The short board effect of ESG rating and corporate green innovation activities.
This article aims to investigate whether differences in ESG ratings have an impact on corporate green innovation behavior. A high-order fixed effects model was established using panel data from Chinese companies from 2009 to 2022 to empirically test the impact of ESG rating divergence in the Chinese...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Public Library of Science (PLoS)
2024-01-01
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| Series: | PLoS ONE |
| Online Access: | https://doi.org/10.1371/journal.pone.0299795 |
| _version_ | 1827311240730378240 |
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| author | Fuxian Zhu Xiaoli Xu Jiachang Sun |
| author_facet | Fuxian Zhu Xiaoli Xu Jiachang Sun |
| author_sort | Fuxian Zhu |
| collection | DOAJ |
| description | This article aims to investigate whether differences in ESG ratings have an impact on corporate green innovation behavior. A high-order fixed effects model was established using panel data from Chinese companies from 2009 to 2022 to empirically test the impact of ESG rating divergence in the Chinese market on corporate green innovation behavior.The study demonstrates that ESG rating disparity raises the quantity but lowers the quality of businesses' green innovation efforts because of the short board effect. After a series of robustness tests, the results are still valid.The mechanism investigation reveals that both an external pressure channel and an internal strategy adjustment channel are responsible for the impact of ESG rating disparity on green innovation efforts. The asymmetry of corporate green innovation activities is exacerbated by managers' self-interest, whereas the asymmetry of green innovation is mitigated by the caliber of government. According to the heterogeneity analysis, the divergence of a business's ESG rating between large-scale, non-heavy polluting, and places with strong environmental regulations can effectively slow down the asymmetric behavior of enterprise innovation activities. Additional investigation reveals that the phenomenon of ESG rating divergence spreads across industries and geographical areas. The short board effect of ESG rating divergence can be effectively mitigated by improving the quality of enterprise information disclosure and speeding up the digital transformation of businesses. The research conclusion provides marginal contributions on how to improve China's ESG rating system and how enterprises can identify ESG rating differences and make scientific decisions. |
| first_indexed | 2024-04-24T20:15:42Z |
| format | Article |
| id | doaj.art-d8a6527afc824ea39dbffeca00a5f261 |
| institution | Directory Open Access Journal |
| issn | 1932-6203 |
| language | English |
| last_indexed | 2024-04-24T20:15:42Z |
| publishDate | 2024-01-01 |
| publisher | Public Library of Science (PLoS) |
| record_format | Article |
| series | PLoS ONE |
| spelling | doaj.art-d8a6527afc824ea39dbffeca00a5f2612024-03-23T05:31:00ZengPublic Library of Science (PLoS)PLoS ONE1932-62032024-01-01193e029979510.1371/journal.pone.0299795The short board effect of ESG rating and corporate green innovation activities.Fuxian ZhuXiaoli XuJiachang SunThis article aims to investigate whether differences in ESG ratings have an impact on corporate green innovation behavior. A high-order fixed effects model was established using panel data from Chinese companies from 2009 to 2022 to empirically test the impact of ESG rating divergence in the Chinese market on corporate green innovation behavior.The study demonstrates that ESG rating disparity raises the quantity but lowers the quality of businesses' green innovation efforts because of the short board effect. After a series of robustness tests, the results are still valid.The mechanism investigation reveals that both an external pressure channel and an internal strategy adjustment channel are responsible for the impact of ESG rating disparity on green innovation efforts. The asymmetry of corporate green innovation activities is exacerbated by managers' self-interest, whereas the asymmetry of green innovation is mitigated by the caliber of government. According to the heterogeneity analysis, the divergence of a business's ESG rating between large-scale, non-heavy polluting, and places with strong environmental regulations can effectively slow down the asymmetric behavior of enterprise innovation activities. Additional investigation reveals that the phenomenon of ESG rating divergence spreads across industries and geographical areas. The short board effect of ESG rating divergence can be effectively mitigated by improving the quality of enterprise information disclosure and speeding up the digital transformation of businesses. The research conclusion provides marginal contributions on how to improve China's ESG rating system and how enterprises can identify ESG rating differences and make scientific decisions.https://doi.org/10.1371/journal.pone.0299795 |
| spellingShingle | Fuxian Zhu Xiaoli Xu Jiachang Sun The short board effect of ESG rating and corporate green innovation activities. PLoS ONE |
| title | The short board effect of ESG rating and corporate green innovation activities. |
| title_full | The short board effect of ESG rating and corporate green innovation activities. |
| title_fullStr | The short board effect of ESG rating and corporate green innovation activities. |
| title_full_unstemmed | The short board effect of ESG rating and corporate green innovation activities. |
| title_short | The short board effect of ESG rating and corporate green innovation activities. |
| title_sort | short board effect of esg rating and corporate green innovation activities |
| url | https://doi.org/10.1371/journal.pone.0299795 |
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