Does being socially good save firms from bankruptcy? A systematic literature review and bibliometric analysis


Default Risk
Corporate Social Responsibility
Systematic Literature Review
Bibliometric Analysis

How to Cite

Mushafiq, M., & Prusak, B. (2023). Does being socially good save firms from bankruptcy? A systematic literature review and bibliometric analysis. Ekonomia I Środowisko - Economics and Environment, 83(4), 35–59.


 The purpose of the review was to find out, does being responsible saves firms from bankruptcy? What is the relationship between corporate social responsibility and default risk? What methods and measures are used in the literature to evaluate this relationship? And what is the theoretical underpinning of the studies? Moreover, to explore what are the gaps for future work, Web of Science and Scopus databases were utilised to obtain the relevant articles for review. A total of 24 articles were reviewed using PRISMA systematic literature review and bibliometrics. This review finds that the literature has an unidirectional inverse relationship between corporate social responsibility and default risk. Moreover, most literature utilises the stakeholder perspective as the theoretical framework.
A  research gap exists in explaining the relationship between different theories and extending the model with various aspects of macro- and micro-economics as well as finance. This article contributes to the theoretical aspect by classifying methods, proxies, and theoretical underpinnings used in the research for corporate social responsibility and default risk.


Al-Hadi, A., Chatterjee, B., Yaftian, A., Taylor, G., & Monzur Hasan, M. (2019). Corporate social responsibility performance, financial distress and firm life cycle: evidence from Australia. Accounting & Finance, 59(2), 961-989.

Altman, E. I. (1968). Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy. The Journal of Finance, 23(4), 589-609.

Badayi, S. A., Matemilola, B. T., Bany-Ariffin, A. N., & Wei Theng, L. (2021). Does corporate social responsibility influence firm probability of default? International Journal of Finance & Economics, 26(3), 3377-3395.

Boubaker, S., Cellier, A., Manita, R., & Saeed, A. (2020). Does corporate social responsibility reduce financial distress risk? Economic Modelling, 91, 835-851.

Breitenstein, M., Nguyen, D. K., & Walther, T. (2021). Environmental Hazards and Risk Management in the Financial Sector: A Systematic Literature Review. Journal of Economic Surveys, 35(2), 512-538.

Chang, T. C., Yan, Y. C., & Chou, L. C. (2013). Is default probability associated with corporate social responsibility? Asia-Pacific Journal of Accounting & Economics, 20(4), 457-472.

Do, T. K. (2022). Corporate social responsibility and default risk: International evidence. Finance Research Letters, 44.

Dumitrescu, A., El Hefnawy, M., & Zakriya, M. (2020). Golden geese or black sheep: Are stakeholders the saviors or saboteurs of financial distress? Finance Research Letters, 37.

El Ghoul, S., Guedhami, O., Kwok, C. C. Y., & Mishra, D. R. (2011). Does corporate social responsibility affect the cost of capital? Journal of Banking & Finance, 35(9), 2388-2406.

Farooq, M., & Noor, A. (2021). The impact of corporate social responsibility on financial distress: evidence from developing economy. Pacific Accounting Review, 33(3), 376-396.

Freeman, R. E. (1984). Strategic management: A stakeholder approach. Cambridge University Press.

Galant, A., & Cadez, S. (2017). Corporate social responsibility and financial performance relationship: a review of measurement approaches. Economic Research – Ekonomska Istraživanja, 30(1), 676-693.

Gangi, F., Meles, A., Monferrà, S., & Mustilli, M. (2020). Does corporate social responsibility help the survivorship of SMEs and large firms? Global Finance Journal, 43.

Godfrey, P. C., Merrill, C. B., & Hansen, J. M. (2009). The relationship between corporate social responsibility and shareholder value: an empirical test of the risk management hypothesis. Strategic Management Journal, 30(4), 425-445.

Habermann, F., & Fischer, F. B. (2021). Corporate Social Performance and the Likelihood of Bankruptcy: Evidence from a Period of Economic Upswing. Journal of Business Ethics, 1, 1-17.

Habib, A., & Hasan, M. M. (2016). Corporate Social Responsibility and Cost Stickiness. Business & Society, 58(3), 453-492.

Hart, S. L. (1995). A Natural-Resource-Based View of the Firm. Academy of Management Review, 20(4), 17-45.

Hjørland, B. (2013). Citation analysis: A social and dynamic approach to knowledge organization. Information Processing & Management, 49(6), 1313-1325.

Honohan, P., & Beck, T. (2007). Making Finance Work for Africa. World Bank Publications.

Hsu, F. J., & Chen, S. H. (2021). US quantitative easing and firm’s default risk: The role of Corporate Social Responsibility (CSR). The Quarterly Review of Economics and Finance, 80, 650-664.

Hsu, F. J., & Chen, Y. C. (2015). Is a firm’s financial risk associated with corporate social responsibility? Management Decision, 53(9), 2175-2199.

Jacobs, B. W., Kraude, R., & Narayanan, S. (2016). Operational Productivity, Corporate Social Performance, Financial Performance, and Risk in Manufacturing Firms. Production and Operations Management, 25(12), 2065-2085.

Jo, H., & Na, H. (2012). Does CSR Reduce Firm Risk? Evidence from Controversial Industry Sectors. Journal of Business Ethics, 110(4), 441-456.

Jones, T. M. (1995). INSTRUMENTAL STAKEHOLDER THEORY: A SYNTHESIS OF ETHICS AND ECONOMICS. Academy of Management Review, 20(2), 404-437.

