Corporate social responsibility as an insurance-like asset: The new evidence from firm-specific product market threats

Corporate social responsibility (CSR) has long been recognized as an “insurance-like” asset that protects firms from external risks. In business relationships, CSR serves as a valuable asset that strengthens trust and fosters long-term partnerships with customers, suppliers, and stakeholders. However, there is still limited knowledge about how CSR impacts firm-specific product market threats that are tied to a firm's idiosyncratic competitive space. This type of threat is fundamentally different from the traditional concept of competition, which is typically based on aggregate industry classifications. Therefore, the link between CSR and product market threats genuinely demonstrates its safeguarding nature for firm success. We collect a large sample and employ a series of robust methods to investigate this relationship. Furthermore, we enrich our understanding by examining the moderating effects of firm business architecture variables, including related and unrelated diversification, vertical integration, organizational breadth, geographical diversification, and service intensity. The empirical results show that CSR plays a significant role in reducing product market threats, and this effect is stronger when firms lack protection from their business architectures.