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Does corporate social responsibility matter for corporate stability? Evidence from China

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  • Yujing Gong

    (Zhongnan University of Economics and Law)

  • Kung-Cheng Ho

    (Zhongnan University of Economics and Law)

Abstract

The study examines the link between corporate social responsivity (CSR) and corporate stability, and how product market competition affects this relationship. Using the unique CSR scores to the Chinese firms over the period 2009–2015, we find firms with stronger CSR performance tend to be more stable. This result consistent with the argument that ethically forward-looking managers employ CSR as a powerful tool to manage risk. However, this above positive association between CSR and stability is significant only in highly competitive industries, suggesting that product market competition provides modest incentives for managers to invest in CSR activities for general stakeholders’ interests.

Suggested Citation

  • Yujing Gong & Kung-Cheng Ho, 2018. "Does corporate social responsibility matter for corporate stability? Evidence from China," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(5), pages 2291-2319, September.
    • Handle: RePEc:spr:qualqt:v:52:y:2018:i:5:d:10.1007_s11135-017-0665-6
    DOI: 10.1007/s11135-017-0665-6
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    Cited by:

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    2. Lv, Wendai & Ma, Wenhao & Yang, Xiandong, 2022. "Does social security policy matter for corporate social responsibility? Evidence from a quasi-natural experiment in China," Economic Modelling, Elsevier, vol. 116(C).
    3. Chien-Chi Chu & Kung-Cheng Ho & Chia-Chun Lo & Andreas Karathanasopoulos & I-Ming Jiang, 2019. "Information disclosure, transparency ranking system and firms’ value deviation: evidence from Taiwan," Review of Quantitative Finance and Accounting, Springer, vol. 53(3), pages 721-747, October.
    4. Popkova, Elena & DeLo, Piper & Sergi, Bruno S., 2021. "Corporate Social Responsibility Amid Social Distancing During the COVID-19 Crisis: BRICS vs. OECD Countries," Research in International Business and Finance, Elsevier, vol. 55(C).
    5. Bing Wang & Si Xu & Kung-Cheng Ho & I-Ming Jiang & Hung-Yi Huang, 2019. "Information Disclosure Ranking, Industry Production Market Competition, and Mispricing: An Empirical Analysis," Sustainability, MDPI, vol. 11(1), pages 1-16, January.
    6. Ma Zhong & Rong Xu & Xinyi Liao & Shuangli Zhang, 2019. "Do CSR Ratings Converge in China? A Comparison Between RKS and Hexun Scores," Sustainability, MDPI, vol. 11(14), pages 1-20, July.
    7. 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.
    8. Uyar, Ali & Wasiuzzaman, Shaista & Kuzey, Cemil & Karaman, Abdullah S., 2022. "Board structure and financial stability of financial firms: Do board policies and CEO duality matter?," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 47(C).
    9. Shoukat Ali & Ramiz ur Rehman & Wang Yuan & Muhammad Ishfaq Ahmad & Rizwan Ali, 2022. "Does foreign institutional ownership mediate the nexus between board diversity and the risk of financial distress? A case of an emerging economy of China," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 12(3), pages 553-581, September.
    10. José Manuel Santos-Jaén & Ana León-Gómez & José Serrano-Madrid, 2021. "The Effect of Corporate Social Responsibility on Earnings Management: Bibliometric Review," IJFS, MDPI, vol. 9(4), pages 1-21, December.

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    More about this item

    Keywords

    Corporate social responsibility; Stability; Product market competition;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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