The lower the integrity, the higher the risk: how does the lack of corporate integrity exacerbate risk?

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Corporate integrity is not only a core element of its success but also plays a crucial role in the development of the corporation itself, consumers, investors, and society as a whole. This paper focuses on companies listed on the A-share market from 2017 to 2022, delving into the impact of corporate integrity on business risk. The findings indicate a significant negative correlation between corporate integrity and business risk, primarily mediated through the profitability of the corporation. Further heterogeneous analysis reveals that for large and state-owned enterprises, the impact of corporate integrity on their risk levels is particularly pronounced.