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Trade war and corporate social responsibility: Evidence from China

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  • Zhang, Ke
  • Wang, Jenny Jing
  • Zhang, Xujun

Abstract

Based on the shock of the US–China trade war, this study investigates the effect of trade tariff shock on corporate social responsibility (CSR). We find that Firms increase CSR activities in response to the trade war and results are robust when using alternative control groups and excluding firms that experienced changes in their main business. We further examine the economic consequences of CSR and find that CSR during the trade war leads to an increase in sales and a decrease in stock price crash risk. Overall, this paper offers timely policy implications on the role of CSR in global trade events.

Suggested Citation

  • Zhang, Ke & Wang, Jenny Jing & Zhang, Xujun, 2023. "Trade war and corporate social responsibility: Evidence from China," Finance Research Letters, Elsevier, vol. 55(PA).
    • Handle: RePEc:eee:finlet:v:55:y:2023:i:pa:s1544612323001964
    DOI: 10.1016/j.frl.2023.103823
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    Cited by:

    1. Zhou, Taiyun & Liu, Mingxuan & Zhang, Xiyu & Qi, Zheng & Qin, Ni, 2024. "Does institutional ownership affect corporate social responsibility? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 84-98.
    2. Pan, Liang & Lei, Lili, 2023. "International trade friction and firm cash holdings," Finance Research Letters, Elsevier, vol. 55(PB).
    3. Kong, Dongmin & Ji, Mianmian, 2024. "Individual investors’ dividend tax reform and investment efficiency," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 1102-1119.
    4. Liu, Dayong & Gu, Kaiyuan & Hu, Wenhua, 2023. "ESG performance and stock idiosyncratic volatility," Finance Research Letters, Elsevier, vol. 58(PB).
    5. Huang, Ruilei & Wei, Jiuchang, 2023. "Does CEOs’ green experience affect environmental corporate social responsibility? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 205-231.
    6. Liu, Bingyang & Xiong, Liyang & Wang, Minghui & Sun, Yanqi, 2024. "Does being included in an entity list enhance regulated firms’ mergers and acquisitions? Evidence from Chinese high-tech firms," Finance Research Letters, Elsevier, vol. 62(PB).

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