IDEAS home Printed from https://ideas.repec.org/a/spr/decisn/v43y2016i4d10.1007_s40622-016-0131-7.html
   My bibliography  Save this article

CSR and corporate performance: evidence from India

Author

Listed:
  • Priyanka Garg

    (Panjab University)

Abstract

CSR is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large (WBCSD in corporate social responsibility: meeting changing expectations. BCSD Publications, Geneva, 1998, p 3). There is ample research done on CSR and corporate performance. CSR has proven beneficial in increasing the business profile and reputation of companies at local, national, and international level. Some contrary findings are also present which might be due to different economic conditions, different time periods, and different sample sizes. The present study has made an attempt to investigate the impact of CSR on performance of Indian corporate sector. The analysis has been confined to all those companies which are included in the S&P BSE CARBONEX Index (as on March 31, 2014) for ten financial years from 2004–2005 to 2013–2014. Data have been collected with the help of annual reports of selected companies and PROWESS database. Result of panel data regression analysis reveals that CSR impacts the value of Indian corporate sector highly and significantly. Further, the results suggest that CSR performance of companies impacts corporate performance not only for current year, but also for the following years. Trend of CSR performance has also been analyzed to assess whether the companies have improved over the period of time or not. Results of paired t test and Wilcoxon signed rank test disclose that CSR performance of sample firms has significantly improved over the period of study. Further, the present study has tried to analyze CSR on the basis of ownership (public vis-à-vis private companies) which confirms that CSR performance of public sector companies is better than private sector. The results further reveal that CSR performance of companies differs significantly across industries.

