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India has mandated corporate social responsibility (CSR) expenditure under Section 135 of the Indian Companies Act, 2013 – the first national jurisdiction to do so. The purpose of this paper is to examine the impact of mandated CSR expenditure on firms’ stock returns by using actual CSR spending data, whereas the previous studies mostly focus on voluntary CSR proxied by CSR scores.

The authors estimate their baseline regression by using ordinary least squares(OLS) method. Although the baseline regression involving CSR expenditure and stock returns using ordinary least squares method are estimated, endogeneity and reverse causality biases are addressed by using two-stage least squares and generalized method of moments approaches. These approaches contribute mitigating endogeneity bias and biases associated with unobserved heterogeneity and simultaneity.

The findings document that mandatory CSR expenditure has a negative impact on firms’ stock returns which supports the “shareholders” expense’ view. This result remain robust after controlling for endogeneity bias and the use of both standard and robust test statistics. The authors however observe that this result holds for the firms with actual CSR expenditure equal to the mandated amount but does not hold for the firms with actual CSR expenditure greater than the mandated amount. Therefore, the authors provide evidence that CSR expenditure’s impact on stock returns depends on whether firms simply comply the regulation or voluntarily chose an amount of CSR expenditure above the mandated amount.

The primary contribution is to present a valid and robust evidence of negative effect of mandated CSR spending on firms’ stock returns when the mandatory CSR spending rule is already in place. This study contributes by examining the impact of mandated CSR spending on stock during post-implementation period (2015-2017), whereas other studies by Dharampala and Khanna (2018); Kapoor and Dhamija (2017); and Mukherjee et al. (2018) mainly examined the impact of legislation on Indian CSR. The authors use mandated actual CSR expenditure, whereas previous studies mostly focus on voluntary CSR proxied by CSR scores.

This paper aims to focus on the unique goal of understanding how marketing spending, a proxy for firm visibility, moderates the effects of corporate social responsibility (CSR) strengths and concerns on stock returns in the short and long terms. In contrast to the resource-based view (RBV) of the firm, the visibility theory, based on stakeholder awareness and expectations, offers asymmetric predictions on the moderation effects of marketing spending.

The predictions are tested based on data from KLD, Compustat and Center for Research in Security Prices from 2001-2010 and panel data based regression models.

Two results support the predictions of the visibility theory over those of the RBV. First, strengths are associated with higher stock returns, for low marketing spending firms, and only in the long term. Second, concerns are associated with lower stock returns, for high marketing spending firms, also only in the long term. A profiling analysis indicates that high marketing spending firms have high R&D spending and are more likely to operate in business-to-customer than business-to-business industries.

The two findings highlight the importance of coordination among chief marketing, sustainability and finance officers investing in CSR and marketing for stock returns, contingent on the firm’s marketing and R&D spending and industry characteristics.

This paper identifies conditions under which CSR is and is not related to stock returns, by uniquely considering three variables omitted in most past studies: marketing spending, CSR strengths and concerns and short- and long-term stock returns, all in the same study.

A firm’s ethical behavior is commonly perceived beneficial to the firm and its investors in the literature. However, activities of corporate social responsibility (CSR) are often delivered with multiple purposes, and their expenses are aggregated with other expenditures in financial statements. These two features motivate the authors to hypothesize and find that investors’ ability to predict future earnings of ethical firms may not be improved through observing the CSR activities. The study aims to suggest that CSR spending should be expressed separately from other expenses in financial reports to help investors predict the future performance of CSR firms.

The authors use future (forward) earnings response coefficients (FERC) to testing whether current stock returns reflect correct information about future earnings. The basic specification of FERC framework, initially developed by Collins et al. (1994), is a regression of current-year stock returns on past, concurrent and future reported earnings with future stock returns as a control variable. A significantly positive FERC provides evidence that investors have rich and correct information about future earnings.

The authors find less future earnings information contained in current stock returns for firms with higher intensity of CSR activities. The association is also negative between current stock returns and future earnings reported by firms with a higher degree of CSR spending aggregated with selling, general and administrative expenses (SG&A). In additional analyses, the intensity of CSR activities is positively associated the uncertainty of benefits, measured by the standard deviation of future earnings over the next five years. This future earnings variability does not exist, even though CSR spending is aggregated with SG&A, consistent with the basic principle that accounting expenses create no future economic impacts.

The authors contribute to the current debate over consequences of CSR activities and accounting for CSR spending from a different angle. A common belief is that voluntary disclosure on CSR activities would aid in reducing costs of equity capital and financial reporting errors. These studies provide corporate managers with good reasons and motivations to expect beneficial consequences of voluntary disclosure. The results show that general investors are less capable of predicting future earnings when there is a higher degree of CSR spending aggregated with SG&A. It also highlights potential problems in the disclosure of general-purpose financial reporting to accounting standard setters.

Prior studies on corporate social responsibility (CSR) and performance have frequently used unidirectional, single-equation regression although the literature recommends the reciprocal association of CSR with firm performance. This paper aims to elucidate the interactive relationship of CSR spending with financial inclusion (FI) and firm performance. The study also explores the moderating impact of the level of FI on the CSR-firm performance relationship.

This study uses a simultaneous equations model to capture the FI, CSR and firm performance relationships and apply a three-stage regression approach and generalised method of moments approach to address possible endogeneity.

The results confirm a positive association of CSR spending with performance but a negative relationship of FI with performance. This paper also finds that FI negatively moderates the CSR spending-performance relationship.

The positive impact of CSR spending and the negative impact of FI on performance in mandatory CSR regimes provides valuable input in policy formulation. The results of the study will also be useful to national and international organisations, such as the International Monetary Fund and the World Bank.

