Note(s): This table presents the regression results of the mechanism of ESG rating divergence and information flow. Column (1) shows the results of the regression with Eq. (4), and column (2) shows the results of the regression with Eq. (5). The dependent variable in column (1) and the independent variable in column (2) is Insti, which represents the absolute change in the number of a firm’s shares held by institutional investors as a fraction of the stock’s trading volume in year t. The dependent variable in column (2) is Syn. The control variables are the same as in our baseline model. See Appendix A for variable definitions. All continuous variables are winsorized at the 1% and 99% levels. Standard errors, clustered at the firm level, are reported in parentheses. ***, ** and * indicate significance at the 1%, 5% and 10% levels, respectively