How does ESG rating uncertainty affect stock price crash risk? Evidence from China

Key Points

• Stock price crash risk increases with greater ESG rating uncertainty in China, highlighting potential vulnerabilities.
• A 15% increase in ESG uncertainty correlates with a notable rise in stock price volatility.
• Observational analysis within Chinese financial markets shows a clear relationship between ESG ratings and crash risk.
• Results indicate that understanding ESG uncertainties may guide investment strategies, although it requires further validation.