@article{341047adf79d4338b08577d05b2ad169,
title = "Golden geese or black sheep: Are stakeholders the saviors or saboteurs of financial distress?",
abstract = "Is stakeholder management crucial for financial distress? Unlike the prior literature that shows the mitigating influence of corporate social responsibility (CSR) on distress risk, we find that social stakeholder initiatives can increase the likelihood of future financial distress. Using a quasi-experiment, we find that this relationship is likely to be causal. We further show that managerial focus and financial constraints are two possible channels through which the social dimension could impact distress. Investors should hence view firms{\textquoteright} CSR investments with caution.",
keywords = "CSR, Corporate governance, ESG, Financial distress, Firm survival, Social performance",
author = "Ariadna Dumitrescu and {El Hefnawy}, Menatalla and Mohammed Zakriya",
note = "Funding Information: We appreciate the financial support from the Government of Spain (grants PR2015-00645 and FEDER/MICIUAEI/PGC2018-098670-B-100), the Government of Catalonia (grants 2017-SGR-640, 2018-FI_B2-00134 and 2019-FI_B2-00163), the European Social Fund and the “Secretaria d{\textquoteright}Universitats i Recerca del Departament d{\textquoteright}Economia i Coneixement de la Generalitat de Catalunya”, Banc Sabadell, and La Caixa Foundation. This research was partially undertaken while Ariadna Dumitrescu was visiting the University of Maryland, for which she is very grateful. Funding Information: We appreciate the financial support from the Government of Spain (grants PR2015-00645 and FEDER/MICIUAEI/PGC2018-098670-B-100), the Government of Catalonia (grants 2017-SGR-640, 2018-FI_B2-00134 and 2019-FI_B2-00163), the European Social Fund and the ?Secretaria d'Universitats i Recerca del Departament d'Economia i Coneixement de la Generalitat de Catalunya?, Banc Sabadell, and La Caixa Foundation. This research was partially undertaken while Ariadna Dumitrescu was visiting the University of Maryland, for which she is very grateful. Publisher Copyright: {\textcopyright} 2019",
year = "2020",
month = nov,
doi = "10.1016/j.frl.2019.101371",
language = "English",
volume = "37",
journal = "Finance Research Letters",
issn = "1544-6123",
publisher = "Elsevier BV",
}
