From Corporate Social Responsibility to Stock Price Crash Risk: Modelling the Mediating Role of Firm Performance in an Emerging Market

Cao Thi Mien Thuy, Trinh Quoc Trung, Nguyen Vinh Khuong and Nguyen Thanh Liem
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Cao Thi Mien Thuy: Faculty of Finance and Banking, University of Economics and Law, Ho Chi Minh City 700000, Vietnam
Trinh Quoc Trung: Faculty of Finance and Banking, University of Economics and Law, Ho Chi Minh City 700000, Vietnam
Nguyen Vinh Khuong: Vietnam National University, Ho Chi Minh City 700000, Vietnam
Nguyen Thanh Liem: Faculty of Finance and Banking, University of Economics and Law, Ho Chi Minh City 700000, Vietnam

Sustainability, 2021, vol. 13, issue 22, 1-17

Abstract: The literature on the link between corporate social responsibility (CSR) disclosure and stock price crash risk suggests that it is far more complicated than a plain one-to-one relationship. In this study, we examine how CSR disclosure affects the stock price crash risk and whether firm performance acts as a mediating variable in this relationship. The CSR disclosure index is built using the content analysis technique and the GRI criteria. We choose 225 businesses in Vietnam, comprising 159 firms listed on HOSE and 66 firms listed on HNX. Using the techniques of OLS, LOGIT, GMM, and the Sobel test and replacing different measures of dependent and mediator variable to enhance the robustness of our findings, we reach two important results. To begin with, CSR disclosure has a negative influence on the stock price crash risk of Vietnam’s listed firms. Second, in the aforementioned relationship, firm performance serves as an intermediate. Our results imply that listed firms should engage in CSR practices and disclosure in order to raise the firm’s performance and lower the stock price crash risk.

Keywords: corporate social responsibility; firm performance; stock price crash risk; mediation roles (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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