“…Theoretical arguments provide mixed evidence on IPO issuers' ESG activities. From the stakeholder theory perspective (Russo & Perrini, 2010), voluntarily disclosing ESG activities satisfies stakeholders' ‘right‐to‐know’ towards the social licence of a firm's operation by becoming the stakeholders' communication tool (Harasheh, 2022), reduces information asymmetry (Reber et al, 2022; Siew et al, 2016; Singhania & Saini, 2021), garners attention from investors (Barber & Odean, 2008), boosts the IPO trading volumes (Berry & Howe, 1994), and reduces the idiosyncratic volatility and downside tail risks (Jiao et al, 2017; Lowry et al, 2010; Reber et al, 2022). Consequently, IPOs can continuously increase firm value (Fatemi et al, 2015; Giese et al, 2019), enhance operating and financial performance (Borghesi et al, 2014; Gao & Zhang, 2015; Gillan et al, 2010), generate positive stock returns (Cornett et al, 2016; Edmans, 2011), and reduce the negative link between managerial entrenchment and firm value (Ferrell et al, 2016).…”