Customer Relationships, Corporate Social Responsibility, and Stock Price Reaction: Lessons from China during Health Crisis Times

Sabri Boubaker, Zhenya Liu and Yaosong Zhan
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Zhenya Liu: Renming University of China, CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon
Yaosong Zhan: Renming University of China

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Abstract: This paper studies the effect of corporate social responsibility (CSR) and customer relationships on the stock price during the COVID-19 pandemic. The empirical results show that CSR practices improve firms' resilience to the negative health crisis shocks. The functional principal component analysis helps display the relationship between CSR and cumulative abnormal returns (CAR). It shows that CSR practices improve customers' cooperation willingness. Customers of high-CSR firms pay invoices faster during the crisis, which results in less increment of accounts receivable. Hence, high-CSR firms gain more cash support from their customers to overcome the COVID-19 pandemic, resulting in higher cumulative abnormal returns. \textcopyright 2022 Elsevier Inc.

Keywords: Accounts receivables; China stock market; Corporate social responsibility; COVID-19; Cumulative abnormal returns (search for similar items in EconPapers)
Date: 2022
Note: View the original document on HAL open archive server: https://normandie-univ.hal.science/hal-04452665v1
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Published in Finance Research Letters, 2022, 47, ⟨10.1016/j.frl.2022.102699⟩

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Journal Article: Customer relationships, corporate social responsibility, and stock price reaction: Lessons from China during health crisis times (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04452665

DOI: 10.1016/j.frl.2022.102699

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