Does ESG Fulfillment Increase Corporate Valuations? Quasi Natural Test from MSCI Rating
), Abstract
The concept of ESG has become a global consensus, and the fulfillment of corporate ESG responsibilities is a key link in achieving China’s“dual carbon goals”and sustainable development of the whole society. Based on this, the 313 A-share listed companies selected by the MCSI ESG rating were used as the test group samples, and the double difference propensity score matching model (PSM-DID) was used to match the control group samples, and the ESG rating pairing was discussed from the perspective of theoretical mechanism and empirical analysis. The impact mechanism and path of orporate valuations, this study found: ① Whether it is a rating event or a rating score, being selected for ESG ratings can effectively increase the company’s valuation. ② There is a positive correlation between ESG rating adjustments and listed companies’ valuation adjustments, and rating upgrades will promote the increase in valuation, while the downgrade of the rating will lead to the decrease in valuation. However, this correlation has a diminishing effect over time, indicating that the capital market has a process of receiving, digesting, and positive feedback on ESG disclosure information. ③ ESG rating is based on institutional shareholding ratio, stock volatility, annual transaction volume, and financing cost four channels to affect corporate valuation, indicating that ESG has value discovery, risk suppression, information transmission, and financing constraints mitigation. ④ ESG ratings have heterogeneous effects on valuation. Compared with highcarbon companies, industrial companies, and agricultural companies, the valuations of low-carbon companies and service companies are more sensitive to ESG ratings. ⑤ Apply methods such as instrumental variable method, sample reorganization, and replacement of variables for endogeneity and robustness testing, and not change the research conclusions. The research results of this paper have important reference value for establishing the Chinese version of the ESG mandatory information disclosure system, unifying and improving ESG evaluation and rating standards, and promoting the high-quality development and value maximization of listed companies.
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