The Reverse Pressure Effect of ESG Rating Divergence on High-Quality Corporate Development

Main Article Content

Xin Li
Business School, Guangdong Ocean University, Yangjiang, 529500, China

Wei Jiang
Business School, Guangdong Ocean University, Yangjiang, 529500, China

DOI: https://doi.org/10.70267/esg2026.v3n3.3548

Keywords

ESG rating divergence, high-quality corporate development, total factor productivity, reverse pressure effect

Abstract

As ESG concepts become increasingly integrated into China's capital market, the divergence in ESG ratings across different rating agencies has become an increasingly prominent phenomenon. This paper examines the Chinese A-share listed companies from 2012 to 2024 empirically to investigate the influence of the differences in ESG ratings on the excellent development of enterprises (assessed by total factor productivity). The research results show that the differences in ESG ratings can remarkably improve the total factor productivity of the enterprise, exerting a "stimulating effect" instead of a suppressing effect. This conclusion is also confirmed by several robustness tests, such as variable replacement, modification of model specification and instrumental variables method. The heterogeneity analysis indicates that the "stimulating effect" is more obvious in the companies with high analyst coverage, low managerial ownership and a well-structured organization. This study implies that the disagreement in ESG ratings may motivate companies to improve the quality of their development. It gives a new insight into the economic impacts of the differences in ESG ratings and proposes some feasible recommendations for regulators and enterprises.

