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Corporate Social Responsibility and Firm Risk: Evidence from Borsa Istanbul Stock Exchange

Author

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  • Metin BORAK
  • Hatice DOGUKANLI

Abstract

Corporate social responsibility (CSR) activities are expected to reduce firm risk. Because it is known that CSR activities increase financial performance and firm reputation while reducing the cost of equity and debt, and information asymmetry. This study examines the impact of corporate social responsibility on firm risk (total risk, systematic risk and unsystematic risk). The sample of the study includes companies that are traded in Borsa Istanbul and have corporate governance ratings over the period 2009–2020. Finally, the sample of the study consists of 37 companies and 339 observations. The findings show that CSR has no statistically significant effect on total, systematic and unsystematic risk. These results do not change even when one year lagged values of the explanatory variables are used.

Suggested Citation

  • Metin BORAK & Hatice DOGUKANLI, 2022. "Corporate Social Responsibility and Firm Risk: Evidence from Borsa Istanbul Stock Exchange," Journal of BRSA Banking and Financial Markets, Banking Regulation and Supervision Agency, vol. 16(1), pages 87-106.
    • Handle: RePEc:bdd:journl:v:16:y:2022:i:1:p:87-106
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    Keywords

    Corporate social responsibility; firm risk; systematic risk; unsystematic risk.;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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