Can CSR reduce stock price crash risk? Evidence from China's energy industry

Chia Ming Wu, Jin-Li Hu*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

12 Scopus citations


This study explores the effect of CSR on reducing a firm's stock price crash risk in China's energy industry by using a regression model and further investigates the effect of items within CSR (e.g., corporate governance and environment protection) on reducing said risk to find which item is important for CSR for the energy industry. Covering a total of 100 energy firms including electricity generation and mining from 2014 to 2016, this study observes that CSR significantly affects stock price crash risk in the energy industry, as employee protection, environmental protection, product quality control, consumers’ right protection, and supply chain partners all significantly reduce an energy firm's stock price crash risk. We also employ the industry as our moderator to test whether different sub-industries have varying correlations between CSR and stock price crash risk, finding that the electricity generation firms with higher CSR scores especially in environmental protection, promoting technology innovation, and corporate image have significantly lower stock price crash risk, while the mining firms do not. These results suggest that compared to other CSR items, investors should pay more attention on pollution improvement and trading provisions that decrease this risk more effectively, especially in the electricity generation industry.

Original languageEnglish
Pages (from-to)505-518
Number of pages14
JournalEnergy Policy
StatePublished - 1 May 2019


  • Corporate social responsibility (CSR)
  • Energy industry
  • Information asymmetry
  • Signaling theory
  • Stock price crash risk

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