Zefu Wu

This study examines the impact of green innovation investment on ESG rating divergence and the mediating role of product market competition, based on 11,768 firm-year observations of Chinese A-share listed manufacturing enterprises from 2011 to 2023. We measure green innovation by lagged green patent applications (distinguishing invention and utility model patents), ESG rating divergence by the standard deviation and range of scores from six mainstream international and domestic agencies, and product market competition using the Herfindahl–Hirschman Index. Using mediating effect models with multi-dimensional fixed effects and heterogeneity analysis, we find that green innovation significantly widens ESG rating divergence, with green invention innovation exerting a stronger impact. Product market competition plays a partial mediating role, as green innovation intensifies industry competition and further amplifies rating divergence. Heterogeneity analysis shows no significant effect for heavily polluting firms, while green invention innovation of high-attention firms is more likely to cause rating disputes. This study reveals the reverse spillover effect of green innovation on ESG evaluation, providing new perspectives for understanding rating divergence and references for corporate green strategies and rating system optimization.

Despite the growing importance of corporate environmental strategies (CES), limited attention has been paid to the dynamic interplay between emphasis differentiation—prioritizing unique environmental initiatives—and scope conformity—aligning with industry norms—and how the market evaluates this interplay within the CES context. Drawing on the literature on optimal distinctiveness and social role theory, this study examines how the market responds to firms’ CES emphasis differentiation and scope conformity, considering their prior strategic positioning and CEO gender. Specifically, we hypothesize that firms maintaining consistency in their CES practices (e.g., continuing to emphasize differentiation or conformity) are rewarded by the market, whereas strategic shifts (e.g., transitioning from emphasis differentiation to scope conformity, or vice versa) are penalized due to perceived uncertainty. Furthermore, firms led by female CEOs face heightened skepticism for both consistent and shifting strategies, reflecting gender biases in market evaluations. Using a dataset of Chinese publicly listed firms, our empirical findings support these hypotheses. This study contributes to the literature by emphasizing the critical role of consistency in CES practices for favorable market outcomes and revealing how gendered perceptions influence the evaluation of corporate environmental practices.