The Relationship between Corporate Social Responsibility and Corporate Idiosyncratic Risk: Evidence from Taiwan Listed Companies

• Main Authors: LIU,CHUN-HUNG, 劉駿紘
• Other Authors: WU,CHEN-HUI
• Format: Others
• Language: zh-TW
• Published: 2019
• Online Access: http://ndltd.ncl.edu.tw/handle/9xd5eb

碩士 === 國立中正大學 === 會計與資訊科技研究所 === 108 === The majority of studies examine the relationship between corporate social responsibility and corporate performance, however, an investigation from the perspective of corporate risk remains limited. Corporate risk can be divided into market risk and idiosyncratic risk, in which market risk represents the overall risks in the market that cannot be diversified. On the other hand, the idiosyncratic risk is an inherent risk associated with a firm that is diversifiable. Using a dataset from 2015 to 2017 of Taiwanese listed companies, this study examines the relationship between corporate social responsibility and firm idiosyncratic risk. To deal with the possible endogenous problem, this study employs two-stage least squares and instrumental variable methods to address such an endogeneity problem. The empirical results of this study show that there is a significant negative association between corporate social responsibility and idiosyncratic risk, indicating that the more a firm involved in corporate social responsibility, the lower the idiosyncratic risk is. Thus, the empirical findings enable external investors to make investment decisions based on the degree of a firm’s engagement on corporate social responsibility activities as a basis of judgment.