The effect of suppliers' corporate social responsibility concerns on customers' stock price crash risk

Chen, Huimin (Amy), Khondkar Karim and Anqi Tao

Advances in accounting, 2021, vol. 52, issue C

Abstract: We investigate the spillover effect of corporate social responsibility (CSR) concerns along the supply chain. We propose an information incorporation effect for whether suppliers' CSR concerns affect customers' stock price crash risk. Customers' investors can incorporate information about suppliers' CSR into stock price valuations, lowering the probability of abrupt stock price crashes. Our findings support the information incorporation effect. Suppliers' CSR concerns are negatively associated with customers' stock price crash risk. The negative relationship is more pronounced for firms with high media coverage, negative media sentiment, high investor attention, negative investor sentiment, low trade policy uncertainty, and low political uncertainty. Moreover, we rule out the alternative explanation that suppliers' CSR strengths dominate the effect. Our main finding is supported by change analysis and robustness tests, including an alternative measure test.

Keywords: Corporate social responsibility; Supply chain; Stock price crash risk; Information externality (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0882611021000043
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:advacc:v:52:y:2021:i:c:s0882611021000043

DOI: 10.1016/j.adiac.2021.100516

Access Statistics for this article

Advances in accounting is currently edited by Dennis Caplan

More articles in Advances in accounting from Elsevier
Bibliographic data for series maintained by Catherine Liu ().