Which Corporate ESG News Does the Market React To?

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Abstract

We analyze 109,014 firm–day observations for 3,109 companies and examine market reaction to different ESG news. We find that prices react only to financially material ESG news, and the reaction is larger for news that is positive, receive more news coverage, and related to social capital issues. Using a prediction model based on pre-existing ESG ratings, we separate news into expected and unexpected components and find the market reacts to unexpected news. We conclude that investors are motivated by financial rather than nonpecuniary motive as they differentiate in their reactions based on whether the news is likely to affect fundamentals.

Source: resolved

Document Metadata

Issuer: Elsevier BV
Document Type: Research / Academic Paper
Publication Year: 2022
Retrieved: 5 May 2026
Source: Contact XFID for Access
Record ID: XFDUWQYXNI
Validation: Inferred by XFID

Topics

Asset PricingEsgNon Financial Disclosure

Cited by (1)

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Academic / report citation

Elsevier BV (2022). Which Corporate ESG News Does the Market React To?. XFID: XF-DUWQYXN-I. Retrieved from https://xframework.id/XFDUWQYXNI

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XF-DUWQYXN-I