Abstract
This study analyzes the impact of corporate social responsibility (CSR) fulfillment on corporate risk-taking to assist stakeholders in identifying the “double-edged sword” role of CSR activities and provide empirical evidence for enterprises to properly carry out CSR activities. The results show that the self-interest instrumentalization of CSR activities intensifies agency conflict, and CSR fulfillment weakens risk-taking to a certain extent. When CSR fulfillment reaches a certain value, CSR activities can improve risk-taking. Then, CSR fulfillment and risk-taking show a U-shaped relationship. Further analysis shows that the impacts of CSR on debt financing and R&D input reflect the U-shaped effect pathways of CSR fulfillment on risk-taking. Finally, it is suggested that CSR activities should be avoided to become the “self-interest tool” of the management. The regulators guide enterprises to break through the inflection point of the U-shaped effect and consider more for the stakeholders’ overall interests. Additionally, the regulators establish an effective compensation system to ensure that the enterprises with adequate CSR fulfillment obtain high-quality capital resources and promote the sustainable development of the capital market.
Highlights
Accepted: 17 December 2021In recent years, with increasing economic uncertainty in the world [1], the issue of risk-taking has attracted extensive attention in the academic circle
Fulfillment on risk-taking to provide empirical evidence for regulators to guide enterprises to properly carry out corporate social responsibility (CSR) activities
The results show that CSR fulfillment reflects the self-interest of the management to a certain extent
Summary
With increasing economic uncertainty in the world [1], the issue of risk-taking has attracted extensive attention in the academic circle. Sustainability 2022, 14, 531 active CSR fulfillment is conducive to reducing risks. Existing studies have discussed the linear relationship between CSR and risk-taking more. If enterprises fulfill their social responsibilities based on the interests of stakeholders, CSR activities are likely to improve risk-taking. In accordance with the realistic considerations, this study deeply analyzes the impact of CSR fulfillment on risk-taking. Existing studies analyze the linear relationship between CSR fulfillment and risk-taking [8,16]. Few studies have examined the nonlinear effect of CSR fulfillment on risk-taking. Existing literature analyzed the effect of CSR fulfillment on risk-taking from the resource dependence perspective [9], Zhao et al [17]. Few studies have explained the effect pathway of CSR fulfillment on risk-taking from emerging economies.
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