Corporate Social Responsibility and Firm Risk: Evidence from France

What is it about?

This chapter aims to analyze the role played by Corporate Social Responsibility (CSR) in reducing firm risk. We investigate the relationship between Corporate Social Responsibility and global risk using panel data of listed French companies (SBF120) over the period 2008 -2017. We applied a fixed effect estimation that allows us to consider the time and firm unobserved heterogeneity using the aggregate environmental, social and governance (ESG) scores as a CSR proxy. Our findings are in line with the signaling theory, stakeholder theory and legitimacy theory suggesting that CSR initiatives would be a mechanism for enhancing corporate reputation and sound depiction, which affects in return firm’s global risk.

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