Test of Corporate social responsibility engagement Based on two approaches to the Exchange Capital and the moral Capital of bankruptcy likelihood

Subject Areas : Management Accounting

Anahita  Zandi ¹ (Department of Accounting, College of Human Science, Semnan Branch, Islamic Azad University, Semnan, Iran)
Khosro  Faghani Makrani ² (Associate Professor, Department of Accounting sari Unit, Islamic Azad University sari, Iran)
Naghi  Fazeli ³ (Assistant Professor, Department of Accounting semnan Unit, Islamic Azad University semnan, Iran)

Received: 2018-10-05 Accepted : 2019-03-01 Published : 2019-12-22

Keywords: Corporate social responsibilit, bankruptcy likelihood, exchange capital, moral capital,

Abstract :

This study examines the relationship between Corporate social responsibility engagement and their bankruptcy likelihood using annual reports of companies admitted to the Tehran Stock Exchange during the period of 2011-2017. To test the hypotheses of the study, multivariate linear regression based on Panel data is being used. Extant literature suggests that corporate social responsibility (CSR) accrues social capitals that buffers business risk. In this research, it was shown by documentary evidence that companies with a history of CSR engagement are less likely to file a bankruptcy on their behalf. Moreover, the social capital provided by the company's social responsibility was divided into moral capital and exchange capital. The results indicate that there is a negative and significant relationship between exchange capital and the probability of bankruptcy, and there is a negative, but statistically non-dominant relationship between moral capital and the probability of bankruptcy. as a result the effect of CSR engagement on bankruptcy likelihood primarily stems from the exchange capital, rather than moral capital

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