ESG Information Disclosure, Stock Price Informativeness and Corporate Digital Transformation

This study investigates the effect of ESG information disclosure on stock price informativeness from the perspective of return and volatility in the Chinese stock market. We use Chinese A-share listed companies from 2011 to 2020 as samples and find that ESG information disclosure significantly improves stock price informativeness, companies with weaker ESG disclosure benefit more from improving ESG disclosures to improve their stock price informativeness and comprehensive ESG disclosure in particular shows a strong informative effect during the COVID-19 pandemic. Further research shows that corporate digital transformation reinforces this positive relationship. Stock price informativeness reacts more strongly to negative than positive ESG news. ESG disclosure and corporate digital transformation have the financial effect of improving firm value and the influence of ESG disclosure on stock price informativeness is higher for SOEs. Our findings enrich the research on the direct impact of ESG disclosure on stock price informativeness and provide a reference for the capital market to promote green transformation through ESG practices.