Compulsory disclosure regulation: the effect of ESG on extreme risk

Chien Chiang Lee, Chih Wei Wang, Wen Ling Chen, Pei Chin Hong

Research output: Contribution to journalArticlepeer-review

1 Scopus citations


We examined the impact of compulsory disclosure regulations on the relationship between the Environmental, Social and Governance (ESG) and firm-specific extreme risk. We used a difference-in-difference approach to solve endogenous concerns and found that the negative impact of the ESG score on extreme risk is more significant after announcing compulsory disclosure regulations. Additionally, we demonstrated that this effect becomes more substantial when firms issue green bonds. Finally, the subsample tests showed that the compulsory influence of the government is more evident in firms with high financial transparency and firms with low crash risk. Our empirical findings had policy implications for governments, regulators, and investors.

Original languageEnglish
JournalApplied Economics
StateAccepted/In press - 2023


  • Compulsory disclosure regulation
  • Crash risk
  • ESG
  • Green bonds


Dive into the research topics of 'Compulsory disclosure regulation: the effect of ESG on extreme risk'. Together they form a unique fingerprint.

Cite this