Suggested Citation

  • Priyanka Garg, 2016. "CSR and corporate performance: evidence from India," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 43(4), pages 333-349, December.
    • Handle: RePEc:spr:decisn:v:43:y:2016:i:4:d:10.1007_s40622-016-0131-7
    DOI: 10.1007/s40622-016-0131-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40622-016-0131-7
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s40622-016-0131-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Marcus Wagner & Stefan Schaltegger, 2004. "The Effect of Corporate Environmental Strategy Choice and Environmental Performance on Competitiveness and Economic Performance," Post-Print hal-00279008, HAL.
    2. Marcus Wagner, 2005. "How to reconcile environmental and economic performance to improve corporate sustainability: corporate environmental strategies in the European paper industry," Post-Print hal-00279158, HAL.
    3. Carroll, Archie B., 1991. "The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders," Business Horizons, Elsevier, vol. 34(4), pages 39-48.
    4. Kansal, Monika & Joshi, Mahesh & Batra, Gurdip Singh, 2014. "Determinants of corporate social responsibility disclosures: Evidence from India," Advances in accounting, Elsevier, vol. 30(1), pages 217-229.
    5. Ali Fekrat, M. & Inclan, Carla & Petroni, David, 1996. "Corporate environmental disclosures: Competitive disclosure hypothesis using 1991 annual report data," The International Journal of Accounting, Elsevier, vol. 31(2), pages 175-195.
    6. Salama, Aly, 2005. "A note on the impact of environmental performance on financial performance," Structural Change and Economic Dynamics, Elsevier, vol. 16(3), pages 413-421, September.
    7. Abagail McWilliams & Donald Siegel, 2000. "Corporate social responsibility and financial performance: correlation or misspecification?," Strategic Management Journal, Wiley Blackwell, vol. 21(5), pages 603-609, May.
    8. Simon S. Gao & Saeed Heravi & Jason Zezheng Xiao, 2005. "Determinants of corporate social and environmental reporting in Hong Kong: a research note," Accounting Forum, Taylor & Francis Journals, vol. 29(2), pages 233-242, June.
    9. M. López & Arminda Garcia & Lazaro Rodriguez, 2007. "Sustainable Development and Corporate Performance: A Study Based on the Dow Jones Sustainability Index," Journal of Business Ethics, Springer, vol. 75(3), pages 285-300, October.
    10. Kolk, Ans, 2010. "Trajectories of sustainability reporting by MNCs," Journal of World Business, Elsevier, vol. 45(4), pages 367-374, October.
    11. Mitali Sen & Kuhali Mukherjee & J.K. Pattanayak, 2011. "Corporate environmental disclosure practices in India," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 12(2), pages 139-156, September.
    12. Wagner, Marcus & Schaltegger, Stefan, 2004. "The Effect of Corporate Environmental Strategy Choice and Environmental Performance on Competitiveness and Economic Performance:: An Empirical Study of EU Manufacturing," European Management Journal, Elsevier, vol. 22(5), pages 557-572, October.
    13. Rim Makni & Claude Francoeur & François Bellavance, 2009. "Causality Between Corporate Social Performance and Financial Performance: Evidence from Canadian Firms," Journal of Business Ethics, Springer, vol. 89(3), pages 409-422, October.
    14. Lin, Chin-Huang & Yang, Ho-Li & Liou, Dian-Yan, 2009. "The impact of corporate social responsibility on financial performance: Evidence from business in Taiwan," Technology in Society, Elsevier, vol. 31(1), pages 56-63.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shafat Maqbool, 2019. "Does corporate social responsibility lead to superior financial performance? Evidence from BSE 100 index," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 46(3), pages 219-231, September.
    2. Mingzhe Qiao & Shiwei Xu & Guangdong Wu, 2018. "Corporate Social Responsibility and the Long-Term Performance of Mergers and Acquisitions: Do Regions and Related-Party Transactions Matter?," Sustainability, MDPI, vol. 10(7), pages 1-15, July.
    3. Jayasree Mangalagiri & Malla Praveen Bhasa, 2022. "Corporate social responsibility and firm performance: evidence from India’s national stock exchange listed companies," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 19(2), pages 144-152, June.
    4. Sarfaraz Javed & Uvesh Husain, 2021. "Corporate CSR practices and corporate performance: managerial implications for sustainable development," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 48(2), pages 153-164, June.
    5. Ruy de Castro Sobrosa Neto & Carlos Rogério Montenegro de Lima & Daniel Goulart Bazil & Manoela de Oliveira Veras & José Baltazar Salgueirinho Osório de Andrade Guerra, 2020. "Sustainable development and corporate financial performance: A study based on the Brazilian Corporate Sustainability Index (ISE)," Sustainable Development, John Wiley & Sons, Ltd., vol. 28(4), pages 960-977, July.
    6. Boban Melovic & Nikola Milovic & Tamara Backovic-Vulic & Branislav Dudic & Peter Bajzik, 2019. "Attitudes and Perceptions of Employees toward Corporate Social Responsibility in Western Balkan Countries: Importance and Relevance for Sustainable Development," Sustainability, MDPI, vol. 11(23), pages 1-37, November.
    7. Deepak Subba & Sanjeev Kumar, 2018. "Employees’ responses to corporate social responsibility: a study among the employees of banking industry in India," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 45(4), pages 301-312, December.
