IDEAS home Printed from https://ideas.repec.org/a/eee/finana/v101y2025ics1057521925001267.html
   My bibliography  Save this article

Does ESG rating disagreement affect management tone manipulation?

Author

Listed:
  • Chen, Hua
  • Wang, Zhuang

Abstract

Environmental, Social, and Governance (ESG) ratings play a pivotal role in bridging listed companies with the capital market. However, significant discrepancies exist among rating agencies' assessments of a company's ESG performance, making it challenging for the market to evaluate a firm's sustainable development capabilities accurately. This causes confusion among investors and increases the pressure on corporate management. Based on ratings data for Chinese A-share listed companies from 2015 to 2022, we empirically examine the impact and underlying mechanism of ESG rating disagreement on management tone manipulation. The study finds that: (1) ESG rating disagreement significantly intensifies the degree of management tone manipulation; (2) ESG rating disagreement increases the market pressure on managers, thus motivating them to intensify the degree of tone manipulation, while the noise effect of ESG rating disagreement provides an opportunity for managers to intensify tone manipulation; and (3) under ESG rating disagreement, management tone manipulation significantly increases the risk of stock price crashes for listed companies. The conclusions of this study have significant practical implications for regulators in standardizing ESG rating criteria and information disclosure by listed companies.

Suggested Citation

  • Chen, Hua & Wang, Zhuang, 2025. "Does ESG rating disagreement affect management tone manipulation?," International Review of Financial Analysis, Elsevier, vol. 101(C).
    • Handle: RePEc:eee:finana:v:101:y:2025:i:c:s1057521925001267
    DOI: 10.1016/j.irfa.2025.104039
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1057521925001267
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.irfa.2025.104039?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finana:v:101:y:2025:i:c:s1057521925001267. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620166 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.