ESG ratings and firm performance: The moderating role of ESG rating disagreement
We examine the impact of ESG rating disagreement on the relationship between ESG ratings and firm performance. We find that ESG ratings are negatively associated with firm performance. Moreover, ESG rating disagreement positively moderates the relationship between ESG ratings and firm performance, w...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2025-07-01
|
| Series: | Borsa Istanbul Review |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2214845025000699 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1850120055076945920 |
|---|---|
| author | Chengcheng Liu Qianhui Wu Yu-En Lin |
| author_facet | Chengcheng Liu Qianhui Wu Yu-En Lin |
| author_sort | Chengcheng Liu |
| collection | DOAJ |
| description | We examine the impact of ESG rating disagreement on the relationship between ESG ratings and firm performance. We find that ESG ratings are negatively associated with firm performance. Moreover, ESG rating disagreement positively moderates the relationship between ESG ratings and firm performance, weakening the negative impact of ESG ratings on firm performance. Furthermore, additional tests suggest that ESG rating disagreement plays a moderating role only for firms with better disclosure quality and worse corporate governance, greater environmental munificence and dynamism, smaller size, and greater social capital. Overall, our findings support agency theory and the resource-based view, highlighting the importance of rating consistency and the role of high ESG rating scores as an intangible resource that indicates agency problems. However, ESG rating disagreement also serves a governance function. |
| format | Article |
| id | doaj-art-b20d41c614f14e71bd55d1e0677450e6 |
| institution | OA Journals |
| issn | 2214-8450 |
| language | English |
| publishDate | 2025-07-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Borsa Istanbul Review |
| spelling | doaj-art-b20d41c614f14e71bd55d1e0677450e62025-08-20T02:35:29ZengElsevierBorsa Istanbul Review2214-84502025-07-0125481682310.1016/j.bir.2025.05.001ESG ratings and firm performance: The moderating role of ESG rating disagreementChengcheng Liu0Qianhui Wu1Yu-En Lin2School of Business and Management, Jilin University, Changchun, ChinaBusiness School, Central South University, Changsha, ChinaCenter for Quantitative Economics, Jilin University, Changchun, China; International College, Krirk University, Bangkok, Thailand; Corresponding author. Center for Quantitative Economics of Jilin University, No.2699 Qianjin Street, Changchun City, China.We examine the impact of ESG rating disagreement on the relationship between ESG ratings and firm performance. We find that ESG ratings are negatively associated with firm performance. Moreover, ESG rating disagreement positively moderates the relationship between ESG ratings and firm performance, weakening the negative impact of ESG ratings on firm performance. Furthermore, additional tests suggest that ESG rating disagreement plays a moderating role only for firms with better disclosure quality and worse corporate governance, greater environmental munificence and dynamism, smaller size, and greater social capital. Overall, our findings support agency theory and the resource-based view, highlighting the importance of rating consistency and the role of high ESG rating scores as an intangible resource that indicates agency problems. However, ESG rating disagreement also serves a governance function.http://www.sciencedirect.com/science/article/pii/S2214845025000699D22G34 |
| spellingShingle | Chengcheng Liu Qianhui Wu Yu-En Lin ESG ratings and firm performance: The moderating role of ESG rating disagreement Borsa Istanbul Review D22 G34 |
| title | ESG ratings and firm performance: The moderating role of ESG rating disagreement |
| title_full | ESG ratings and firm performance: The moderating role of ESG rating disagreement |
| title_fullStr | ESG ratings and firm performance: The moderating role of ESG rating disagreement |
| title_full_unstemmed | ESG ratings and firm performance: The moderating role of ESG rating disagreement |
| title_short | ESG ratings and firm performance: The moderating role of ESG rating disagreement |
| title_sort | esg ratings and firm performance the moderating role of esg rating disagreement |
| topic | D22 G34 |
| url | http://www.sciencedirect.com/science/article/pii/S2214845025000699 |
| work_keys_str_mv | AT chengchengliu esgratingsandfirmperformancethemoderatingroleofesgratingdisagreement AT qianhuiwu esgratingsandfirmperformancethemoderatingroleofesgratingdisagreement AT yuenlin esgratingsandfirmperformancethemoderatingroleofesgratingdisagreement |