Managerial risk taking incentives, corporate social responsibility and firm risk

Purpose This study aims to examine the effects of top management team (TMT) heterogeneity and corporate social responsibility (CSR) on the firm risk of Bursa Malaysia listed firms. Also, this study examines the moderating effect of CSR between TMT heterogeneity and firm risk. Design/methodology/approach This study uses panel regression models to test the hypotheses. The sample of this study is Bursa Malaysia non-financial listed firms from 2013 to 2017 with 3,055 observations. Findings This study finds significant effects of TMT age and tenure heterogeneities on total risk. Effects on idiosyncratic risk are evident only within age heterogeneity. Further, this study finds negative effects of CSR on total and idiosyncratic risks. CSR significantly moderates the relationship between total TMT heterogeneity and firm systematic risk. Practical implications This study reduces the literature gap by providing useful insights on the effects of CSR activities and TMT heterogeneity on firm risk. The findings can also provide hints to investors to assist them in assessing firm risk based on TMT heterogeneity and firms’ CSR. This study can also benefit shareholders in their attempts to mitigate the risk of their portfolio by investing in firms that are socially responsible as firms with high CSR suffer lower total and idiosyncratic risks. Originality/value Previous studies have emphasised on the influence of TMT characteristics and CSR on firm performance. However, studies that investigate the effects of TMT heterogeneity and CSR on firm risk are limited in the context of Malaysia.

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Corporate Social Responsibility (CSR) and Risk Taking: Evidence from Indonesia

ACRN Journal of Finance and Risk Perspectives ◽

10.35944/jofrp.2019.8.1.010 ◽

2019 ◽

Vol 8 (1) ◽

pp. 152-162

Author(s):

Rezki Ananda Mulia ◽

Joni Joni

Keyword(s):

Corporate Governance ◽

Corporate Social Responsibility ◽

Social Responsibility ◽

Risk Taking ◽

Stock Exchange ◽

Listed Firms ◽

Market Risks ◽

Corporate Social

In this paper, we investigate the effect of Corporate Social Responsibility (CSR) on risk taking in Indonesia. We hand collect CSR and other corporate governance data from 2016-2017 for publicly listed firms on the Indonesian Stock Exchange (IDX). The results, based on 820 firm-year observations, suggest that CSR activity is negatively related to corporate’s risk. This means the presence of CSR activity is positively perceived by stakeholders. Therefore, it reduces operating and market risks of the company. Also, we test for endogeneity and the main findings remain similar.

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Corporate Social Responsibility Disclosure and Its Effect on Firm Risk: An Empirical Research on Vietnamese Firms

Sustainability ◽

10.3390/su132212933 ◽

2021 ◽

Vol 13 (22) ◽

pp. 12933

Author(s):

Cao Thi Mien Thuy ◽

Nguyen Vinh Khuong ◽

Nguyen Thanh Liem

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Voluntary Disclosure ◽

Emerging Market ◽

Listed Companies ◽

Policy Implications ◽

Firm Risk ◽

Research Perspective ◽

Csr Disclosure ◽

Corporate Social

The purpose of the study was to gather empirical evidence on the influence of corporate social responsibility (CSR) disclosure on firm risk of Vietnam’s publicly listed companies. We used adjusted OLS estimation and regression analysis with adjusted panel data for heteroskedasticity and/or autocorrelation to analyze the correlation using data from 225 listed companies on Vietnam’s stock market from 2014 to 2019. The study’s sample period is relatively recent in the emerging market, especially considering regulatory differences and the availability of voluntary disclosure requirements. The findings of research on the relationship between CSR and corporate risk are mixed, particularly in developing markets. Research findings reveal a negative and significant association between CSR and firm risk, implying that stronger CSR performance lowers a company’s risk. This aims to strengthen a research perspective of this connection in emerging countries. Following that, we discuss some policy implications for listed firms and regulators in CSR disclosure.

