Exploring corporate social responsibility and firm risk relationship : insights from literature analysis | |
| Author | Aphichai Pholkosol |
| Subject(s) | Social responsibility of business Sustainable development |
| Note | Special study submitted in partial fulfillment of the requirements for the Degree of Doctor of Business Administration |
| Publisher | Asian Institute of Technology |
| Series Statement | This Special Study was later published as a book chapter: Pholkosol, A., & Endress, T. (2026). The ESG Compass: Frameworks, Benchmarks, and Best Practices. In T. Endress (Ed.), Digital Project Practice for Green Finance and ESG Innovation (pp. 1–26). CRC Press. |
| Abstract | Sustainable business practices have become relevant in the agendas of corporate stakeholders, policymakers, investors, and society. However, the transition to a more sustainable economic system is not without risks. This study investigates the relationship between corporate social responsibility (CSR) and firm risk by analyzing the evolution of CSR concepts and definitions, the formalization of environmental, social, and governance (ESG), the relevant theories concerning the CSR-risk relationship supported by empirical evidence, and possible research gaps.The study reviews relevant theories, including stakeholder, legitimacy, and agency theory, to comprehensively understand CSR’s diverse effects on firm risk. The literature presents mixed empirical findings. Some studies indicate that CSR activities can reduce firm risk by improving transparency, enhancing risk management, and creating value, aligning with stakeholder and legitimacy theories. However, others suggest that overinvestment in CSR by managerial self-interest can increase firm risk. This differing theoretical perspective highlights the complexity of CSR’s impact on firm risk depending on the context and management practices. Moreover, the growing anti-ESG sentiment, which questions the financial rationale and ideological foundations of sustainability initiatives, has caused further debate over whether CSR effectively mitigates firm risk or merely adds unnecessary costs.The study identifies gaps in the current research, particularly the limited evidence from emerging markets, the need for sector-specific analyses, and a deeper exploration of individual ESG pillars to fully grasp their distinct effects on firm risk. These gaps hinder a comprehensive understanding of the CSR-risk relationship. Addressing them will be a key focus of the Advancement to Candidacy report, which is essential for gaining more comprehensive insights into the CSR-risk dynamics. |
| Year | 2024 |
| Type | Special Study Report (SSR) |
| School | School of Management |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Doctor of Philosophy in Business Administration (Publication code = DBA-SM, SM) |
| Chairperson(s) | Endress, Tobias,; |
| Examination Committee(s) | French, Joseph J.;Santoso, Djoen San; |