The Impact of ESG Social Aspects Disclosure on the Stock Prices of Chinese Companies

The purpose of this study is to assess the impact of social disclosure in non-financial corporate reporting on company stock prices in the periods before and after the coronavirus pandemic.

The study methodology includes panel regression, text analysis, and quantitative analysis of social content indicators in companies’ annual reports. Machine learning and LDA were used to generate key word «topics». These were selected based on research into Russian investor characteristics and mentality: these were the primary factors investors pay attention to when examining a company’s social policy.  Results: The study revealed that social factors assumed a more significant role in shaping investment attractiveness in 2021–2022. Assessing indicators for two periods, referred to as «pre-COVID» and «post-COVID», demonstrated an increase in the number of significant social factors influencing company stock prices. Thus, in 2018–2019, we identified only three significant indicators, but in 2020–2021, we identified nine significant social variables, thereby confirming Hypothesis 3. Social policy indicators were found to have both a direct relationship (working conditions, average number of hours of training) and an inverse relationship (average salary, injury rate, social investment).

Conclusions: the theoretical contribution of signaling theory is confirmed, as it is signals related to social policy that influence investors and their decisions.

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