Insurance Function for Performance of Corporate Social Responsibility

• Main Authors: Hong,Hao-Yu, 洪皓俞
• Other Authors: 張元
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/z35jh4

碩士 === 國立彰化師範大學 === 財務金融技術學系 === 106 === Corporate Social Responsibility (CSR) is now considered as an ethic business concept and conduct on a voluntary basis in today's society. A corporation is not only responsible for the shareholders, but also responsible for all stakeholders. However, as corporate’s resource is invested in social responsible activities, how the cost outweighs the benefit on performance/risk is uncertain. Existing research has explored the relationship between CSR and performance and risk, but the results of those study are divergent. This master thesis takes the role of CSR as insurance for firm performance during negative events, namely, examines "when" CSR has effects on corporate performance and risk, which is different from the previous research. The insurance function of CSR means that as firm’s accumulating reputation through engaging in CSR, firm’s harm by negative events is mitigated or less affected. The research collected the data of 1,484 nonfinancial listed companies on Taiwan Stock Exchange and Taipei Exchange Market from 2005 to 2015. Empirical result shows that the firm performance and value indeed fell down as the overall negative events (economic depression) and individual negative events (bad business or business scandals) occurred. Firm risk increases as well. Interestingly, if the company's performance on CSR is better, the company is less affected by the negative events, that is, the cumulative reputation of the corporate social responsibility mitigates the decline of corporate performance and value and the increase of risk. The empirical results in this research confirm the insurance function of CSR on company's performance and risk.