Kamalirezaei, H., Anvary Rostamy, A. A., Saeedi, A., & Khodaei Valeh Zaghard, M. (2020). Corporate social responsibility and bankruptcy probability: Exploring the role of market competition, intellectual capital, and equity cost. Journal of Corporate Accounting & Finance, 31(1), 53-63.

Kessler, M. M. (1963). Bibliographic coupling between scientific papers. American Documentation, 14(1), 10-25.

Kim, D. Y., & Kim, J. (2014). Effects of corporate social responsibility and governance on its credit ratings. Scientific World Journal, 2014.

Kölbel, J. F., & Busch, T. (2021). Signalling legitimacy across institutional contexts. The intermediary role of corporate social responsibility rating agencies. Global Strategy Journal, 11(2), 304-328.

Korschun, D., Bhattacharya, C. B., & Sen, S. (2009). Using Corporate Social Responsibility to Strengthen Employee and Customer Relationships. Asia-Pacific Advances in Consumer Research, 8, 64-66.

Lin, K. C., & Dong, X. (2018). Corporate social responsibility engagement of financially distressed firms and their bankruptcy likelihood. Advances in Accounting, 43, 32-45.

Martyn, J. (1964). Bibliographic coupling. Journal of Documentation, 20(4), 236.

McWilliams, A., & Siegel, D. (2001). Corporate Social Responsibility: a Theory of the Firm Perspective. Academy of Management Review, 26(1), 117-127.

Melitz, M. J. (2003). The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity. Econometrica, 71(6), 1695-1725.

Mushafiq, M. (2021). Industry-level analysis of COVID-19’s impact in emerging markets – evidence from Pakistan. International Journal of Emerging Markets, ahead-of-print(ahead-of-print).

Mushafiq, M., Sami, S. A., Sohail, M. K., & Sindhu, M. I. (2022). Merton-type default risk and financial performance: the dynamic panel moderation of firm size. Journal of Economic and Administrative Sciences, ahead-of-print(ahead-of-print).

Mushafiq, M., Sindhu, M. I., & Sohail, M. K. (2021). Financial performance under influence of credit risk in non-financial firms: evidence from Pakistan. Journal of Economic and Administrative Sciences, ahead-of-print(ahead-of-print).

Neitzert, F., & Petras, M. (2022). Corporate social responsibility and bank risk. Journal of Business Economics, 92(3), 397-428.

Nguyen, L. T., & Nguyen, K. V. (2021). The impact of corporate social responsibility on the risk of commercial banks with different levels of financial constraint. Asia-Pacific Journal of Business Administration, 13(1), 98-116.

Page, M. J., McKenzie, J. E., Bossuyt, P. M., Boutron, I., Hoffmann, T. C., Mulrow, C. D., Shamseer, L., Tetzlaff, J. M., Akl, E. A., Brennan, S. E., Chou, R., Glanville, J., Grimshaw, J. M., Hróbjartsson, A., Lalu, M. M., Li, T., Loder, E. W., Mayo-Wilson, E., McDonald, S., McGuinness, L. A., Stewart, L. A., Thomas, J., Tricco, A. C., Welch, V. A., Whiting, P., & Moher, D. (2021). The PRISMA 2020 statement: an updated guideline for reporting systematic reviews. Systematic Reviews, 10(1), 1-11.

Park, B. J., & Lee, K. H. (2020). The sensitivity of corporate social performance to corporate financial performance: A “time-based” agency theory perspective. Australian Journal of Management,46(2), 224-247.

Parmar, B. L., Freeman, R. E., Harrison, J. S., Wicks, A. C., Purnell, L., & de Colle, S. (2010). Stakeholder Theory: The State of the Art. Academy of Management Annals, 4(1), 403-445.

Russo, M. V., & Fouts, P. A. (1997). A resource-based perspective on corporate environmental performance and profitability. Academy of Management Journal, 40(3), 534-559.

Saidane, D., & Abdallah, S. B. (2021). African firm default risk and CSR. Finance Research Letters, 43.

Scholtens, B., & van’t Klooster, S. (2019). Sustainability and bank risk. Palgrave Communications 5, 105, 1-8.

Shahab, Y., Ntim, C. G., & Ullah, F. (2019). The brighter side of being socially responsible: CSR ratings and financial distress among Chinese state and non-state owned firms. Applied Economics Letters, 26(3), 180-186.

Shahab, Y., Ntim, C. G., Chengang, Y., Ullah, F., & Fosu, S. (2018). Environmental policy, environmental performance, and financial distress in China: Do top management team characteristics matter? Business Strategy and the Environment, 27(8), 1635-1652.

Shahrour, M. H., Girerd-Potin, I., & Taramasco, O. (2021). Corporate social responsibility and firm default risk in the Eurozone: a market-based approach. Managerial Finance, 47(7), 975-997.

Shih, Y. C., Wang, Y., Zhong, R., & Ma, Y. M. (2021). Corporate environmental responsibility and default risk: Evidence from China. Pacific-Basin Finance Journal, 68.

Small, H. (1973). Co-citation in the scientific literature: A new measure of the relationship between two documents. Journal of the American Society for Information Science, 24(4), 265-269.

Sun, W., & Cui, K. (2014). Linking corporate social responsibility to firm default risk. European Management Journal, 32(2), 275-287. 2013.04.003

van Eck, N. J., & Waltman, L. (2010). Software survey: VOSviewer, a computer program for bibliometric mapping. Scientometrics, 84(2), 523-538.

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Copyright (c) 2023 Ekonomia i Środowisko - Economics and Environment


Download data is not yet available.