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The influence of firm size on environmental, social and governance (ESG) ratings is examined controlling for ratings agency and industrial sector. While a uniform positive relationship is found between firm size and ESG over ratings agencies, its strength varies by agency, calling into question the explanation of organizational legitimacy. Controlling for industrial sector and ratings agency, it is found that for many combinations that there is no significant relationship between firm size and ESG rating. Further, comparison of OLS and Quantile regression estimates shows that the effect of size on ESG ratings is driven in part by outliers.
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Richard Paul Gregory (2022) studied this question.
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