Author(s)

Yong Liao ¹

Affiliation(s)

¹ School of Accounting, GuizhouUniversity of Finance and Economics, Guiyang, 550025, China

Corresponding Author

Yong Liao

ABSTRACT

Against the backdrop of the "dual carbon" strategy and the deepening integration of ESG investment, ESG rating divergence has become a notable phenomenon in capital markets. Using a sample of Chinese A-share listed companies from 2015 to 2024, this paper constructs a U-shaped moderation model to examine how ESG rating divergence nonlinearly moderates the relationship between ESG performance and accounting conservatism. The findings reveal that ESG performance significantly enhances accounting conservatism, supporting the "governance effect" hypothesis. More importantly, ESG rating divergence exhibits a significant U-shaped moderating effect on this relationship, with the inflection point located at a divergence value of 1.96, and approximately 75% of the sample falling within the low-divergence interval. The underlying mechanism is that in the low-divergence interval, the "information noise effect" dominates, weakening ESG's governance effectiveness; in the high-divergence interval, the "forced governance effect" dominates, strengthening ESG's governance role. Heterogeneity analysis shows that this U-shaped effect is more pronounced in non-state-owned enterprises. This study reveals the "double-edged sword" attribute of ESG rating divergence and its nonlinear governance logic, providing theoretical and empirical evidence for investors to rationally understand rating divergence and for regulators to improve the rating system.

KEYWORDS

ESG Rating Divergence; Accounting Conservatism; U-shaped Moderation; Information Noise; Forced Governance

CITE THIS PAPER

Yong Liao. The Nonlinear Governance Effect of ESG Rating Divergence: Evidence from Accounting Conservatism. Accounting and Corporate Management (2026). Vol. 8, No. 1, 158-165. DOI: http://dx.doi.org/10.23977/acccm.2026.080120.

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