Corporate social responsibility, market business environment and stock price crash Risk: An analysis from the perspective of stakeholders

This study examines the impact of corporate social responsibility (CSR) on stock price crash risk using panel data of Chinese A-share listed companies from 2010 to 2021. Employing fixed effects panel regressions and heterogeneity analyses, we find that higher CSR engagement significantly increases firms’ exposure to crash risk. Mechanism analysis reveals that a favorable local business environment mitigates this positive association by enhancing transparency and governance. Moreover, the effect is more pronounced among profitable firms and those located in central and eastern regions, reflecting variations in institutional and market conditions. These findings advance the literature by uncovering the dual role of CSR—as both a potential source of information asymmetry and a governance signal—and offer important implications for policymakers and corporate leaders seeking to balance ethical practices with financial stability.