PEARSON correlation test.

The impact of the degree and effectiveness corporate social responsibility (CSR) fulfillment on corporate value assessment by investors is significant. However, prior research on effects of CSR on stock price crash risk has showed contrasting results. Certain studies suggest that an abundance of CSR can become a self-serving tool for management. This may lead to concealing and accumulating negative information, resulting in stock price collapse. Based on principal-agent theory, we suggest that CSR equilibrium could be an effective approach to prevent the concealment of negative events by managers. Employing data from Chinese A-share listed companies spanning 2010 to 2020, we examine how CSR equilibrium and corporate governance levels influence the risk of stock price collapse across entities with different property rights. Empirical findings indicate that a balanced distribution of CSR can mitigate the risk of stock price collapse. Furthermore, we find that higher levels of corporate governance can mitigate the negative impact of CSR equilibrium on stock price collapse risk. Interestingly, this governance effect is more pronounced in state-owned enterprises compared to private enterprises, where the likelihood of hiding adverse information is higher. Additionally, it provides a theoretical explanation for the impact of CSR equilibrium on the risk of stock price collapse, based on the principal-agent problem, thereby expanding the applicability of the theory. Practically, the research findings carry significant implications for listed companies, CSR rating agencies, and investors.