RT Article
T1 Cost of Vagueness: Stakeholders' Responses to Firms' ESG Information
JF Journal of business ethics
VO 202
IS 3
SP 543
OP 566
A1 He, Hongbo
A1 Chen, Yiqing
A1 Guo, Ruiqi
A1 He, Lerong
A1 Wan, Hong
A2 Chen, Yiqing
A2 Guo, Ruiqi
A2 He, Lerong
A2 Wan, Hong
LA English
YR 2025
UL https://ixtheo.de/Record/1944996621
AB This paper examines the reactions of stakeholders to firms' ESG information and how these reactions impact firms’ financial performance. We further explore how firms' ESG performance and public attention moderate these relationships. Using a longitudinal dataset of Chinese listed firms from 2014 to 2023, we find that firms with vague ESG information are associated with increased financing constraints, diminished brand value, and reduced government environmental subsidies. Interestingly, these negative consequences are milder in firms with unusually poor ESG performance. Our findings also reveal that stakeholders' adverse responses deteriorate these firms' future performance. Moreover, public attention as an information intermediary is a double-edged sword: heightened public scrutiny alleviates stakeholders' negative reactions to vague ESG information but intensifies them when a firm's ESG performance is extremely poor. These results remain robust across alternative measures, models, and sample selection treatments. Overall, our study demonstrates that vague ESG information elicits adverse responses from stakeholders and weakens firm performance. These effects, however, are contingent upon a firm's ESG performance and the level of public attention it receives.
K1 D21
K1 ESG information
K1 ESG performance
K1 Financial Performance
K1 M14
K1 M41
K1 Public attention
K1 Stakeholders' responses
DO 10.1007/s10551-025-06001-0