://doi.org/10.7441/joc.2025.02.10

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@article{unknown2025,
  title        = {{ESG Rating Divergence and Corporate Business Risk}},
  author       = {Unknown author},
  journal      = {Journal of Competitiveness},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.7441/joc.2025.02.10},
}

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ESG Rating Divergence and Corporate Business Risk

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.