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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Autores principales: Hong Zhao, Zixuan Jiao, Jianrong Wang, Amina Kamar
Formato: article
Lenguaje:EN
Publicado: MDPI AG 2021
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Acceso en línea:https://doaj.org/article/f97fa57a868043fa80d6114c6b9c4177
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spelling 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 DOAJ
collection DOAJ
language EN
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
spellingShingle 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
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