Zhang, Cheng and Ho, Kung-Cheng and Yan, Cheng and Gong, Yujing (2023) Societal Trust and Firm-level Trust: Substitute or Complement? An International Evidence. International Review of Financial Analysis, 86. p. 102543. DOI https://doi.org/10.1016/j.irfa.2023.102543
Zhang, Cheng and Ho, Kung-Cheng and Yan, Cheng and Gong, Yujing (2023) Societal Trust and Firm-level Trust: Substitute or Complement? An International Evidence. International Review of Financial Analysis, 86. p. 102543. DOI https://doi.org/10.1016/j.irfa.2023.102543
Zhang, Cheng and Ho, Kung-Cheng and Yan, Cheng and Gong, Yujing (2023) Societal Trust and Firm-level Trust: Substitute or Complement? An International Evidence. International Review of Financial Analysis, 86. p. 102543. DOI https://doi.org/10.1016/j.irfa.2023.102543
Abstract
Using an international sample of 30,060 observations for firms from 32 countries from the period of 2004-2018 and a country-level index for societal trust, we document that societal trust is negatively associated with corporate social responsibility (CSR), which is a proxy for firm-level corporate trust-building investment. Further analyses show that firms in low-trust countries tend to invest more in CSR when they are owned by large foreign shareholders originating from low-trust countries. The negative impact of societal trust on CSR is pronounced for firms located in less stable countries. Overall, our results suggest that societal trust and firm-level trust act as substitutes in terms of their impact on CSR. From the perspective of risk management, the results confirm our argument that the marginal benefits of CSR-as-insurance are more crucial for firms located in low-trust countries.
Item Type: | Article |
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Uncontrolled Keywords: | Societal trust; CSR; Social capital; Risk management |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Essex Business School |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 05 Feb 2023 21:30 |
Last Modified: | 27 Jul 2024 01:00 |
URI: | http://repository.essex.ac.uk/id/eprint/34729 |
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Filename: societal trust and firmlevel trust substitute or complement an international evidence.pdf
Licence: Creative Commons: Attribution-Noncommercial-No Derivative Works 4.0