    8. Ritika Gupta & Pankaj Kumar, 2022. "Corporate social responsibility disclosure: a study on NIFTY 100 companies," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 27(4), pages 492-515.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ben Lahouel, Béchir & Ben Zaied, Younes & Managi, Shunsuke & Taleb, Lotfi, 2022. "Re-thinking about U: The relevance of regime-switching model in the relationship between environmental corporate social responsibility and financial performance," Journal of Business Research, Elsevier, vol. 140(C), pages 498-519.
    2. Scott J. Callan & Janet M. Thomas, 2011. "Executive compensation, corporate social responsibility, and corporate financial performance: a multi‐equation framework," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 18(6), pages 332-351, November.
    3. Markus Hang & Jerome Geyer‐Klingeberg & Andreas W. Rathgeber, 2019. "It is merely a matter of time: A meta‐analysis of the causality between environmental performance and financial performance," Business Strategy and the Environment, Wiley Blackwell, vol. 28(2), pages 257-273, February.
    4. Maximilian Schnippering, 2020. "R&D: the missing link between corporate social performance and financial performance?," Management Review Quarterly, Springer, vol. 70(2), pages 243-255, May.
    5. Ruiqian Li & Ramakrishnan Ramanathan, 2018. "Impacts of Industrial Heterogeneity and Technical Innovation on the Relationship between Environmental Performance and Financial Performance," Sustainability, MDPI, vol. 10(5), pages 1-25, May.
    6. Karishma Ansaram & Neeveditah Pariag-Maraye, 2018. "Modelling the Impact of Responsibility Levels on Corporate Financial Performance: The Case of Top 100 Firms in Mauritius," Business and Economic Research, Macrothink Institute, vol. 8(3), pages 118-138, September.
    7. Saridakis, Charalampos & Angelidou, Sofia & Woodside, Arch G., 2023. "How historical and social aspirations reshape the relationship between corporate financial performance and corporate social responsibility," Journal of Business Research, Elsevier, vol. 157(C).
    8. Fernando Gómez-Bezares & Wojciech Przychodzen & Justyna Przychodzen, 2016. "Corporate Sustainability and Shareholder Wealth—Evidence from British Companies and Lessons from the Crisis," Sustainability, MDPI, vol. 8(3), pages 1-22, March.
    9. Antonio D'Amato & Camilla Falivena, 2020. "Corporate social responsibility and firm value: Do firm size and age matter? Empirical evidence from European listed companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 909-924, March.
    10. Elena Dobre & Georgiana Oana Stanila & Laura Brad, 2015. "The Influence of Environmental and Social Performance on Financial Performance: Evidence from Romania’s Listed Entities," Sustainability, MDPI, vol. 7(3), pages 1-41, March.
    11. María del Mar Miras‐Rodríguez & Amalia Carrasco‐Gallego & Bernabé Escobar‐Pérez, 2015. "Are Socially Responsible Behaviors Paid Off Equally? A Cross‐cultural Analysis," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 22(4), pages 237-256, July.
    12. Jieun Chung & Charles H. Cho, 2018. "Current Trends within Social and Environmental Accounting Research: A Literature Review," Accounting Perspectives, John Wiley & Sons, vol. 17(2), pages 207-239, June.
    13. Woon Leong Lin & Chin Lee & Siong Hook Law, 2021. "Asymmetric effects of corporate sustainability strategy on value creation among global automotive firms: A dynamic panel quantile regression approach," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 931-954, February.
    14. Ramakrishnan Ramanathan, 2018. "Understanding Complexity: the Curvilinear Relationship Between Environmental Performance and Firm Performance," Journal of Business Ethics, Springer, vol. 149(2), pages 383-393, May.
    15. Zaheer Alam & Yasir Bin Tariq, 2023. "Corporate Sustainability Performance Evaluation and Firm Financial Performance: Evidence from Pakistan," SAGE Open, , vol. 13(3), pages 21582440231, July.
    16. Hajer Tebini & Bouchra M'Zali & Pascal Lang & Blanca Perez‐Gladish, 2016. "The Economic Impact of Environmentally Responsible Practices," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 23(5), pages 333-344, September.
    17. Ben Lahouel, Béchir & Bruna, Maria-Giuseppina & Ben Zaied, Younes, 2020. "The curvilinear relationship between environmental performance and financial performance: An investigation of listed french firms using panel smooth transition model," Finance Research Letters, Elsevier, vol. 35(C).
    18. Bongani Munkuli & Renee Horne, 2018. "Financial Markets Value Reputation for Corporate Social Responsibility (CSR) – A Study of the South African Mining Sector," Africagrowth Agenda, Africagrowth Institute, vol. 15(2), pages 17-22.
    19. Jaroslava Hyršlová & Pavel Tomšík & Lucie Vnoučková, 2017. "Relation between Sustainability-Related Communication and Competitiveness in the Chemical Industry," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 65(1), pages 283-292.
    20. E.O. Marfo & L. Chen & H. Xuhua & H.A. Antwi & E. Yiranbon, 2015. "Corporate Social Responsibility: Driving Dynamics on Firm’s Profitability in Ghana," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 5(3), pages 116-132, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:decisn:v:43:y:2016:i:4:d:10.1007_s40622-016-0131-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.