Seeing is Believing:ESG Rating Divergence and Institutional Investors'Site Visits
The substantial divergence among ESG(Environmental,Social,and Governance)rating agencies has hindered the comprehensive and objective evaluation of enterprises by institutional investors,leading to operational risks and inefficiencies.This divergence has driven institutional investors to increasingly rely on site visits for informa-tion mining and supplementation,ultimately enhancing the information efficiency of the capital market.This study uses A-share listed companies on the Shenzhen Stock Exchange from 2013 to 2022 as a sample and employs ESG rat-ings from Huazheng,Syntao Green Finance,Wind,RANKINS,and CNRDS to measure rating divergence.Through empirical analysis,the paper explores the effect and mechanisms of ESG rating divergence on institutional investors'site visits.The findings indicate that higher ESG rating divergence significantly increases the frequency of institutional investors'site visits,particularly in contexts with high information asymmetry,low regional marketization,and smaller enterprises.Mechanism analysis reveals that the quality and compliance of corporate information disclosure can weaken the relationship between ESG rating divergence and site visits.Further analysis shows that only the envi-ronmental(E)dimension of ESG rating divergence positively influences institutional investors'site visits.Addition-ally,these visits can mitigate the negative impact of ESG rating divergence on capital market information efficiency.The study offers valuable insights for improving ESG system construction and enhancing market information effi-ciency.
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