Does corporate social responsibility matter for corporate stability? Evidence from China

The study examines the link between corporate social responsivity (CSR) and corporate stability, and how product market competition affects this relationship. Using the unique CSR scores to the Chinese firms over the period 2009-2015, we find firms with stronger CSR performance tend to be more stable. This result consistent with the argument that ethically forward-looking managers employ CSR as a powerful tool to manage risk. However, this above positive association between CSR and stability is significant only in highly competitive industries, suggesting that product market competition provides modest incentives for managers to invest in CSR activities for general stakeholders' interests.