The Impact of Esg-Ratings Disagreement on Corporate Cash Holdings

This paper examines the effect of ESG-ratings disagreement on corporate cash holdings under different levels of institutional investor ownership. We find that ESG-ratings disagreement is negatively associated with corporate cash holdings and that higher institutional investor ownership weakens this effect. Furthermore, consistent with the resource-based view (RBV), this negative effect is significant only for firms with low agency costs, while economic policy uncertainty and growth opportunities have no effect. Our research contributes to understanding the strategic value and economic consequences of the outcome uncertainty of ESG-ratings disagreement.