(1) Tecnológico de Monterrey Instituto de Empresa, ITESM/EGADE, Ave. Eugenio Garza Sada 2501 Sur, Col. Tecnológico, C.P. 64849 Monterrey, N.L., MÉXICO
Abstract:
The relationship of corporate social responsibility to risk management has been treated sporadically in the business society literature. Using real options theory, I develop the notion of corporate social responsibility as a real option its implications for risk management. Real options theory allows for a strategic view of corporate social responsibility. Specifically, real options theory suggests that corporate social responsibility should be negatively related to the firm’s ex ante downside business risk.