Citizen Engagement and Corporate ESG Practices

Last registered on March 03, 2025
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Pre-Trial

Trial Information

General Information

Title
Citizen Engagement and Corporate ESG Practices
RCT ID
AEARCTR-0015475
Initial registration date
March 01, 2025

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
March 03, 2025, 8:49 AM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
China
Region

Primary Investigator

Name
Qinrui Xiahou
Affiliation
The University of Hong Kong
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Guojun He
PI Affiliation
The University of Hong Kong
Contact Investigator

Additional Trial Information

Status
Completed
Start date
2023-10-01
End date
2024-06-30
Keywords
Environment & Energy, Finance & Microfinance, Firms & Productivity, Governance
Additional Keywords
Environmental, Social, and Governance (ESG), Corporate Social Responsibility (CSR), Shareholder Engagement, Information Asymmetry
JEL code(s)
C93, D82, G14, G34, M14
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
In a nationwide field experiment involving all Chinese listed companies, we created demand for ESG actions by randomly conveying ESG rating concerns to company management teams via public online platforms. We find that many companies actively addressed these concerns by supplying detailed ESG strategies and actions. High-productivity and low-transparency companies were more likely to respond to such demand for actions. Moreover, companies that received ESG concerns improved their ESG performances over time and published more ESG reports after the experiment. In the long run, stock price responded positively to E and S inquiries while negatively to G inquiries. This divergence can be attributed to investors interpreting E and S inquiries as positive signals and G inquiries as negative signals, demonstrated through their platform interactions. Overall, the results show that companies’ ESG actions are mainly value-driven, rather than values-driven. Corporate ESG actions can be rationalized by a simple signaling model, where companies utilize costly ESG actions (similar to advertisements) to signal their quality under information asymmetry.
External Link(s)

Registration Citation

Citation
He, Guojun and Qinrui Xiahou. 2025. "Citizen Engagement and Corporate ESG Practices." AEA RCT Registry. March 03. https://doi.org/10.1257/rct.15475-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
We conduct a nationwide field experiment involving all listed firms in China. Specifically, we raise ESG-related concerns to randomly selected listed firms through two online platforms that allow retail investors to communicate directly with corporate management teams. We then follow the full impact-generating process and investigate whether and how demand translates into supply and equilibrium responses.
Intervention (Hidden)
Intervention Start Date
2023-12-04
Intervention End Date
2024-04-01

Primary Outcomes

Primary Outcomes (end points)
Firms’ online responses, offline actions, spillover effects, and ultimate market impacts
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We use block (stratified) randomization based on the market value to create four treatment arms: T1, where firms receive information only about their overall ESG ratings from multiple sources; and T2-T4, where firms receive ESG ratings along with specific concerns about their environmental, social, or governance performance, respectively. All messages are intentionally crafted with a negative tone to motivate further efforts. To enhance credibility and relevance, we include comparative advantages within the industry and recent ESG-related media coverage in all messages.

In addition to the main treatment arms, we establish two crosscut arms to examine the effect of investors’ preferences toward ESG on firm behavior. In C1A, we only engage with firm management teams on the Q&A platforms. In C1B, we further share our interactions with firms on two investor forums (Guba and Xueqiu) and social media (Weibo). For the forwarded messages, we maintain a neutral tone to evoke authentic investor reactions without biasing their sentiments. We then analyze the sentiments of investors’ comments on our posts and examine whether these sentiments influence firms’ responses on Q&A platforms and affect market valuation accordingly.
Experimental Design Details
Randomization Method
Block (stratified) randomization based on the market value
Randomization Unit
Firm
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
N/A
Sample size: planned number of observations
4,852 non-financial A-share companies
Sample size (or number of clusters) by treatment arms
1,900 control, 744 ESG messages, 736 E messages, 736 S messages, 736 G messages
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Human Research Ethics Committee, The University of Hong Kong
IRB Approval Date
2024-04-10
IRB Approval Number
EA240235
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
April 01, 2024, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
June 30, 2024, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
Was attrition correlated with treatment status?
Final Sample Size: Total Number of Observations
Final Sample Size (or Number of Clusters) by Treatment Arms
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials