Corporate Environmental Responsibility and Firm Risk

被引:280
作者
Cai, Li [1 ]
Cui, Jinhua [2 ]
Jo, Hoje [3 ]
机构
[1] Illinois Inst Technol, Stuart Sch Business, 10 West 35th St,18th Floor, Chicago, IL 60616 USA
[2] Korea Univ, Sch Business, Seoul, South Korea
[3] Santa Clara Univ, Leavey Sch Business, 500 El Camino Real, Santa Clara, CA 95053 USA
关键词
Corporate environmental responsibility; Corporate social responsibility; Risk reduction; Resource constraint; SOCIAL-RESPONSIBILITY; FINANCIAL PERFORMANCE; IDIOSYNCRATIC RISK; MANAGEMENT; SUSTAINABILITY; EQUILIBRIUM; PERSISTENCE; GOVERNANCE; DISCLOSURE; STRATEGY;
D O I
10.1007/s10551-015-2630-4
中图分类号
F [经济];
学科分类号
02 ;
摘要
In this study, we examine the relation between corporate environmental responsibility (CER) and risk in U.S. public firms. We develop and test the risk-reduction, resource-constraint, and cross-industry variation hypotheses. Using an extensive U.S. sample during the 1991-2012 period, we find that for U.S. industries as a whole, CER engagement inversely affects firm risk after controlling for various firm characteristics. The result remains robust when we use firm fixed effect or an alternative measure of CER using principal component analysis or downside risk measures. To address the concern of endogeneity bias, we use a system equations approach and dynamic system generalized methods of moment regressions, and continue to find that environmentally responsible firms experience lower risk. These findings support the risk-reduction hypothesis, but not the resource-constraint hypothesis, along with the notion that the top management in U.S. firms is generally risk averse and that their CER engagement facilitates their risk management efforts. Our cross-industry analysis further reveals that the inverse CER-risk association mainly comes from the manufacturing sector, whereas in the service sector, CER tends to increase firm risk.
引用
收藏
页码:563 / 594
页数:32
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