This study examines the impact of earnings quality on the association between corporate social responsibility and firm’s risk in firms involved in controversial activities. Based on a US sample over the 2004–2008 period, we find that involvement in controversial issues increases risk of firms despite their engagement in social responsibility activities. Additionally, we find that firms involved in controversial activities that manage their earnings upward, increase levels of risk, no matter if they engage in social responsible actions or not.
All Science Journal Classification (ASJC) codes
- Economics and Econometrics