Abstract 0 | PDF Downloads 0

References

  • [1] Xi Jinping. (2022). Hold high the great banner of socialism with Chinese characteristics and strive in unity to build a modern socialist country in all respects: Report delivered at the 20th National Congress of the Communist Party of China. Beijing, China: People’s Publishing House.
  • [2] Zhang, Y. Q., Yang, H. Y., & Zhang, X. Y. (2023). ESG rating divergence and the cost of debt capital. Financial Theory, 15(4), 22–43+124.
  • [3] Chen, P. C., Li, Z., & He, Q. L. (2024). Does ESG rating divergence necessarily generate negative effects? Evidence from the perspective of debt financing costs. Technology Economics, 43(5), 117–136.
  • [4] Huang, X. W., An, X. X., & Lv, W. M. (2025). Does ESG rating divergence affect corporate credit ratings? Journal of Financial Economics Research, 40(3), 124–139.
  • [5] Liu, X. Q., Yang, Q. Q., & Hu, J. (2023). ESG rating divergence and stock price synchronicity. China Soft Science, (8), 108–120.
  • [6] Chen, H. T., Yin, H. F., Zhang, T. S., & Huang, J. (2025). Does ESG rating divergence affect capital market pricing efficiency? Evidence from stock price synchronicity of listed companies. Journal of Finance and Economics, 51(5), 65–80. https://doi.org/10.16538/j.cnki.jfe.20240116.101
  • [7] Chen, S. F., Guo, W. L., & Li, H. X. (2025). The impact of ESG rating divergence on corporate green technological innovation. Journal of Xi’an University of Finance and Economics, 38(6), 51–65. https://doi.org/10.19331/j.cnki.jxufe.20250520.002
  • [8] Dong, C., Dong, X. C., Jiang, Q. Z., & Tian, J. Y. (2024). The impact and mechanism of ESG rating divergence on green innovation of listed companies. China Population, Resources and Environment, 34(8), 103–113.
  • [9] Guo, J. Z., Xie, Y., & Liu, X. L. (2026). Research on the impact of ESG rating divergence on green innovation in manufacturing enterprises. Statistics and Management, 41(2), 133–147. https://doi.org/10.16722/j.issn.1674-537x.2026.02.013
  • [10] Berg, F., Koelbel, J. F., & Rigobon, R. (2022). Aggregate confusion: The divergence of ESG ratings. Review of Finance, 26(6), 1315–1344. https://doi.org/10.1093/rof/rfac033
  • [11] Christensen, D. M., Serafeim, G., & Sikochi, A. (2022). Why is corporate virtue in the eye of the beholder? The case of ESG ratings. The Accounting Review, 97(1), 147–175. https://doi.org/10.2308/TAR-2019-0506
  • [12] Kimbrough, M. D., McVay, S. E., & Wang, L. (2024). Does voluntary ESG reporting resolve disagreement among ESG rating agencies? European Accounting Review, 33(1), 15–47. https://doi.org/10.1080/09638180.2022.2088588
  • [13] Wang, L., Li, K., & Ding, L. L. (2025). ESG rating agency divergence and fund investment strategy choice. Journal of Shanghai University of Finance and Economics, 27(5), 93–107. https://doi.org/10.16538/j.cnki.jsufe.2025.05.007
  • [14] Jiang, B., & Ma, C. (2025). ESG rating divergence and supply chain bargaining power. Journal of the University of Jinan (Social Science Edition), 35(3), 137–148. https://doi.org/10.20004/j.cnki.ujn.2025.03.012
  • [15] Huo, R. (2024). Does corporate ESG rating divergence affect customer stability? (Master’s thesis, Dongbei University of Finance and Economics). https://doi.org/10.27006/d.cnki.gdbcu.2024.001647
  • [16] Lu, M. F., Yang, Z., & Chen, J. ESG rating divergence and corporate persistent innovation. Studies in Science of Science, 1–15. https://doi.org/10.16192/j.cnki.1003-2053.20260130.002
  • [17] Yang, C. (2025). Does ESG rating divergence affect green collaborative innovation? The moderating effect of stakeholder relationships. Journal of Financial Development Research, (7), 15–25. https://doi.org/10.19647/j.cnki.37-1462/f.2025.07.002
  • [18] Mark C. Suchman. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 20(3), 571–610. https://doi.org/10.5465/amr.1995.9508080331
  • [19] Dong, Y. Q. (2025). Research on the impact of ESG rating divergence on corporate demand for high-quality auditing (Master’s thesis, Yangtze University). https://doi.org/10.26981/d.cnki.gjhsc.2025.000464
  • [20] Wang, R., Wang, W. H., & Song, S. S. (2025). ESG rating divergence and corporate financing constraints: Impact effects, transmission channels, and heterogeneity characteristics. Collected Essays on Finance and Economics, (5), 55–66. https://doi.org/10.13762/j.cnki.cjlc.20250303.001
  • [21] Zhao, Y. H., Sun, Y., Feng, T. W., & Liu, Y. (2024). How does supplier ESG rating divergence affect corporate operational resilience? China Industrial Economics, (11), 174–192. https://doi.org/10.19581/j.cnki.ciejournal.2024.11.010
  • [22] Huang, B., Li, H. T., Liu, J. Q., & Lei, J. H. (2023). Digital technological innovation and high-quality development of Chinese enterprises: Evidence from corporate digital patents. Economic Research Journal, 58(3), 97–115.
  • [23] Shen, K. R., Qiao, G., & Lin, J. W. (2024). Intelligent manufacturing policies and high-quality development of Chinese enterprises. The Journal of Quantitative & Technical Economics, 41(2), 5–25. https://doi.org/10.13653/j.cnki.jqte.20231214.008
  • [24] Zhou, Z. J., Ding, X. J., & San, Z. Y. (2023). ESG rating divergence and audit risk premium. Auditing Research, (6), 72–83.
  • [25] Fang, X. M., & Hu, D. (2023). Corporate ESG performance and innovation: Evidence from A-share listed companies. Economic Research Journal, 58(2), 91–106.
  • [26] He, T. M., Li, Y. P., Wang, Z., & Tan, Z. D. (2023). Does ESG rating divergence improve voluntary information disclosure of listed companies? Accounting and Economics Research, 37(3), 54–70. https://doi.org/10.16314/j.cnki.31-2074/f.2023.03.006
  • [27] Xie, H. J., & Lv, X. (2022). Responsible international investment: ESG and China’s outward foreign direct investment. Economic Research Journal, 57(3), 83–99.
  • [28] Zhu, H. J., He, X. J., & Tao, L. (2007). Can securities analysts improve the efficiency of China’s capital market? Empirical evidence based on stock price synchronicity and stock price information content. Journal of Financial Research, (2), 110–121.
  • [29] Pan, Y., Dai, Y. Y., & Lin, C. Q. (2011). Information opacity, analyst coverage, and stock price crash risk. Journal of Financial Research, (9), 138–151.
  • [30] Xi, L. S., & Wang, Y. (2022). Corporate ESG information disclosure and stock price crash risk. On Economic Problems, (8), 57–64. https://doi.org/10.16011/j.cnki.jjwt.2022.08.003
  • [31] Morck, R., Wolfenzon, D., & Yeung, B. (2005). Corporate governance, economic entrenchment, and growth. Journal of Economic Literature, 43(3), 655–720. https://doi.org/10.1257/002205105774431252
  • [32] Zhu, D. S. (2010). Controlling shareholders, equity balance, and corporate dividend policy choice. Journal of Shandong University (Philosophy and Social Sciences Edition), (3), 80–87.
  • [33] Desai, P. S., Kalra, A., & Murthi, B. P. S. (2008). When old is gold: The role of business longevity in risky situations. Journal of Marketing, 72(1), 95–107. https://doi.org/10.1509/jmkg.72.1.95
  • [34] Jiang, C. X., Chua, R. Y. J., Kotabe, M., & Murray, J. Y. (2011). Effects of cultural ethnicity, firm size, and firm age on senior executives’ trust in their overseas business partners: Evidence from China. Journal of International Business Studies, 42(9), 1150–1173. https://doi.org/10.1057/jibs.2011.35
  • [35] Ma, S., Murfin, J., & Pratt, R. (2022). Young firms, old capital. Journal of Financial Economics, 146(1), 331–356. https://doi.org/10.1016/j.jfineco.2021.09.008
  • [36] Yuan, D. Y., Li, D. G., & Song, X. N. (2018). Industrial agglomeration, firm age, and government subsidies. Finance & Trade Economics, 39(9), 39–56. https://doi.org/10.19795/j.cnki.cn11-1166/f.2018.09.003
  • [37] Yang, L. Q., Liang, Q. Z., & Kang, H. (2016). National innovation systems and corporate R&D investment based on the moderating effect of firm characteristics. Chinese Journal of Management, 13(5), 707–714.

Article Sidebar

PDF
Published
Jul 13, 2026
Issue
Vol. 3 No. 3 (2026)
Section
Research Articles
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite

Li, X., & Jiang, W. (2026). The Reverse Pressure Effect of ESG Rating Divergence on High-Quality Corporate Development. Environment, Social and Governance, 3(3), 35-48. https://doi.org/10.70267/esg2026.v3n3.3548