1. 1 8th annual doctoral student conference

2. Presented by: Mohammed Benlemlih Supervisor: Pr. Isabelle Girerd-Potin Does Corporate Social Responsibility (CSR) Affect Firm Risk? 2 8th Annual Doctoral Student Conference

3. 3 Hypotheses Previous literature Research Question 8th annual doctoral student conference Data & Methodology Study Contribution

4. 4 Definition & context Research Question Contribution of the study & agenda Previous Literature Hypotheses Data & methodology ‘‘ A socially responsible firm is one whose managerial staff balances a multiplicity of interests. Instead of striving only for larger profits for stockholders, a responsible entreprise also takes into account employees, suppliers, dealers, local communities, and the nation.’’ (Johnson, 1971) 8th annual doctoral student conference

5. (Booz & Company, 2009) 5 8th annual doctoral student conference RI : Responsible Investment AUM : Assets Under Management Definition & context Research Question Contribution of the study & agenda Previous Literature Hypotheses Data & methodology

6. Previous literature on CSR focused on relationship between social performance and financial performance 6 What is the impact of CSR on firm performance? 8th annual doctoral student conference No consensus on this relationship Positive Negative Definition & context Research Question Contribution of the study & agenda Previous Literature Hypotheses Data & methodology

7. 7 What will we do? 8th annual doctoral student conference Definition & context Research Question Contribution of the study & agenda Previous Literature Hypotheses Data & methodology

8. A new research stream to study the relationship between CSR and financial risk 8 Does corporate social responsibility affect firm risk? 8th annual doctoral student conference Definition & context Research Question Contribution of the study & agenda Previous Literature Hypotheses Data & methodology

9. 9 Orlitzky and Benjamin (2001) Meta- analysis Different measures of risk. Boutin-Dufresne and Savaria (2004) Canadian market Idiosyncratic risk Toms, Anderson, and Salama (2009) British market Systematic risk Oikonomou, Brooks, and Pavelin (2010) Systematic & downside risk American market 8th annual doctoral student conference A negative and significant relationship between CSR and financial risk Definition & context Research Question Contribution of the study & agenda Previous Literature Hypotheses Data & methodology

10. 10 8th annual doctoral student conference Stable stakeholder relations Stable stakeholder relations Customer loyalty Employee support Low risk of lawsuits Low risk of financial penalities H1: Social rating is negatively related to financial risk Definition & context Research Question Contribution of the study & agenda Previous Literature Hypotheses Data & methodology

11. 11 8th annual doctoral student conference Human ressources Human rights in workplace Environment Community involvement Business behavior Corporate governance H2: Impact of CSR on risk is better captured when using individual measures for CSR Definition & context Research Question Contribution of the study & agenda Previous Literature Hypotheses Data & methodology Dimensions of CSR are those of Vigeo Rating

12. 12 8th annual doctoral student conference H3:The negative relationship between corporate social responsibility and financial risk is stronger during times of crisis Definition & context Research Question Contribution of the study & agenda Previous Literature Hypotheses Data & methodology

13. 13 And how ?! 8th annual doctoral student conference Definition & context Research Question Contribution of the study & agenda Previous Literature Hypotheses Data & methodology

14. 14 Portfolio approach: Create responsible and non-responsible portfolios. Compare risk level in each portfolio. Regression approach: Estimate a model. Try to explain firm financial risk by CSR ratings and other variables. Two different approaches: 8th annual doctoral student conference Definition & context Research Question Contribution of the study & agenda Previous Literature Hypotheses Data & methodology

15. Sample period: 01/12/1999 to 01/01/2012 European countries CSR measures: Vigeo ratings Risk measures: Systematic & idiosyncratic risk Downside risk 15 8th annual doctoral student conference Definition & context Research Question Contribution of the study & agenda Previous Literature Hypotheses Data & methodology

16. 16 8th annual doctoral student conference Examine CSP-risk relation in European context Examine relationship via different measures of risk Uncover new pieces of the CSP-FP puzzle Definition & context Research Question Contribution of the study & Agenda Previous Literature Hypotheses Data & methodology

17. 17 8th annual doctoral student conference 06/2012 to 12/2012 Finish first study Presentation in CERAG workshop 02/2013 to 07/2013 Research stay in Edmonton (Alberta University) Second study on the cost of capital of socially responsible firms 07/2013 to 12/2013 Third study Start writing dissertation Definition & context Research Question Contribution of the study & Agenda Previous Literature Hypotheses Data & methodology

18. 18 Any questions? Thank you for your attention! 8th annual doctoral student conference Definition & context Research Question Contribution of the study Previous Literature Hypotheses Data & methodology