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ESG Controversies and Inventor Job-hopping
Juan (jane) Luo  1@  , Limin Xu  1@  , Xiaohang Yao  1@  
1 : The University of Adelaide

This paper examines the impact of corporate ESG controversies on inventor job-hopping. While companies often highlight positive environmental, social, and governance (ESG) achievements, the lack of standardized mandatory reporting requirements enables selective disclosure, leading to ESG controversies when unfavorable information is revealed. Our findings demonstrate that ESG controversies prompt corporate inventors to seek employment elsewhere. This effect is particularly pronounced when firms are headquartered in regions with high social trust and low unemployment, face significant political and litigation risks, and operate in high-tech sectors. Additionally, more experienced inventors show greater sensitivity to ESG controversies. Beyond the job-hopping effect, we find that ESG controversies reduce innovative productivity, and departing inventors tend to join companies with better ESG track records than their previous employers. Overall, our research reveals that ESG controversies harm firm performance by driving away skilled inventors and highlights the need for standardized mandatory ESG reporting requirements.


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