ESG、Financing Constraints And The Risk Of Stock Price Collapse

The concept of ESG is gaining global recognition and ESG practices are constantly expanding.At the same time,a new wave of ESG development in China has begun.Numerous price declines in the capital market not only caused financial losses for investors,but also increased systemic risks in the financial market,and even caused resource imbalances,jeopardizing the development of the real economy.Currently,ESG risks and stock price crashes are in the limelight both in academia and in practice.In the existing literature,there are many separate studies on ESG and stock price collapse risk,but few researchers have studied the impact of ESG on stock price collapse risk.The degree of funding constraints tends to affect the amount of negative reporting,and the role of funding constraints in the relationship between ESG and firm stock price collapse risk deserves further investigation.Therefore,this thesis applies an empirical research method that focuses on the impact of corporate ESG on stock price risk,which is of high theoretical and practical importance given the moderating role of funding constraints.This thesis empirically investigates the impact of corporate ESG on stock price collapse risk and the moderating role of financial constraints on corporate ESG and stock price collapse risk,using relevant data on Chinese listed companies from 2011 to 2021 as the research sample.The results of the study are: a systematic GMM method based on ESG theory,subject-agent theory,reputation theory,and information asymmetry theory,and a propensity score matching(PSM)method with different time periods.This means that the probability of negative disclosure is very low when the ESG performance of a listed company improves;that better ESG performance gives a company a good reputation and reduces the probability of a stock price decline due to the aggregation of negative information hidden by management;that open and transparent ESG disclosure reduces.This is because it prevents price deviation from intrinsic value due to information asymmetry,which increases the risk of share price declines.The mechanism analysis and heterogeneity analysis further revealed that: corporate ESG mitigates share price crash risk by reducing surplus management;and the positive effect of ESG on reducing share price crash risk is more pronounced for companies with high gearing and high earnings ratios,and the negative moderating effect of financing constraints is also more pronounced.Companies should actively adopt ESG concepts,disclose relevant ESG data and information consistently,actively improve ESG performance,and promote quality improvement;rating agencies should optimize their rating methodologies and align them with international standards to account for regional preferences and improve local ESG rating systems;governments should strengthen ESG policies,improve ESG infrastructure.The government should strengthen ESG guidance,improve ESG infrastructure,actively promote ESG management,and promote sustainable development.