| Does R&D spending respond to CSR? Evidence from Chinese manufacturers based on a perspective of idiosyncratic risk |
Received:October 16, 2017 Revised:October 16, 2017 |
Key Words: Corporate Social Responsibility; R&D Spending; Firm-idiosyncratic Risk; Government Ownership |
| Author Name | Affiliation | | Dong Huo* | Nanjing University | | Yixue Wu | Nanjing University |
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Abstract: |
| How R&D spending responds to corporate social responsibility (CSR) performance is an unexplored research question in the literature. This study answers this question by proposing a perspective with respect to firm-idiosyncratic risk on equity market. A longitudinal analysis of 1,392 Chinese manufacturing firms listed on stock exchanges from 2011 to 2014 demonstrate that R&D spending is associated with the decreased rating on a firm’s CSR committed to society, and that an increased idiosyncratic risk on equity market mediates the negative effect of CSR on R&D. In addition, our study also finds that government ownership moderates the relationship between CSR performance and idiosyncratic risk: their positive association is stronger for state-owned enterprises (SOEs). Theoretical and practical implications of our findings are discussed. |
