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Does corporate social responsibility protect shareholder value from the shock of COVID‐19? Evidence from China

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  • Danni Chen
  • Xue Chen
  • Huiying Sun

Abstract

Our study examines whether and how increased engagement in social responsibility activities by a firm affects movements in its stock prices during the COVID‐19 public health crisis, which is regarded as an exogenous shock to economic ties between focal firms and their customers, employees, and suppliers. We find that corporate social responsibility has an inverted U‐shaped relationship with shareholder value. The nonlinear relationship is more dominant at firms with higher cash‐flow constraints and weaker cost‐adjustment capabilities. Our research also generates meaningful implications for business practices.

Suggested Citation

  • Danni Chen & Xue Chen & Huiying Sun, 2023. "Does corporate social responsibility protect shareholder value from the shock of COVID‐19? Evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(3), pages 3077-3094, September.
    • Handle: RePEc:bla:acctfi:v:63:y:2023:i:3:p:3077-3094
    DOI: 10.1111/acfi.13017
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