Idiosyncratic Risk and Disclosure of Corporate Social Responsibility: Emphasizing the Role of Corporate Governance

Advances in Mathematical Finance and Applications

مقاله 7، دوره 6، شماره 1، فروردین 2021، صفحه 95-117   

نوع مقاله: Research Paper

شناسه دیجیتال (DOI): 10.22034/amfa.2020.1878505.1293

نویسندگان

Khatereh Kargarpour¹؛ Vali Khodadadi^{* 1، 2}؛ Alireza Jorjorzadeh³؛ Allah Karam Salehi⁴؛ Ahmad Kaab Omeir¹

¹Department of Accounting, Ahvaz Branch, Islamic Azad University, Ahvaz, Iran

²Department of Economic and Social Science, Shahid Chamran University, Ahvaz, Iran

³Department of Economics, Ahvaz Branch, Islamic Azad University, Ahvaz, Iran

⁴Department of Accounting, Masjed-soleiman Branch, Islamic Azad University, Masjed-soleiman, Iran

چکیده

In this study, the impact of corporate social responsibility (CSR ) disclosure on idiosyncratic risk has been investigated concerning three stakeholder theory, information asymmetry, and risk management. It also goes further and explores the impact of some corporate governance mechanisms such as ownership structure, board characteristics, and incentive contracts on this relationship. To achieve the research objectives, 142 companies from Tehran Stock Exchange were selected through the systematic elimination method from 2010 through 2018 and the research hypotheses were tested using a combined data regression model with an integrated approach. The results show that CSR disclosure; by increasing transparency, reducing uncertainty, stakeholder satisfaction, and positive market signaling; reduces idiosyncratic risk. It was also found that the ownership concentration and managers’ remuneration by reducing CSR reporting lead to increased idiosyncratic risk, but government ownership, the duality of the CEO’s duties, the independence of the board of directors and the managers' equity decrease the corporate idiosyncratic risk by increasing CSR reporting. However, the effect of managers' remunerations and state ownership on the relationship between CSR reporting and corporate idiosyncratic risk was not confirmed at the 95% confidence level. Overall, from a theoretical viewpoint, a good corporate governance system can improve the quality of CSR, thereby improving corporate social reputation and reducing corporate idiosyncratic risk.

کلیدواژه‌ها

Disclosure of CSR Information؛ Idiosyncratic Risk؛ Ownership Structure؛ Board Characteristics؛ Incentive Contracts

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