Corporate Social Responsibility and Firm Liquidity Risk: U.S. Evidence
In this study, we empirically investigate whether and to what extent corporate social responsibility (CSR) may affect firm liquidity risk. We define liquidity risk as the covariance between market-wide liquidity shocks and individual firms’ stock returns and employ two methods to estimate firm liqui...
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MDPI AG
2021
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oai:doaj.org-article:f97fa57a868043fa80d6114c6b9c41772021-11-25T19:05:18ZCorporate Social Responsibility and Firm Liquidity Risk: U.S. Evidence10.3390/su1322128942071-1050https://doaj.org/article/f97fa57a868043fa80d6114c6b9c41772021-11-01T00:00:00Zhttps://www.mdpi.com/2071-1050/13/22/12894https://doaj.org/toc/2071-1050In this study, we empirically investigate whether and to what extent corporate social responsibility (CSR) may affect firm liquidity risk. We define liquidity risk as the covariance between market-wide liquidity shocks and individual firms’ stock returns and employ two methods to estimate firm liquidity risk. We find a negative association between CSR and firm liquidity risk after controlling for various firm characteristics, i.e., year and industry fixed effects. Our results are robust to possible endogeneity issues when we adopt two-stage lease square estimator and dynamic GMM estimator. In addition, we document that the negative relation between CSR and firm liquidity risk is more pronounced when firms have higher reliance on external financing.Hong ZhaoZixuan JiaoJianrong WangAmina KamarMDPI AGarticleliquidity riskliquiditycorporate social responsibilitysystematic riskEnvironmental effects of industries and plantsTD194-195Renewable energy sourcesTJ807-830Environmental sciencesGE1-350ENSustainability, Vol 13, Iss 12894, p 12894 (2021) |
institution |
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topic |
liquidity risk liquidity corporate social responsibility systematic risk Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350 |
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liquidity risk liquidity corporate social responsibility systematic risk Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350 Hong Zhao Zixuan Jiao Jianrong Wang Amina Kamar Corporate Social Responsibility and Firm Liquidity Risk: U.S. Evidence |
description |
In this study, we empirically investigate whether and to what extent corporate social responsibility (CSR) may affect firm liquidity risk. We define liquidity risk as the covariance between market-wide liquidity shocks and individual firms’ stock returns and employ two methods to estimate firm liquidity risk. We find a negative association between CSR and firm liquidity risk after controlling for various firm characteristics, i.e., year and industry fixed effects. Our results are robust to possible endogeneity issues when we adopt two-stage lease square estimator and dynamic GMM estimator. In addition, we document that the negative relation between CSR and firm liquidity risk is more pronounced when firms have higher reliance on external financing. |
format |
article |
author |
Hong Zhao Zixuan Jiao Jianrong Wang Amina Kamar |
author_facet |
Hong Zhao Zixuan Jiao Jianrong Wang Amina Kamar |
author_sort |
Hong Zhao |
title |
Corporate Social Responsibility and Firm Liquidity Risk: U.S. Evidence |
title_short |
Corporate Social Responsibility and Firm Liquidity Risk: U.S. Evidence |
title_full |
Corporate Social Responsibility and Firm Liquidity Risk: U.S. Evidence |
title_fullStr |
Corporate Social Responsibility and Firm Liquidity Risk: U.S. Evidence |
title_full_unstemmed |
Corporate Social Responsibility and Firm Liquidity Risk: U.S. Evidence |
title_sort |
corporate social responsibility and firm liquidity risk: u.s. evidence |
publisher |
MDPI AG |
publishDate |
2021 |
url |
https://doaj.org/article/f97fa57a868043fa80d6114c6b9c4177 |
work_keys_str_mv |
AT hongzhao corporatesocialresponsibilityandfirmliquidityriskusevidence AT zixuanjiao corporatesocialresponsibilityandfirmliquidityriskusevidence AT jianrongwang corporatesocialresponsibilityandfirmliquidityriskusevidence AT aminakamar corporatesocialresponsibilityandfirmliquidityriskusevidence |
_version_ |
1718410378260512768 |