Is Corporate Social Responsibility a Stock Price Stabilizer During the COVID-19 Crisis in China? An Integrated View of Government Response

The COVID-19 crisis has brought about unprecedented government actions around the world. Given the background of rigorous government epidemic controls, how firms respond to COVID-19 is still underexplored. Integrated with the government response view, we examine whether CSR can act as a stock price stabilizer for companies from China by splitting the stock price fluctuations into two phases—CSR price insurance, which decreased the pandemic shock on stock prices during the outbreak of COVID-19, and CSR price recovery, which helps stock prices rebound faster during the postcrisis phase. Our empirical results confirm the stabilizer role of CSR during COVID19 and that effective government response can strengthen such effect. Furthermore, we examine the different aspects of the government’s response, the subdimension of CSR, and the impact of multiple waves of COVID-19. Our study provides empirical evidence on the topic of CSR and the government’s response to COVID-19 in the emerging context