Peer effects of corporate ESG practice: Incorporating the impact of ESG rating disagreement

Shaolin WANG; Jianli WANG; Minghua DONG; Jingyuan LI

doi:10.1016/j.ememar.2025.101411

Peer effects of corporate ESG practice: Incorporating the impact of ESG rating disagreement

Shaolin WANG
, Jianli WANG
, Minghua DONG^*
, Jingyuan LI

^*Corresponding author for this work

Department of Operations and Risk Management

Research output: Journal Publications › Journal Article (refereed) › peer-review

Abstract

This study investigates peer effects in ESG practice by analyzing Chinese listed companies from 2009 to 2022. After incorporating the impact of ESG rating disagreement, we document the significant existence of peer effects of ESG practice. Mechanism analysis shows these effects are amplified by high information uncertainty and information transmission efficiency. Heterogeneity tests reveal stronger peer effects in non-state-owned, follower, and non-heavy-polluting firms. Additionally, we find peer effects of ESG practice is strongest for social activities and exhibit regional spillovers. Furthermore, this imitation is selective, as firms replicate positive ESG practice rather than controversies.

Original language	English
Article number	101411
Number of pages	17
Journal	Emerging Markets Review
Volume	71
Early online date	25 Nov 2025
DOIs	https://doi.org/10.1016/j.ememar.2025.101411
Publication status	E-pub ahead of print - 25 Nov 2025

Bibliographical note

Publisher Copyright:
Copyright © 2025. Published by Elsevier B.V.

Funding

This work is supported by National Natural Science Foundation of China with Grant No. 72571134, 72071109, Postgraduate Research & Practice Innovation Program of Jiangsu Province with Grant Number KYCX25_0649, and Lingnan University Direct Grant DR25C4.

Keywords

ESG practice
ESG rating disagreement
Information environment
Peer effects

Access to Document

10.1016/j.ememar.2025.101411

Cite this

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title = "Peer effects of corporate ESG practice: Incorporating the impact of ESG rating disagreement",

abstract = "This study investigates peer effects in ESG practice by analyzing Chinese listed companies from 2009 to 2022. After incorporating the impact of ESG rating disagreement, we document the significant existence of peer effects of ESG practice. Mechanism analysis shows these effects are amplified by high information uncertainty and information transmission efficiency. Heterogeneity tests reveal stronger peer effects in non-state-owned, follower, and non-heavy-polluting firms. Additionally, we find peer effects of ESG practice is strongest for social activities and exhibit regional spillovers. Furthermore, this imitation is selective, as firms replicate positive ESG practice rather than controversies.",

keywords = "ESG practice, ESG rating disagreement, Information environment, Peer effects",

author = "Shaolin WANG and Jianli WANG and Minghua DONG and Jingyuan LI",

note = "Publisher Copyright: Copyright {\textcopyright} 2025. Published by Elsevier B.V.",

year = "2025",

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day = "25",

doi = "10.1016/j.ememar.2025.101411",

language = "English",

volume = "71",

journal = "Emerging Markets Review",

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AU - WANG, Shaolin

AU - WANG, Jianli

AU - DONG, Minghua

AU - LI, Jingyuan

PY - 2025/11/25

Y1 - 2025/11/25

N2 - This study investigates peer effects in ESG practice by analyzing Chinese listed companies from 2009 to 2022. After incorporating the impact of ESG rating disagreement, we document the significant existence of peer effects of ESG practice. Mechanism analysis shows these effects are amplified by high information uncertainty and information transmission efficiency. Heterogeneity tests reveal stronger peer effects in non-state-owned, follower, and non-heavy-polluting firms. Additionally, we find peer effects of ESG practice is strongest for social activities and exhibit regional spillovers. Furthermore, this imitation is selective, as firms replicate positive ESG practice rather than controversies.

AB - This study investigates peer effects in ESG practice by analyzing Chinese listed companies from 2009 to 2022. After incorporating the impact of ESG rating disagreement, we document the significant existence of peer effects of ESG practice. Mechanism analysis shows these effects are amplified by high information uncertainty and information transmission efficiency. Heterogeneity tests reveal stronger peer effects in non-state-owned, follower, and non-heavy-polluting firms. Additionally, we find peer effects of ESG practice is strongest for social activities and exhibit regional spillovers. Furthermore, this imitation is selective, as firms replicate positive ESG practice rather than controversies.

KW - ESG practice

KW - ESG rating disagreement

KW - Information environment

KW - Peer effects

UR - https://www.scopus.com/pages/publications/105024326924

U2 - 10.1016/j.ememar.2025.101411

DO - 10.1016/j.ememar.2025.101411

M3 - Journal Article (refereed)

SN - 1566-0141

VL - 71

JO - Emerging Markets Review

JF - Emerging Markets Review

M1 - 101411

ER -

Peer effects of corporate ESG practice: Incorporating the impact of ESG rating disagreement

Abstract

Bibliographical note

Funding

Keywords

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Biological Basis for Risk Vulnerability and Ambiguity Aversion: Insights from Neuroscience

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Peer effects of corporate ESG practice: Incorporating the impact of ESG rating disagreement

Abstract

Bibliographical note

Funding

Keywords

Access to Document

Other files and links

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Biological Basis for Risk Vulnerability and Ambiguity Aversion: Insights from Neuroscience

Cite this