IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v57y2023ics1544612323005871.html
   My bibliography  Save this article

Corporate social responsibility, stakeholders’ governance and idiosyncratic risk

Author

Listed:
  • Wang, Tianyu
  • Yang, Bo

Abstract

This paper examines the relationship between corporate social responsibility (CSR) and idiosyncratic risk and tests the impact of stakeholder governance on the relationship between CSR and idiosyncratic risk. Selecting all A-share listed companies in Shanghai and Shenzhen from 2017 to 2021 as the research subjects. It is found that: CSR can effectively reduce the level of idiosyncratic risk; the governance of investors, creditors, employees, and consumers strengthens the inhibiting effect of CSR on idiosyncratic risk, and the governance of suppliers weakens the inhibiting effect of CSR on idiosyncratic risk.

Suggested Citation

  • Wang, Tianyu & Yang, Bo, 2023. "Corporate social responsibility, stakeholders’ governance and idiosyncratic risk," Finance Research Letters, Elsevier, vol. 57(C).
    • Handle: RePEc:eee:finlet:v:57:y:2023:i:c:s1544612323005871
    DOI: 10.1016/j.frl.2023.104215
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612323005871
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2023.104215?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Huang, Yuxuan & Yang, Shenggang & Zhu, Qi, 2021. "Brand equity and the Covid-19 stock market crash: Evidence from U.S. listed firms," Finance Research Letters, Elsevier, vol. 43(C).
    2. Tzouvanas, Panagiotis & Kizys, Renatas & Chatziantoniou, Ioannis & Sagitova, Roza, 2020. "Environmental disclosure and idiosyncratic risk in the European manufacturing sector," Energy Economics, Elsevier, vol. 87(C).
    3. Arouri, Mohamed & Pijourlet, Guillaume & Williams, Benjamin, 2020. "Unpleasant arithmetic of socially responsible investment," Economics Letters, Elsevier, vol. 193(C).
    4. Guo, Chunying & Yang, Baochen & Fan, Ying, 2022. "Does mandatory CSR disclosure improve stock price informativeness? Evidence from China," Research in International Business and Finance, Elsevier, vol. 62(C).
    5. Yi, Yuyang & Zhang, Zongyi & Xiang, Cheng, 2022. "The value of CSR during the COVID-19 crisis: Evidence from Chinese firms," Pacific-Basin Finance Journal, Elsevier, vol. 74(C).
    6. Kong, Dongmin & Ji, Mianmian & Zhang, Fan, 2022. "Individual investors’ dividend tax reform and corporate social responsibility," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 78(C).
    7. Chakraborty, Atreya & Gao, Lucia Silva & Sheikh, Shahbaz, 2019. "Managerial risk taking incentives, corporate social responsibility and firm risk," Journal of Economics and Business, Elsevier, vol. 101(C), pages 58-72.
    8. Kong, Dongmin & Cheng, Xu & Jiang, Xiandeng, 2021. "Effects of political promotion on local firms’ social responsibility in China," Economic Modelling, Elsevier, vol. 95(C), pages 418-429.
    9. Guo Li & Na Li & Suresh P. Sethi, 2021. "Does CSR Reduce Idiosyncratic Risk? Roles of Operational Efficiency and AI Innovation," Production and Operations Management, Production and Operations Management Society, vol. 30(7), pages 2027-2045, July.
    10. Brzeszczyński, Janusz & Gajdka, Jerzy & Schabek, Tomasz, 2021. "How risky are the socially responsible investment (SRI) stocks? Evidence from the Central and Eastern European (CEE) companies," Finance Research Letters, Elsevier, vol. 42(C).
    11. Kong, Dongmin & Piao, Yin & Zhang, Wenzhe & Liu, Chenhao & Zhao, Ying, 2023. "Trust and corporate social responsibility: Evidence from CEO’s early experience," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 585-596.
    12. Chowdhury, Reza H. & Fu, Chengbo & Huang, Qiping & Lin, Nanying, 2021. "CSR disclosure of foreign versus U.S. firms: Evidence from ADRs," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 70(C).
    13. Asif Saeed & Robert Sroufe, 2021. "Performance, Risk, and Cost of Capital: Trends and Opportunities for Future CSR Research," JRFM, MDPI, vol. 14(12), pages 1-20, December.
    14. Chintrakarn, Pandej & Jiraporn, Pornsit & Treepongkaruna, Sirimon, 2021. "How do independent directors view corporate social responsibility (CSR) during a stressful time? Evidence from the financial crisis," International Review of Economics & Finance, Elsevier, vol. 71(C), pages 143-160.
    15. Zolotoy, Leon & O'Sullivan, Don & Chen, Yangyang, 2019. "Local religious norms, corporate social responsibility, and firm value," Journal of Banking & Finance, Elsevier, vol. 100(C), pages 218-233.
    16. He, Feng & Qin, Shuqi & Liu, Yuanyuan & Wu, Ji (George), 2022. "CSR and idiosyncratic risk: Evidence from ESG information disclosure," Finance Research Letters, Elsevier, vol. 49(C).
    17. Rouine, Ibtissem & Ammari, Aymen & Bruna, Maria Giuseppina, 2022. "Nonlinear impacts of CSR performance on firm risk: New evidence using a panel smooth threshold regression," Finance Research Letters, Elsevier, vol. 47(PB).
