CSR Moderation of the divestment-insolvency relationship
| Distance to default | Credit default swap spread | |||||
|---|---|---|---|---|---|---|
| DD | DD | DD | CDS | CDS | CDS | |
| Variable | model (1) | model (2) | model (3) | model (4) | model (5) | model (6) |
| FD | 0.021 (0.843) | 0.025 (0.953) | 0.042 (1.522) | −0.004 (−0.534) | −0.003 (−0.413) | −0.005 (−0.511) |
| FD × high CSR | −0.107** (−2.284) | −0.121** (−2.320) | −0.146*** (−3.339) | 0.033** (2.347) | 0.034** (2.167) | 0.037*** (2.643) |
| High CSR | 0.451** (2.248) | 0.535*** (2.593) | 0.528** (2.480) | −0.133** (−2.129) | −0.140** (−2.207) | −0.099 (−1.298) |
| Size | 0.064 (1.470) | 0.022 (0.445) | −0.458** (−2.022) | 0.022 (1.494) | 0.025 (1.487) | 0.153** (2.033) |
| ROA | 0.071*** (4.227) | 0.064*** (3.811) | 0.030** (1.983) | −0.025*** (−4.092) | −0.024*** (−3.735) | −0.011* (−1.841) |
| Leverage | −6.191*** (−8.096) | −6.852*** (−8.951) | −4.785*** (−5.820) | 1.833*** (8.317) | 1.913*** (8.039) | 1.071*** (3.408) |
| Liquidity | 0.238 (0.393) | 0.793 (0.616) | 0.142 (0.824) | −0.455 (−1.113) | ||
| Tangibility | −0.824 (−1.264) | −0.024 (−0.020) | 0.375* (1.883) | 0.310 (0.691) | ||
| Int. experience | 0.006* (1.936) | 0.003 (0.780) | −0.001 (−1.331) | 0.000 (0.100) | ||
| Constant | 3.588*** (4.511) | 4.426*** (4.820) | 7.233** (2.119) | 2.373*** (8.852) | 2.178*** (7.415) | 0.809 (0.763) |
| Observations | 278 | 277 | 277 | 278 | 277 | 635 |
| R-squared | 0.515 | 0.530 | 0.713 | 0.394 | 0.402 | 0.608 |
| Compno | 53 | 53 | 53 | 53 | 53 | 53 |
| Year FE | YES | YES | YES | YES | YES | YES |
| Firm FE | NO | NO | YES | NO | NO | YES |
| Country FE | YES | YES | YES | YES | YES | YES |
| Distance to default | Credit default swap spread | |||||
|---|---|---|---|---|---|---|
| Variable | model (1) | model (2) | model (3) | model (4) | model (5) | model (6) |
| 0.021 (0.843) | 0.025 (0.953) | 0.042 (1.522) | −0.004 (−0.534) | −0.003 (−0.413) | −0.005 (−0.511) | |
| −0.107 | −0.121 | −0.146 | 0.033 | 0.034 | 0.037 | |
| High | 0.451 | 0.535 | 0.528 | −0.133 | −0.140 | −0.099 (−1.298) |
| Size | 0.064 (1.470) | 0.022 (0.445) | −0.458 | 0.022 (1.494) | 0.025 (1.487) | 0.153 |
| 0.071 | 0.064 | 0.030 | −0.025 | −0.024 | −0.011 | |
| Leverage | −6.191 | −6.852 | −4.785 | 1.833 | 1.913 | 1.071 |
| Liquidity | 0.238 (0.393) | 0.793 (0.616) | 0.142 (0.824) | −0.455 (−1.113) | ||
| Tangibility | −0.824 (−1.264) | −0.024 (−0.020) | 0.375 | 0.310 (0.691) | ||
| Int. experience | 0.006 | 0.003 (0.780) | −0.001 (−1.331) | 0.000 (0.100) | ||
| Constant | 3.588 | 4.426 | 7.233 | 2.373 | 2.178 | 0.809 (0.763) |
| Observations | 278 | 277 | 277 | 278 | 277 | 635 |
| R-squared | 0.515 | 0.530 | 0.713 | 0.394 | 0.402 | 0.608 |
| Compno | 53 | 53 | 53 | 53 | 53 | 53 |
| Year | ||||||
| Firm | ||||||
| Country | ||||||
This table reports the regression results for the moderating role of CSR on the relationship between foreign divestment and insolvency risk. The dependent variable, Insolvency Riski,t represents One of Two alternative measures of insolvency risk: the DD or CDS spread for firm i at time t. FDi,t captures the number of foreign divestments undertaken by firm i in year t. high CSR denotes firms that fall in the top quartile based on their CSR activities. The reported adjusted R2s are the overall R2s that account for the explanatory power of the firm and year fixed effects. The t-statistics (reported in parentheses) are based on robust standard errors clustered at the firm level. ***, ** and * denote significance at the 0.01, 0.05 and 0.10 levels, respectively. The sample is restricted to firm-years with ESG data (2003–2019). Model-specific observations may differ due to additional variable inclusion and non-missing requirements (e.g. lags, controls)
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