How do Corporate Social Responsibility and Corporate Governance Affect Stock Price Crash Risk?
Ahmed Imran Hunjra1, Rashid Mehmood1 and Tahar Tayachi2*
1PMAS-Arid Agriculture University Rawalpindi, Pakistan
2Effat University, Saudi Arabia
Citation: Hunjra AI, Mehmood R, Tayachi T (2020) How do Corporate Social Responsibility and Corporate Governance Affect Stock Price Crash Risk?. SciTech Management Sciences 2020. Thailand
Received: February 13, 2020 Accepted: February 17, 2020 Published: February 17, 2020
Abstract
We investigate the impact of corporate social responsibility (CSR) and corporate governance on stock price crash risk in manufacturing sector firms of India and Pakistan. We collect data of nine years from 2010 to 2018 from DataStream of 353 manufacturing firms. We apply the Generalized Method of Moments (GMM) to the analysis of the data. We find that when firms actively engage in CSR activities, they lead to reduced stock price crash risk. Findings of corporate governance components of our study reveal that managerial ownership has a significant positive impact on stock price crash risk, while board size and CEO duality show a significant and negative impact on stock price crash risk.
Keywords: CSR, Corporate governance, Stock price crash risk, Manufacturing sector, GMM
