CSR and corporate performance: evidence from India

Global reporting initiatives and firm performance: a stakeholder's perspective in Indian companies

With the growth of the corporate sector, there is a simultaneous increase in external forces that pressurize the corporate sector to practice socially responsible behavior. Based on this, the practice of reporting sustainable and socially responsible activities is being used by companies in different manners in different countries. In view of this, the purpose of the study is to empirically analyze the financial performance of sustainability reporting and non-reporting companies from the stakeholder's perspective. The study is longitudinal, covering a time span of 22 years. The parameters of financial performance are categorized and statistically analyzed based on the stakeholders considered in the study. Based on the analysis, the study has found no evidence of difference in the financial performance from the stakeholder's perspective between sustainability reporting and non-reporting companies. The paper has contributed to the literature by analyzing the financial performance of companies from the stakeholder's perspective through longitudinal study.

Does board independence influence CSR performance? A GMM-based dynamic panel data approach

Purpose

The study aims to explore and establish the relationship that exists between board independence and corporate social responsibility (CSR) practices of Indian firms.

Design/methodology/approach

A sample of 76 non-financial companies listed on the National Stock Exchange has been considered for a period of seven years (from 2013 to 2019). The study has used several statistical tools such as the static panel data model and the Arellano–Bond dynamic panel data model based on generalized method of moments approach.

Findings

The results of the analysis have indicated board independence to have a significant positive relationship with the firms’ CSR performance. However, board size and number of board meetings have been found to have a negative relationship with CSR. Further, outcomes have also revealed that variables such as companies’ size and liquidity have a positive effect on the extent of CSR activities performed.

Practical implications

The firms which have the intention to engage in impactful CSR activities should support the independent directors’ participation in companies’ boards. The study’s findings suggest the companies to appoint independent directors strategically, keeping in mind the requirements of their board. Also, the independent directors selected should be independent in true sense, i.e. they should not be acquaintances of the company’s chief executive officer. This would ensure unbiased decision-making and would enhance the company’s CSR performance.

Originality/value

In India, CSR has gained great importance. So much so that it was made mandatory by the Companies Act, 2013. However, research studies that may assist in understanding the influence of board independence on Indian firms’ CSR performance are still scarce. The present study would foster value to the existing set of limited literature. Besides, the study has considered the dynamic nature of the relationship and has also controlled the endogeneity bias which has been examined by few studies in the past.

Impact of mandatory corporate social responsibility on corporate financial performance: the Indian experience

Purpose

The purpose of this paper is to investigate the impact of mandatory corporate social responsibility (CSR) expenditure on the firm’s financial performance in the aftermath of insertion of Section 135 in the Companies Act, 2013 for Indian listed companies.

Design/methodology/approach

The paper uses independent sample t-test, one-way ANOVA, fixed effect panel regression model and principal component analysis on a data set of 153 non-financial companies listed in BSE-500 companies for a period of 2015–2019.

Findings

The empirical results of the paper suggest that the mandatory CSR expenditure negatively impacts the company’s profitability.

Practical implications

The study has important implications for regulators and listed companies. Firstly, the mandatory CSR expenditure acts as a burden onto the on-going activities of the firms. CSR activities, therefore, should be integrated with the existing skillsets and expertise of the firms. Secondly, the government can encourage CSR activities by making the expenditure tax deductible. Moreover, the Schedule VII list of activities has a scope to become more inclusive rather than the present exhaustive list.

Originality/value

The paper highlights the gap in the expectation and actualisation of the CSR mandate by studying the recent data of the sample companies of the BSE-500 index. The paper adds to the CSR literature in the emerging market context.

The effect of total quality management-enabling factors on corporate social responsibility and business performance: evidence from Vietnamese coffee firms

Purpose

This article aims to evaluate total quality management (TQM)-enabling factors' impact on corporate social responsibility (CSR) activities and business performance through evidence from Vietnamese coffee firms.

Design/methodology/approach

Based on collecting data via in-depth face-to-face interviews with employees, who are working in the Vietnamese coffee companies. The partial least squares structural equation modeling (PLS-SEM) approach has been employed to investigate the relationship among the TQM-enabling factors, corporate social performance (CSP) and business performance.

Findings

A total of 13 TQM-enabling factors have been identified and divided into two categories, namely human and functional. The statistical results revealed a positive signal to remarkably enhance CSP and business performance by adopting those TQM-enabling factors into Vietnamese coffee firms.

Research limitations/implications

The framework model of this research should be evaluated in different contexts worldwide or in another sector that can further identify the TQM-enabling factor and the correlation among these constructs.

Practical implications

This article provides top managers of Vietnamese coffee firms with knowledge of TQM-enabling factors that may enable them to meet superior performance, including CSP, finance and reputation.

Originality/value

This is a unique study to employ the approach into the Vietnamese coffee industry context up-to-date, which is one of the essential sectors affecting Vietnam's sustainable development.

Exploring the Bi-directional relationship between corporate social responsibility and financial performance in Indian context

Purpose

This study aims to investigate the relationship between corporate social responsibility (CSR) and financial performance from the bi-directional perspective.

Design/methodology/approach

The final sample for this study are 79 companies listed in the national stock exchange for a period of eight-years (2008–2015). Random effect panel regression was performed to examine the possible link.

Findings

The result shows that CSR has a positive impact on the contemporaneous and future financial performance of the selected companies. Further, the study shows that only social dimension has a positive and significant impact on concurrent and future financial performance. The results further validate slack resource theory as lagged financial performance has a positive and significant impact on CSR.

Practical implications

The strategic value of CSR indicates that it should be seen as a value-enhancing strategy, and therefore, incorporated with the broader corporate strategy of the company. Companies should not trade-off between CSR and financial performance, rather a strategic synchronization of CSR with corporate functioning is essential. This will pave a way to build a stakeholder-sense in the corporate entities.

Originality/value

The study comprehensively examines the relationship between CSR and financial performance from both “prospective” and “retrospective” framework. This bi-directional approach has received minimal attention in the Indian context.

Attitudes and Perceptions of Employees toward Corporate Social Responsibility in Western Balkan Countries: Importance and Relevance for Sustainable Development

The aim of this paper is to identify the factors that influence employees’ attitudes and perceptions of corporate social responsibilities (CSR), as well as to discuss if there are some significant differences in the application of CSR in the analyzed Western Balkan countries, especially in terms of public and private sector affiliation. This is the first academic survey which examined the employees’ attitudes and perceptions of CSR integrally in five Western Balkan countries. Multivariate factor analysis was applied to data collected from 2410 employees in the analyzed countries. In order to test additionally the results obtained by factor analysis, the Structural Equation Model (SEM) was applied. The results of the research, obtained by multivariate factor analysis and SEM model, show that the largest percentage of employees believe that the CSR concept enables the generating of new values and success of the company, as well as welfare for the whole society. Additionally, companies are increasingly recognizing the strategic importance of CSR for the sustainability of their business, as well as the importance of development of sustainable practices in the environment. Based on the results of the research, the authors found out that there were significant differences in the understanding and acceptance of CSR in the analyzed countries, while there were significantly smaller differences between the private and public sectors. The results of the research may serve as a guide for managers when making decisions about implementing the strategy and future activities regarding CSR.