Abstract:
This thesis examines the relationship between corporate social responsibility (CSR) and bankruptcy risk. Moreover, the research examines the mediating effects of corporate financial performance and changes in performance levels on the relationship. The results show that CSR significantly reduces the risks of going bankrupt. These results reflect the importance of the role that an organization‟s initiatives have in reducing firm‟s risk of going bankrupt. In addition, it is found that corporate performance and the changes in performance levels partially mediate the relationship between CSR and bankruptcy risk. Further research would consider a bigger sample size, other variables such as credit ratings and/or the changes in credit ratings, factors related to efficiency levels, changes in the levels of investments, and company‟s type of industry/sector.
