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Nexus Between Corporate Sustainability Reporting and Risk Mitigation: Evidence from Chinese Listed Firms
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Advisor(s)
Abstract(s)
This study examines how corporate sustainability reporting affects the corporate
risk-taking of Chinese firms based on a sample size of 5356 companies for the period 2011–
2023. We examined the overall impact of CSR on CRT, as well as the individual impact
of CSR subcomponents such as environmental (CESR), social (CSSR), and governance
(CGSR). We further examined how this relationship is affected by moderating variables
such as employees’ education and financial flexibility. We used the PCSE technique for
cross-sectional dependence and heteroscedasticity in our analysis. But to ensure robustness
and address the potential endogeneity, we used the 2SLS and two-step system GMM
dynamic panel methods. This study also checks the mechanism analysis and heterogeneity
analysis based on revenue growth and firm sizes, respectively. The results states that CSR
and its subcomponents (CESR, CSSR, and CGSR) reduce the CRT of the Chinese companies,
and this reducing impact becomes stronger when moderated by the employees’ education
and financial flexibility of the firms. These results show why sustainability reporting and
practices are important for reducing CRT. This research underscores the need for firms
to adopt sustainable corporate governance frameworks and highlights the pivotal role of
organizational factors in reinforcing the risk-reducing benefits of sustainability initiativ
Description
Keywords
corporate sustainability reporting corporate risk-taking financial flexibility employees’ education
Pedagogical Context
Citation
Haider, W.; Tunio, F.H.; Arshad, M.U.; Ferreira, P.J.S. Nexus Between Corporate Sustainability Reporting and Risk Mitigation: Evidence from Chinese Listed Firms. Sustainability 2025, 17, 1622. https:// doi.org/10.3390/su17041622