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Which CSR activities are more consequential? Evidence from the Great Recession

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  • Sakunasingha, Benjalux
  • Jiraporn, Pornsit
  • Uyar, Ali

Abstract

We exploit the Great Recession of 2008 to study how firms view corporate social responsibility (CSR). When confronted with an adverse exogenous shock, firms are forced to prioritize. Our results show that, during the Great Recession, firms do not lessen their overall CSR investments, suggesting that they recognize the importance of CSR. However, further analysis shows that firms substantially reduce investments in five CSR activities (Community, Employee, Environment, Human Rights, and Product), while increasing investments in two CSR activities (Corporate Governance and Diversity). Firms appear to view some CSR activities as more essential to the strategic direction of the firm than others. Firms appear to view some CSR activities as more essential to the strategic direction of the firm than others.

Suggested Citation

  • Sakunasingha, Benjalux & Jiraporn, Pornsit & Uyar, Ali, 2018. "Which CSR activities are more consequential? Evidence from the Great Recession," Finance Research Letters, Elsevier, vol. 27(C), pages 161-168.
    • Handle: RePEc:eee:finlet:v:27:y:2018:i:c:p:161-168
    DOI: 10.1016/j.frl.2018.02.003
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    Cited by:

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    2. Chuluunbat Tsendsuren & Prayag Lal Yadav & Sangsoo Kim & Seunghun Han, 2021. "The Effects of Managerial Competency and Local Religiosity on Corporate Environmental Responsibility," Sustainability, MDPI, vol. 13(11), pages 1-14, May.
    3. Uyar, Ali & Lodh, Suman & Nandy, Monomita & Kuzey, Cemil & Karaman, Abdullah S., 2023. "Tradeoff between corporate investment and CSR: The moderating effect of financial slack, workforce slack, and board gender diversity," International Review of Financial Analysis, Elsevier, vol. 87(C).
    4. Agnieszka Karman & Viktor Prokop & Carlo Giglio & Fazal Ur Rehman, 2024. "Has the Covid‐19 pandemic jeopardized firms' environmental behavior? Bridging green initiatives and firm value through the triple bottom line approach," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(1), pages 375-395, January.
    5. Ali Uyar & Simone Pizzi & Fabio Caputo & Cemil Kuzey & Abdullah S. Karaman, 2022. "Do shareholders reward or punish risky firms due to CSR reporting and assurance?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(5), pages 1596-1620, July.
    6. Chuluunbat Tsendsuren & Prayag L. Yadav & Seung Hun Han & Seongjae Mun, 2021. "The effect of corporate environmental responsibility and religiosity on corporate cash holding decisions and profitability: Evidence from the United States' policies for sustainable development," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(5), pages 987-1000, September.
    7. Forgione, Antonio Fabio & Migliardo, Carlo, 2020. "CSR engagement and market structure: Evidence from listed banks," Finance Research Letters, Elsevier, vol. 35(C).
    8. Nerantzidis, Michail & Tzeremes, Panayiotis & Koutoupis, Andreas & Pourgias, Apostolos, 2022. "Exploring the black box: Board gender diversity and corporate social performance," Finance Research Letters, Elsevier, vol. 48(C).
    9. Chatjuthamard, Pattanaporn & Ongsakul, Viput & Jiraporn, Pornsit, 2022. "Corporate complexity, managerial myopia, and hostile takeover exposure: Evidence from textual analysis," Journal of Behavioral and Experimental Finance, Elsevier, vol. 33(C).
    10. Dumitrescu, Ariadna & El Hefnawy, Menatalla & Zakriya, Mohammed, 2020. "Golden geese or black sheep: Are stakeholders the saviors or saboteurs of financial distress?," Finance Research Letters, Elsevier, vol. 37(C).
    11. Zafeiria Masouti & George Tsiotras & Katerina Gotzamani, 2024. "The Significance of CSR in the Pursuit of Business Excellence and Competitiveness: Evidence from the Greek Supermarket Industry," Sustainability, MDPI, vol. 16(10), pages 1-25, May.
    12. Leong, Chee Kian & Yang, Yung Chiang, 2021. "Constraints on “Doing Good”: Financial constraints and corporate social responsibility," Finance Research Letters, Elsevier, vol. 40(C).
    13. Seles, Bruno Michel Roman Pais & Lopes de Sousa Jabbour, Ana Beatriz & Jabbour, Charbel Jose Chiappetta & Latan, Hengky & Roubaud, David, 2019. "Do Environmental Practices Improve Business Performance Even in an Economic Crisis? Extending the Win-Win Perspective," Ecological Economics, Elsevier, vol. 163(C), pages 189-204.

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    More about this item

    Keywords

    Corporate social responsibility; Financial crisis; Great Recession; Sustainability; CSR;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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