Publication Type

PhD Dissertation

Version

publishedVersion

Publication Date

4-2026

Abstract

This study investigates the valuation effects of China's 2024 transition from voluntary to mandatory ESG disclosure across the Shanghai, Shenzhen, and Beijing stock exchanges. Using a two-stage event study surrounding the policy's draft and final confirmation, this research examines how investors price a regulatory reform affecting over 51% of A-share market capitalization. Anchored in Information Asymmetry Theory, the study evaluates whether the mandate acts as an information-enhancing mechanism or a compliance cost shock. The results indicate that mandated firms experience significant negative cumulative abnormal returns, suggesting investors primarily interpret the policy as a compliance-driven cost shock — consistent with the net-cost dominance in China's top-down regulatory environment. Cross-sectional analyses reveal this market reaction varies systematically across firms. Under the Resource-Based View, strong internal capacity (state ownership, financial slack) attenuates negative reactions, whereas larger firms face pronounced penalties due to operational complexity. Under Stakeholder Pressure Theory, a dual-channel moderation emerges. Institutional Preparedness (SASAC oversight, Big 4 auditors) buffers the compliance shock. Conversely, intense Market Scrutiny (ESG ratings, foreign ownership, international analysts) amplifies the negative reaction. This study provides the first two-event evidence on China's mandatory ESG reform, contributing novel insights into how internal resources and external iv stakeholder pressures jointly shape the net cost of nonfinancial disclosure in policy-driven emerging markets.

Keywords

Mandatory ESG disclosure, Event study methodology, Information Asymmetry Theory, Resource-Based View, Stakeholder Pressure Theory, Institutional Preparedness, Market Scrutiny, Compliance costs, Chinese A-share market, Regulatory shock

Degree Awarded

Doctor of Business Admin

Discipline

Accounting

Supervisor(s)

LIANG, Hao

First Page

1

Last Page

123

Publisher

Singapore Management University

City or Country

Singapore

Copyright Owner and License

Author

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Accounting Commons

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