Stakeholders and the Stock Price Crash Risk: What Matters in Corporate Social Performance?

Dumitrescu, Ariadna; Zakriya, Mohammed

doi:10.2139/ssrn.3305213

Cited by 1 publication

(2 citation statements)

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“…Nevertheless, Yildiz and Karan (2020) found that environmental CSR subcategory has a nonlinear relationship with stock price crash risk. Dumitrescu and Zakriya (2021) contended that firms' environmental initiatives have trivial effects on crash risk. Ben-Nasr and Ghouma (2018) claimed that employee category of CSR increases the likelihood of stock price crashes.…”

Section: Stock Price Crash Riskmentioning

confidence: 99%

“…It refers to the circumstance of extreme negative values in the distribution of returns on specific stocks (Chen et al, 2001;Kim et al, 2014;Thuy et al, 2022). Recent literature has begun to investigate the impact of CSR on crash risk, however, yielding mixed findings (Dumitrescu & Zakriya, 2021;Kim et al, 2014;Lee, 2016;Wu & Hu, 2019). Socially responsible firms are likely to disclose sufficient and objective CSR information, which results in less financial opacity, and a smaller likelihood that the stock price will deviate from the intrinsic value of the firm (Gelb & Strawser, 2001).…”

Section: Introductionmentioning

confidence: 99%

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Corporate social responsibility, family involvement, and stock price crash risk

Yang

Wang

Bai

2022

Corp Soc Responsibility Env

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This study responds to the call in Vazquez's (2018) by providing more empirical evidence on ethical issues in family business. Drawing from the agency theory, we provide new evidence about the "CSRstock price crash risk" nexus by examining the moderating effect of family involvement. With a focus on the Chinese capital market, we find that corporate social responsibility (CSR) negatively affects stock price crash risk. Such negative correlation is stronger for family firms as compared with nonfamily firms. Three proxies of family involvement, termly family member as a CEO, lower proportion of variable compensation to CEO, and greater family control, can strengthen the alleviating effect of CSR on crash risk. Nevertheless, a secondgeneration successor as executive does not exert any moderating effect. Our findings advance the comprehension of the "CSR-crash risk" nexus from the family business viewpoint and emphasize the important role of CSR in stabilizing the stock market.

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Section: Stock Price Crash Riskmentioning

confidence: 99%