    18. Quang Trinh, Vu & Duong Cao, Ngan & Li, Teng & Elnahass, Marwa, 2023. "Social capital, trust, and bank tail risk: The value of ESG rating and the effects of crisis shocks," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 83(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tang, Meili & Wang, Yu, 2022. "Tax incentives and corporate social responsibility: The role of cash savings from accelerated depreciation policy," Economic Modelling, Elsevier, vol. 116(C).
    2. Fasano, Francesco & Javier Sánchez-Vidal, F. & La Rocca, Maurizio, 2022. "The role of government policies for Italian firms during the COVID-19 crisis," Finance Research Letters, Elsevier, vol. 50(C).
    3. Sofia Karagiannopoulou & Nikolaos Sariannidis & Konstantina Ragazou & Ioannis Passas & Alexandros Garefalakis, 2023. "Corporate Social Responsibility: A Business Strategy That Promotes Energy Environmental Transition and Combats Volatility in the Post-Pandemic World," Energies, MDPI, vol. 16(3), pages 1-21, January.
    4. Huang, Heshu & Wang, Caiting & Wang, Liukai & Yarovaya, Larisa, 2023. "Corporate digital transformation and idiosyncratic risk: Based on corporate governance perspective," Emerging Markets Review, Elsevier, vol. 56(C).
    5. Caiazza, Stefano & Galloppo, Giuseppe & La Rosa, Giovanni, 2023. "The mitigation role of corporate sustainability: Evidence from the CDS spread," Finance Research Letters, Elsevier, vol. 52(C).
    6. Wang, Ping & Wang, Xiaochun & Wu, Jie, 2023. "Executives' regulatory experiences and corporate social responsibility," Finance Research Letters, Elsevier, vol. 55(PB).
    7. Palmieri, Egidio & Ferilli, Greta B. & Stefanelli, Valeria & Geretto, Enrico F. & Polato, Maurizio, 2023. "Assessing the influence of ESG score, industry, and stock index on firm default risk: A sustainable bank lending perspective," Finance Research Letters, Elsevier, vol. 57(C).
    8. Leon Zolotoy & Don O’Sullivan & Keke Song, 2021. "The Role of Ethical Standards in the Relationship Between Religious Social Norms and M&A Announcement Returns," Journal of Business Ethics, Springer, vol. 170(4), pages 721-742, May.
    9. Xiaodong Teng & Kun-Shan Wu & Lopin Kuo & Bao-Guang Chang, 2023. "Investigating the double-edged sword effect of environmental, social and governance practices on corporate risk-taking in the high-tech industry," Oeconomia Copernicana, Institute of Economic Research, vol. 14(2), pages 511-549, June.
    10. Yu, Haixu & Liang, Chuanyu & Liu, Zhaohua & Wang, He, 2023. "News-based ESG sentiment and stock price crash risk," International Review of Financial Analysis, Elsevier, vol. 88(C).
    11. Shakil, Mohammad Hassan, 2021. "Environmental, social and governance performance and financial risk: Moderating role of ESG controversies and board gender diversity," Resources Policy, Elsevier, vol. 72(C).
    12. Jianyu Zhao & Jing Qu & Lei Wang, 2023. "Heterogeneous institutional investors, environmental information disclosure and debt financing pressure," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 27(1), pages 253-296, March.
    13. Mengyao Xia & Bangzhu Zhu & Helen Huifen Cai, 2023. "Does duration of team governance decrease corporate carbon emission intensity," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(3), pages 1363-1388, May.
    14. Ahmad, Wasim & Kutan, Ali M. & Chahal, Rishman Jot Kaur & Kattumuri, Ruth, 2021. "COVID-19 Pandemic and firm-level dynamics in the USA, UK, Europe, and Japan," International Review of Financial Analysis, Elsevier, vol. 78(C).
    15. Khaled Alsaifi & Marwa Elnahass & Abdullah M. Al-Awadhi & Aly Salama, 2022. "Carbon disclosure and firm risk: evidence from the UK corporate responses to climate change," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 12(3), pages 505-526, September.
    16. Deng, Xiang & Li, Weihao & Ren, Xiaohang, 2023. "More sustainable, more productive: Evidence from ESG ratings and total factor productivity among listed Chinese firms," Finance Research Letters, Elsevier, vol. 51(C).
    17. Kong, Dongmin & Xiong, Mengxu & Qin, Ni, 2022. "Business Tax reform and CSR engagement: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 82(C).
    18. Fariha Jahan & Jungmu Kim, 2023. "Does the Shield Effect of CSR Work in Crises? Evidence in Korea," Sustainability, MDPI, vol. 15(11), pages 1-18, June.
    19. Ji, Mianmian & Lv, Wendai, 2022. "Demonstration zones reform and corporate philanthropy: Evidence from China," Economic Modelling, Elsevier, vol. 115(C).
    20. Zhang, Xiaotao & Wang, Ziqiao & Hao, Jing & Liu, Jiubiao, 2022. "Stock market entry timing and retail investors' disposition effect," International Review of Financial Analysis, Elsevier, vol. 82(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:57:y:2023:i:c:s1544612323005871. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.