Can ESG activities stabilise IPO prices? Evidence from the Hong Kong stock market

This study explores the relationship between economic, social, and governance (ESG) activities and initial public offering (IPO) price stabilisation actions using IPOs listed on the Hong Kong stock exchange between 2004 and 2021 as samples. We find that IPO issuers that actively conduct ESG activiti...

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Bibliographic Details
Published in:European financial management : the journal of the European Financial Management Association 2024-06, Vol.30 (3), p.1460-1509
Main Authors: Wang, Yaopeng, Xu, Morong
Format: Article
Language:English
Subjects:
ESG activities
ex‐ante volatility
Governance
Policy making
price stabilisation
Price stabilization
Prices
Securities markets
Stock exchanges
Volatility
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Summary:This study explores the relationship between economic, social, and governance (ESG) activities and initial public offering (IPO) price stabilisation actions using IPOs listed on the Hong Kong stock exchange between 2004 and 2021 as samples. We find that IPO issuers that actively conduct ESG activities have higher ESG scores, which enhances price stabilisation. Furthermore, ex‐ante volatility serves as a potential channel through which ESG activities affect price stabilisation. Providing ethical and economic implications for companies, policymakers, and investors, our findings suggest that ESG activities are vital drivers of price stabilisation.
ISSN:1354-7798
1468-036X
DOI:10.1111/eufm.12452