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CSR decoupling and stock price crash risk: Evidence from China

Author

Listed:
  • Peng Wan

    (Zhejiang Gongshang University)

  • Mengjiao Xu

    (Zhejiang Gongshang University)

  • Yu Yang

    (Zhejiang Gongshang University)

  • Xiangyu Chen

    (Zhejiang University of Finance and Economics)

Abstract

This paper examines the efficacy of corporate social responsibility (CSR) decoupling on stock price crash risk (SPCR). Selecting Chinese listed companies over the 2010–2019 period as a sample, we find that CSR decoupling exacerbates SPCR, and this relationship still holds after a battery of endogeneity and robustness tests. Further analysis reveals that within companies characterized by higher agency risks, CSR decoupling exacerbates SPCR more significantly, suggesting the role of information asymmetry as a crucial mechanism through which CSR decoupling influences SPCR. Our results show CSR decoupling’s harm on the capital market and help clarify mixed evidence in existing studies.

Suggested Citation

  • Peng Wan & Mengjiao Xu & Yu Yang & Xiangyu Chen, 2024. "CSR decoupling and stock price crash risk: Evidence from China," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-12, December.
    • Handle: RePEc:pal:palcom:v:11:y:2024:i:1:d:10.1057_s41599-024-03521-4
    DOI: 10.1057/s41599-024-03521-4
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