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CSR decoupling and stock price crash risk: Evidence from China

Peng Wan, Mengjiao Xu, Yu Yang and Xiangyu Chen ()
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Peng Wan: Zhejiang Gongshang University
Mengjiao Xu: Zhejiang Gongshang University
Yu Yang: Zhejiang Gongshang University
Xiangyu Chen: Zhejiang University of Finance and Economics

Palgrave Communications, 2024, vol. 11, issue 1, 1-12

Abstract: Abstract This paper examines the efficacy of corporate social responsibility (CSR) decoupling on stock price crash risk (SPCR). Selecting Chinese listed companies over the 2010–2019 period as a sample, we find that CSR decoupling exacerbates SPCR, and this relationship still holds after a battery of endogeneity and robustness tests. Further analysis reveals that within companies characterized by higher agency risks, CSR decoupling exacerbates SPCR more significantly, suggesting the role of information asymmetry as a crucial mechanism through which CSR decoupling influences SPCR. Our results show CSR decoupling’s harm on the capital market and help clarify mixed evidence in existing studies.

Date: 2024
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DOI: 10.1057/s41599-024-03521-4

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