Corporate Social Responsibility, Resource Curse and Crash Risk: New Evidence From International Stock Markets

ABSTRACT This study investigates the relationship between corporate social responsibility (CSR) and stock price crash risk in the context of the resource curse. We find that CSR mitigates stock price crash risk. Based on institutional theory, stakeholder theory and agency theory, using a large firm‐level panel dataset spanning 52 countries, we find that CSR generally mitigates stock price crash risk. What's more, resource dependence negatively moderates this relationship, weakening CSR's risk‐mitigating effect. Further analysis of resource‐dependent developing countries reveals that CSR is associated with higher crash risk in environments characterised by poor institutional quality and high corruption. Our results highlight the critical role of institutional quality and corruption control in enabling CSR to fulfil its risk‐reducing potential in resource‐dependent economies.