The mediating effect of stock price crash risk on the relationship between corporate social responsibility and cost of equity moderated by state ownership: Moderated‐mediation analysis

Cao Thi Mien Thuy, Nguyen Vinh Khuong, Nguyen Thi Canh and Nguyen Thanh Liem

Corporate Social Responsibility and Environmental Management, 2022, vol. 29, issue 5, 1384-1395

Abstract: This paper investigates the roles that stock price crash risk and state ownership play in the relationship between CSR disclosure and cost of equity capital (COE). The research sample comprises 225 listed firms in Vietnam. We use GMM estimation technique and Sobel test to test the empirical hypotheses. To begin with, there is a complementary mediation effect of stock price crash risk in the relationship between CSR disclosure and COE. Notably, our study is the first empirical one to confirm that stock price crash risk serves as an intermediate in the above relationship. Second, state ownership strengthens the negative impact of CSR disclosure on COE significantly. The paper offers insight into how stock price crash risk and state ownership affect the merit of CSR disclosure towards firms' COE and how the lack of consideration of such factors could be the reason for the inconsistent findings in the previous studies.

Date: 2022
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https://doi.org/10.1002/csr.2276

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Persistent link: https://EconPapers.repec.org/RePEc:wly:corsem:v:29:y:2022:i:5:p:1384-1395

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