Oil price uncertainty, CSR and institutional quality: A cross-country evidence

Abstract

This study investigates the relationship between crude oil price uncertainty and corporate social responsibility activities of oil and gas companies around the world. Using a cross-country dataset that consists of 283 oil and gas firms from 27 countries for the period of 2002–2017, we reveal three key findings. First, consistent with our hypothesis, the oil price uncertainty statistically significantly and negatively impacts corporate social responsibility engagement. Second, firms in the oil and gas industry reduce activities in the environmental and social pillars of corporate social responsibility more aggressively than those in the corporate governance pillar. Third, the negative effect of crude oil price uncertainty on corporate social responsibility is moderated by the country-level institutional quality. Our main results are consistent using a wide range of robustness tests.