Does Corporate Social Responsibility Impact on Corporate Risk-Taking? Evidence from Emerging Economy

Xiao Li, Gang Liu, Qinghua Fu, Abdul Aziz Abdul Rahman, Abdelrhman Meero and Muhammad Safdar Sial
Additional contact information
Xiao Li: Systems and Industrial Engineering Technology Research Center, Zhongyuan University of Technology, Zhengzhou 451191, China
Gang Liu: Hubei Enterprise Culture Research Center, Hubei University of Economics, Wuhan 430205, China
Qinghua Fu: Department of Business Administration, Moutai Institute, Renhuai 564507, China
Abdul Aziz Abdul Rahman: College of Business Administration, Kingdom University, Riffa 40434, Bahrain
Abdelrhman Meero: College of Business Administration, Kingdom University, Riffa 40434, Bahrain
Muhammad Safdar Sial: Department of Management Sciences, COMSATS University Islamabad (CUI), Islamabad 44000, Pakistan

Sustainability, 2022, vol. 14, issue 1, 1-26

Abstract: This study analyzes the impact of corporate social responsibility (CSR) fulfillment on corporate risk-taking to assist stakeholders in identifying the “double-edged sword” role of CSR activities and provide empirical evidence for enterprises to properly carry out CSR activities. The results show that the self-interest instrumentalization of CSR activities intensifies agency conflict, and CSR fulfillment weakens risk-taking to a certain extent. When CSR fulfillment reaches a certain value, CSR activities can improve risk-taking. Then, CSR fulfillment and risk-taking show a U-shaped relationship. Further analysis shows that the impacts of CSR on debt financing and R&D input reflect the U-shaped effect pathways of CSR fulfillment on risk-taking. Finally, it is suggested that CSR activities should be avoided to become the “self-interest tool” of the management. The regulators guide enterprises to break through the inflection point of the U-shaped effect and consider more for the stakeholders’ overall interests. Additionally, the regulators establish an effective compensation system to ensure that the enterprises with adequate CSR fulfillment obtain high-quality capital resources and promote the sustainable development of the capital market.

Keywords: CSR; risk-taking; U-shaped effect; debt financing; R&D input (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.mdpi.com/2071-1050/14/1/531/pdf (application/pdf)
https://www.mdpi.com/2071-1050/14/1/531/ (text/html)

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:gam:jsusta:v:14:y:2022:i:1:p:531-:d:717496

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().