US–China Trade War and Corporate Social Responsibility : Evidence from China

This study investigates the effect of trade tariff shock on corporate social responsibility (CSR). Firms increase CSR activities in response to the 2018–2019 shock of the US–China trade war. Results are robust when using alternative control groups and excluding firms that experienced changes in their main business. We further examine the economic consequences of CSR and find that CSR during the trade war leads to an increase in sales, public attention, and firm value and a decrease in stock price crash risk. Finally, we document that the positive relationship between the trade war and CSR is pronounced in non-state-owned enterprises, firms with low level of financial constraints, and firms located in regions with high level of marketization and low level of social trust