CSR engagement and financial risk: A virtuous circle? International evidence

Pierre Chollet and Blaise Sandwidi
Additional contact information
Pierre Chollet: MRM - Montpellier Research in Management - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier
Blaise Sandwidi: IRG - Institut de Recherche en Gestion - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12

Post-Print from HAL

Abstract: This paper investigates the complex relationship between the financial risk of firms and their engagement in corporate social responsibility (CSR), measured by Thomson Reuters ASSET4 environmental, social, and governance scores. Financial risk is estimated by the usual proxies: systematic, firm-specific, and total risks. Analyzing an international sample of 23,194 firm-year observations from 2003 to 2012 by using a panel vector autoregressive (VAR) model with generalized method of moments (GMM) estimations, we demonstrate a virtuous circle between corporate social performance (CSP) and risk (specific and total). More specifically, we show that a firm's good social and governance performance reduces its financial risk and thereby reinforces its commitment to good governance and environmental practices.

Keywords: Corporate; financial; risk; .; Corporate; social; responsibility; .; Corporate; social; performance; .; ESG; scores; .; Virtuous; circle (search for similar items in EconPapers)
Date: 2018-11
References: Add references at CitEc
Citations: View citations in EconPapers (64)

Published in Global Finance Journal, 2018, 38, pp.65-81. ⟨10.1016/j.gfj.2018.03.004⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:hal:journl:hal-02048716

DOI: 10.1016/j.gfj.2018.03.004

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().