The Nexus of Managerial Myopia and Transparency in ESG Information: Evidence From the Textual Analysis of ESG Disclosures

This study investigates the relationship between managerial myopia and ESG (environmental, social, and governance) disclosures, focusing on how CEOs with a short-term orientation influence corporate ESG transparency practices. Using a unique dataset of Chinese listed firms from 2009 to 2021, we apply machine learning-based textual analysis to measure managerial myopia from annual report narratives. Empirical results show that myopic CEOs are significantly less likely to disclose ESG information, even when such disclosures could yield immediate governance or signaling benefits. However, responses to external scrutiny vary: under government oversight, myopic managers tend to disclose strategically and cautiously, limiting transparency; under analyst scrutiny, by contrast, they exhibit a greater level of ESG disclosures, suggesting market forces play a more effective role in mitigating short-term bias. These findings highlight the importance of institutional context in shaping the impact of CEO time orientation on ESG disclosure. The study contributes to the literature on behavioral corporate governance and offers practical insights for regulators, boards, and investors in emerging markets like China.