Version 1
: Received: 26 January 2024 / Approved: 28 January 2024 / Online: 29 January 2024 (04:10:04 CET)
How to cite:
Li, J.; Park, S. B. The Relationship between Economic Policy Uncertainty and Firm Value by CSR Activities. Preprints2024, 2024011950. https://doi.org/10.20944/preprints202401.1950.v1
Li, J.; Park, S. B. The Relationship between Economic Policy Uncertainty and Firm Value by CSR Activities. Preprints 2024, 2024011950. https://doi.org/10.20944/preprints202401.1950.v1
Li, J.; Park, S. B. The Relationship between Economic Policy Uncertainty and Firm Value by CSR Activities. Preprints2024, 2024011950. https://doi.org/10.20944/preprints202401.1950.v1
APA Style
Li, J., & Park, S. B. (2024). The Relationship between Economic Policy Uncertainty and Firm Value by CSR Activities. Preprints. https://doi.org/10.20944/preprints202401.1950.v1
Chicago/Turabian Style
Li, J. and Sam Bock Park. 2024 "The Relationship between Economic Policy Uncertainty and Firm Value by CSR Activities" Preprints. https://doi.org/10.20944/preprints202401.1950.v1
Abstract
This study analyzes the relationship between economic policy uncertainty (hereinafter EPU) and corporate value, and verifies the differential effects of EPU on corporate value according to corporate social responsibility (hereinafter CSR) activities. The study period was from 2010 to 2020, and the EPU indexes measured by Baker et al. (2016)'s method and Hexun's CSR scores for companies listed on the Chinese stock market were used. Hexun is one of the three major evaluation agencies in China, and the CSR scores evaluated by this agency have been widely used in previous studies as a representative indicator of Chinese companies' CSR performance. The results of this study are as follows. First, EPU and corporate value were found to have a negative (-) relationship. Second, active CSR activities relieved the negative (-) relationship between EPU and corporate value. Finally, companies were divided into groups according to CSR activity scores to analyze the relationship and according to the result, the negative (-) relationship between EPU and corporate value was greater in the groups with low CSR activity scores than in the groups with high CSR activity scores. A lag model was applied to control endogeneity, and the results were consistent with the main results above. Previous studies have mainly focused on microscopic factors to investigate factors affecting corporate value. This study focused on macroeconomic policies and paid attention to the effects of changes in the macroenvironment caused by economic policy uncertainty on corporate value. In addition, this study is meaningful in that it expanded previous studies related to CSR activities by confirming that active CSR activities can be an advantageous tool for overcoming EPU.
Keywords
economic policy uncertainty (EPU); corporate social responsibility (CSR); firm value
Subject
Business, Economics and Management, Accounting and Taxation
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
