Beschreibung:
This paper explores whether and how corporate social responsibility behavior affects firm value in highly distressed firms. Our results show that sustainability activity is a powerful instrument by which to strategically prevent damage to the company in the form of liquidation risk. Stronger sustainability performance increases distress resolution potential, shedding light on the motive for sustainability-related engagement in distressed firms. Our results also indicate that while deteriorated credit risk approaching the filing is associated with improvements in social responsibility performance, managers should efficiently utilize financial resources in non-profit activity. Management ability to increase strength attributes in product quality or reduce disputes in environmental and employee issues is related to favorable restructuring outcomes