Previous studies on the relationship between corporate social responsibility (CSR) and firm value generally belong to one of the two opposing schools of thought: the social impact hypothesis and the shift of focus hypothesis. This study, however, proposes that the relationship between CSR and company value is non-linear and neither wholly positive nor negative. We employed the corporate social responsibility index (CRSI) to test this hypothesis. The panel smooth transition regression (PSTR) model was used to analyse listed Taiwanese firms from 2010 to 2012 and calculate the value transition threshold of CSR, using CSRI as the transition variable. We then applied PSTR to determine whether CSRI shows a two-regime, non-linear relationship, as inferred by our model. Empirical findings show that the threshold value of CSRI is 13.082, thus, we concluded that investment in CSR does not contribute to enhancing company value until it exceeds the value transition threshold.

This study explored the influence of corporate social responsibility (CSR) on idiosyncratic risk. Referring to an approach used by Pagan and Sossounov, we separated the sample period into up-market, down-market, and correction conditions and observed the changes in the influence of CSR on idiosyncratic risk in different market states. The results find that firms with better CSR performance can reduce their idiosyncratic risk. Furthermore, in different market states, CSR can significantly decrease idiosyncratic risk, whereas firms with poorer CSR performance have more idiosyncratic risk. Our findings are beneficial for firms that can use CSR engagement to adjust their business strategy and reduce operational uncertainty. Therefore, CSR engagement can function as a tool for risk management. engagement positively influences consumer preferences, leading to increased sales. Guenster et al. (2011) confirmed that investors prefer to invest in companies with good CSR performance. In addition, Duran and Bajo (2014) pointed out that over 80% of multinational enterprises have listed CSR as one of their global management strategies. Marti et al. (2015) conducted research into the relationship between CSR and financial performance during periods of financial crisis. They discovered that those companies with higher levels of CSR engagement exhibited more stable financial performance. Such findings imply that companies with higher levels of CSR engagement experience lower operating risks. Su et al. (2016) studied firms targeting emerging markets and found that those participating in CSR activities exhibited better reputations, as well as increased operating and revenue performance. Therefore, it seems that not only does fulfilment of CSR exert positive effects on operating and financial performance, but it further lowers operational costs, increases management efficiency, creates new business models, and increases research and development (R&D) budgets as well as opportunities for future growth (Porter and Kramer, 2006;Chen et al., 2013). Ioannon and Serafeim (2015) pointed out that market analysts forecast better financial performance for firms with higher levels of CSR engagement. Kumar et al. (2016) believed that fulfilment of CSR strengthens interaction with a firm's stakeholders and re-adjusts its operating strategies, leading to increases in both capital expenses and profits. further confirmed that integration of CSR into operational and management strategies, as well as corporate governance policies, increases the value of an enterprise. Similarly, Chen and Lee (2017) indicated that when CSR activities over a certain threshold, operating expenses use to decrease and positively affect a firm's value.Moreover, Doh et al.'s (2009) study on the relationship between CSR and stock price performance clearly indicated that firms with better CSR performance have better return on equity (ROE), suggesting that investors have shifted their attention from maximization of a shareholder's profits to the interaction between a company ...

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