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How Do Corporate Social Responsibility and Corporate Governance Affect Stock Price Crash Risk?

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  • Ahmed Imran Hunjra

    (University Institute of Management Sciences, PMAS-Arid Agriculture University Rawalpindi, Rawalpindi 46000, Pakistan)

  • Rashid Mehmood

    (University Institute of Management Sciences, PMAS-Arid Agriculture University Rawalpindi, Rawalpindi 46000, Pakistan)

  • Tahar Tayachi

    (Finance Department, Effat University, Jedda 21478, Saudi Arabia)

Abstract

We investigate the impact of corporate social responsibility (CSR) and corporate governance on stock price crash risk in manufacturing sector of India and Pakistan. We collect data of nine years from 2010 to 2018 from DataStream of 353 manufacturing firms. We apply the Generalized Method of Moments (GMM) to the analysis of the data. We find that when firms actively engage in CSR activities, they lead to reduced stock price crash risk. We further find that managerial ownership has a significant positive impact on stock price crash risk, while board size and CEO duality show a significant and negative impact on stock price crash risk.

Suggested Citation

  • Ahmed Imran Hunjra & Rashid Mehmood & Tahar Tayachi, 2020. "How Do Corporate Social Responsibility and Corporate Governance Affect Stock Price Crash Risk?," JRFM, MDPI, vol. 13(2), pages 1-15, February.
    • Handle: RePEc:gam:jjrfmx:v:13:y:2020:i:2:p:30-:d:317638
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