This paper examines how increased competition among environmental, social, and governance (ESG) rating agencies relates to ESG rating quality. We exploit the entry of Sustainalytics as a new ESG rating agency in 2010. We conduct a difference‐in‐differences analysis and provide three main findings. First, we find that higher competition decreases incumbents' ESG rating disagreements of the same scope. The negative relation between competition and ESG rating disagreement persists for same‐scope rating metrics not covered by Sustainalytics, suggesting that neither learning nor herding drive the results. The relationship between competition and rating disagreement strengthens for firms with more ESG disclosures, which generally require more effort to analyze. Second, we find that incumbents' ratings of ESG concerns are more strongly associated with future negative ESG news for firms additionally covered by Sustainalytics. This finding is consistent with competition improving ratings' ability to predict future negative ESG incidents. Third, we find that incumbents evaluate more difficult‐to‐measure outcome metrics for firms covered by Sustainalytics, consistent with competition inducing more effort. Overall, our findings suggest that competition serves as an implicit disciplining mechanism of ESG rating agencies' quality.

This study examines the long-term impact of social disaster experiences on household finance. Using the Cultural Revolution in China, the country’s most pronounced sociopolitical turmoil that completely disrupted millions of people’s lives, we show that households are more likely to participate in the stock market if their eldest member was more exposed to the turmoil. The results remain robust to alternative historical events, socioeconomic factors, and household characteristics. Survey results suggest that the more exposed individuals invest in the stock market because they perceive stocks as low risk rather than have altered risk preferences or trust in stock markets.

Upward influencers, employees who are more favorably perceived by their supervisors than their peers and subordinates, are predicted by economic and accounting theories and are found to be ubiquitous in many organizations. Despite their prevalence, the role of upward influencers in teams remains underexplored. This paper fills this void by using proprietary data from a service‐providing organization that allows for the identification of upward influencers based on its 360‐degree person evaluation. We find an inverted U‐shaped relationship between the fraction of upward influencers in a team and team performance. In cross‐sectional analyses, we show that this relationship is driven by conditions when the need for collaboration and information sharing is high and when managers are less experienced. Additional tests exploring the mechanisms for the role of upward influencers in teams suggest that they impair team horizontal relationships through lowering the willingness to communicate, share knowledge, and offer mutual assistance among team members. Yet, teams with upward influencers build better vertical relationships with supervisors, which, in return, is associated with supervisors allocating more of their time to provide team members with feedback and guidance. Taken together, this study contributes to the understanding of upward influencers in teams.