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The effect of corporate social responsibility on firm risk

Social Responsibility Journal ◽

10.1108/srj-08-2013-0093 ◽

2015 ◽

Vol 11 (2) ◽

pp. 324-339 ◽

Cited By ~ 18

Author(s):

Pascal Nguyen ◽

Anna Nguyen

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Positive Influence ◽

Employee Relations ◽

Fixed Cost ◽

Firm Risk ◽

Single Measure ◽

Content Type ◽

Aggregate Index ◽

Corporate Social

Purpose – The purpose of this paper is to investigate the link between corporate social responsibility (CSR) and risk for a sample of US firms rated by KLD. Design/methodology/approach – The authors’ approach involves three distinctive features. First, the authors use individual indicators of CSR to highlight which CSR dimension matters most for a firm’s risk. Second, the authors distinguish CSR strengths and concerns to reveal potentially nonlinear relationships. Third, the authors use a measure of risk that takes into account the predictable changes in a firm’s performance and that does not collapse the panel data into a single cross-section. This allows the CSR–risk relationship to be estimated by the variation within each firm and the variation across firms. Findings – Consistent with existing results, the authors find that CSR concerns relating to diversity, employee relations and corporate governance increase the risk to shareholders. More interestingly, the authors show that CSR strengths relating to diversity and employee relations are also associated with higher risk. The positive influence of both CSR strengths and concerns on a firm’s risk is confirmed using aggregate CSR indicators. Research limitations/implications – The results confirm that CSR strengths and concerns represent distinct constructs that should not be aggregated into a single measure. The effect of poor CSR on firm risk is more significant than what would appear to be the case using an aggregate index. Practical implications – Although lack of CSR engagement may not affect (and may even benefit) a firm’s current performance, it may seriously damage its performance in the future. Firms should be aware of this risk. Originality/value – The positive relationship found between CSR and firm risk underscores the inherent conflict between the interests of employees and those of shareholders. By committing to a more favorable treatment of their employees, firms incur a fixed cost that inevitably transfers more risk to their shareholders.

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Corporate Social Responsibility and Firm Risk: Theory and Empirical Evidence

Management Science ◽

10.1287/mnsc.2018.3043 ◽

2019 ◽

Vol 65 (10) ◽

pp. 4451-4469 ◽

Cited By ~ 120

Author(s):

Rui Albuquerque ◽

Yrjö Koskinen ◽

Chendi Zhang

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Empirical Evidence ◽

Risk Theory ◽

Firm Risk ◽

Corporate Social

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Corporate social responsibility and bank risk

Journal of Business Economics ◽

10.1007/s11573-021-01069-2 ◽

2021 ◽

Author(s):

Florian Neitzert ◽

Matthias Petras

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Risk Mitigation ◽

Bank Risk ◽

Firm Risk ◽

Environmental Aspects ◽

Corporate Social Responsibility Activity ◽

Corporate Social ◽

The Impact ◽

Risk Reducing

AbstractThe concept of sustainable banking has developed significantly in recent years. Previous research found that corporate social responsibility reduces firm risk, yet this empirical evidence refers almost exclusively to non-financial companies and it remains unclear whether the risk-mitigating effect stems from the environmental, social, or governance pillar. The paper aims to analyse the impact of corporate social responsibility activities on bank risk and to explore its determinants. Using a sample of 582 banks worldwide over the period from 2002 to 2018, we confirm a risk-reducing effect of the corporate social responsibility activity on an aggregated level. The decomposition of this effect suggests that environmental activities determine this risk mitigation. In contrast, social and governance activities do not show similarly unambiguous results. In this way, our analysis highlights the great importance of environmental aspects in banks’ risk management.

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The Effect of CSR Disclosure On Firm Risk In Mining Companies Listed On IDX

E-Jurnal Akuntansi ◽

10.24843/eja.2019.v29.i02.p07 ◽

2019 ◽

Vol 29 (2) ◽

pp. 577

Author(s):

Sayu Aryantini Thanaya ◽

A.A.G.P. Widanaputra

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Stock Exchange ◽

Linear Regression Analysis ◽

Firm Risk ◽

Research Results ◽

Mining Companies ◽

Corporate Social Responsibility Disclosure ◽

Csr Disclosure ◽

Corporate Social

This research aims to obtain empirical evidence on the effect of corporate social responsibility disclosure on firm risk. This research was conducted on mining companies listed on Indonesia Stock Exchange in 2015-2017. The sample determination method is purposive sampling, with 109 observations. The data analysis technique used is simple linear regression analysis. Based on the research results, it is known that corporate social responsibility disclosure has a negative effect on firm risk. This means that the more CSR disclosure of a company, the lower the firm risk. The implications of the research results supports the signaling theory, stakeholder theory, and legitimacy theory, where risk management efforts are done by sending positive signals through the disclosure of CSR information, to gain the support and trust from the company's stakeholders, and increase the organization's legitimacy. On the other hand, this research provides additional information for all company stakeholders in making decisions. Keywords : CSR Disclosure; Firm Risk; Mining.

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