Corporate Social Responsibility And Corporate Performance During Crisis Shocks

The COVID-19 had not only threatened human health but also brought profound impact on global financial markets.Behind the crisis lies the lack of investors’ confidence,however,trust plays an important role in the proper functioning of the market.As a moral requirement for companies to maintain stakeholders’ interests and promote social progress,Corporate social responsibility(CSR)can enhance corporate performance and foster economic stability by restoring investors’ trust in companies.This article firstly analyzes the literature on the connotation,measurement methods,and empirical research of CSR in domestic and foreign contexts.This enables a clear understanding of the current state of the field and the research direction taken in this study.Secondly,theoretical hypotheses are formulated based on stakeholder theory,signal theory,and asymmetric information theory.Then,the article examines the association between CSR and corporate performance in two different crises.Finally,the article draws empirical conclusions and proposes recommendations.In this study,the 2015 stock market crash and the 2020 pandemic are chosen as two crises,and a sample of listed companies on the Shanghai and Shenzhen Stock Exchanges is selected for analysis.Event study and OLS regression are employed to examine the influence of CSR on corporate performance under these different crises.The study firstly found that during the 2015 stock market crash,the level of CSR had no significant impact on corporate performance;However,the level of CSR had a significant impact on corporate performance during the 2020 pandemic.This means that under the impact of the pandemic,CSR can improve corporate performance by boosting investors’ confidence.However,under the impact of the stock market crisis,the transmission effect of trust does not exist.Secondly,the willingness of companies to disclose CSR can affect the role of CSR on corporate performance during the COVID-19 crisis.Specifically,the CSR voluntarily disclosed by companies was found to significantly impact corporate performance during the COVID-19 crisis,but the effect is not significant among companies that are required to disclose CSR.Thirdly,the level of trust in the region where the company is located can affect the role of CSR on corporate performance during the COVID-19 crisis.Specifically,the CSR level possessed by companies located in regions with high levels of trust significantly affects corporate performance,but the effect is not significant among companies located in regions with low levels of trust.The research contribution of this article is that introducing exogenous crisis shocks to provide a naturally favorable environment for clarifying the causal relationship between CSR and corporate performance.Through comparative analysis of two crisis events,this article verifies the insurance role of CSR during the COVID-19 crisis,clarifies the impact mechanism of CSR on corporate performance during crises,and enriches the related research on CSR and corporate performance.In addition,this article provides important insights for the government to make decisions on CSR disclosure by further analyzing the willingness to disclose and the level of regional trust.