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How Do Corporate Social Responsibility and Corporate Governance Affect Stock Price Crash Risk?

1
University Institute of Management Sciences, PMAS-Arid Agriculture University Rawalpindi, Rawalpindi 46000, Pakistan
2
Finance Department, Effat University, Jedda 21478, Saudi Arabia
*
Author to whom correspondence should be addressed.
J. Risk Financial Manag. 2020, 13(2), 30; https://doi.org/10.3390/jrfm13020030
Received: 20 December 2019 / Revised: 21 January 2020 / Accepted: 4 February 2020 / Published: 7 February 2020
(This article belongs to the Special Issue Green and Sustainable Finance)
We investigate the impact of corporate social responsibility (CSR) and corporate governance on stock price crash risk in manufacturing sector 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. We further find 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. View Full-Text
Keywords: CSR; corporate governance; stock price crash risk; manufacturing sector; GMM CSR; corporate governance; stock price crash risk; manufacturing sector; GMM
MDPI and ACS Style

Hunjra, A.I.; Mehmood, R.; Tayachi, T. How Do Corporate Social Responsibility and Corporate Governance Affect Stock Price Crash Risk? J. Risk Financial Manag. 2020, 13, 30.

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