This study uses a simultaneous equations model to capture the reciprocal association of CSR spending with firm performance, whereas prior studies on CSR and performance have frequently used unidirectional, single-equation regression. This paper also finds that FI negatively moderates the CSR spending- performance relationship. Including FI and exploring the moderating impact of the level of FI on the CSR-firm performance relationship is novel.

This study aims to provide archival evidence on the impact of board characteristics on corporate social responsibility (CSR) monetary performance and how they interact with the COVID-19 pandemic in the context of CSR monetary performance.

This study analyzes listed companies in Oman’s capital market from 2016 to 2021, using pooled ordinary least squares and unique CSR performance measures such as budgeting and spending.

The study finds that companies with more expertise and frequent meetings are more likely to allocate a larger budget for CSR activities. However, this does not apply to larger boards or to independent directors. During the COVID-19 pandemic, the effect of independent directors on CSR budgeting and spending is more pronounced, and boards with more expertise and meetings show a negative interaction with the pandemic. The interaction of board characteristics with COVID-19 in terms of CSR monetary performance varies depending on company size. Board independence and expertise show a significant reaction to COVID-19 infection and death cases when setting CSR budgeting and spending.

The findings of this study are stimulating, but stem from an emerging country with unique cultural and institutional characteristics. Methodological issues were also encountered during the analysis, so readers should exercise caution when applying the results to other settings.

This study highlights board involvement in deciding a company’s CSR investment, as it was believed that chief executive officers are considered responsible for CSR activities. Additionally, this research underscores the significance of incorporating the financial aspects of CSR into reporting.

This study examines the seldom explored relationship between corporate boards and CSR monetary aspects during regular and irregular times, offering theoretical and practical insights that benefit multiple stakeholders.

While past studies have shown that corporate social responsibility (CSR) influences brand equity, loyalty and brand attitudes, research about CSR effects on the responsible and active dimensions of brand personality remains limited. This study aims to address this gap and examine how brands with different personality strength benefit from CSR communication, providing novel insights about CSR’s branding payoffs to firms.

Three experiments were conducted. Study 1 tested if CSR communication influenced responsible and active brand personality dimensions compared to non-CSR communication. Study 2 examined how varying CSR spending allocations affect personality perceptions of weak and strong brands. Studies 1 and 2 measured responsible and active brand personalities before and after exposure to experimental manipulations, assessing immediate changes in brand personality. Study 3 replicated the results of Study 2 using fictitious brands whose initial brand personalities were manipulated as either weak or strong.

CSR communication has the potential to influence brands’ responsible and active personalities compared to non-CSR communication. However, changes in brand personalities were contingent on CSR manipulations (smaller vs larger CSR spending) and initial brand strength. Brands that lacked strongly responsible and strong active personalities experienced an improvement in these perceptions after exposure to any CSR spending message. However, brands with strong responsible or strong active personalities experienced brand erosion after exposure to smaller CSR spending message or no improvement when the CSR message was aligned with the responsible and active conduct (e.g. mentioned larger CSR spending).

This study is the first to examine how CSR affects brand personality. By combining signalling and attitude change/congruity principle theories, it provides novel theoretical contributions to explain when CSR can improve, erode or exert no effect on the responsible and active brand personalities, providing insights for effective brand management.

The purpose of this study is to examine the impact of mandatory corporate social responsibility (CSR) spending on firm value in the Indian context.

Using firm-level data over the period 2012–2017, this study uses the difference-in-differences (DID) technique combined with matching to control for potential endogeneity of the decision to comply with the CSR Act since the Act in its current form is applicable as a comply-or-explain obligation.

The results of this study suggest that mandatory CSR spending has a positive and statistically significant impact on firm value. These results remain robust to alternative econometric techniques such as regression discontinuity design (RDD) and randomization inference test as well as to alternative empirical specifications. Furthermore, the study demonstrates that the positive effect of CSR spending on firm value is more pronounced for firms with higher information asymmetry problem and lower institutional holdings.

This study explicitly considers the “comply-or-explain” flexibility option, in terms of spending on CSR, provided to Indian firms for the initial two to three years and investigates whether spending on CSR helps firms enhance their firm value. The study also finds that the positive effect of CSR spending on firm value is more pronounced for firms with higher information asymmetry problems and lower institutional holdings.

Based on data collected using the purposive sampling technique extracted from a secondary data source, this paper aims to examine the relationship between female directors and firm innovation. The paper also examines the impact of leverage ratios and corporate social responsibility (CSR) expenditure on the association between female directors and firms’ innovation.

The feasible general least regression technique was applied to overcome potential endogeneity issues associated with female directors and corporate innovation spending.

With subsequent control of individual and firm variables, the first findings of this study indicate that female directors significantly decrease firms’ innovation spending. The second outcomes of this study show that the leverage ratio considerably improves corporate innovation spending. The third findings show that the leverage ratio positively moderates the association between female directors and corporate innovation spending. The fourth findings show that CSR expenditure significantly improves firm innovation spending but does not moderate the association between female directors and corporate innovation spending.

Based on dependency theory, robust and reliable conclusions suggest that female directors’ engagement on the Indian board needs more than biological sex, that is, the required expertise. The paper also provides policy implications for female expertise in minority engagement on the board of listed firms in India, especially when the firm desires to increase its corporate innovation spending.

This study is among the first, to the best of the authors’ knowledge, to comment on mandatory CSR expenditure as an independent variable on innovation or a moderating variable between female directors and corporate innovation. Similarly, the family-controlled management perspective in this study deepens the debate on gender diversity and corporate innovation.

This study aims to provide a framework aligning corporate social responsibility (CSR) initiatives with sustainable development goals (SDGs) 2030, applying the triple bottom line (TBL) approach. The research examines and evaluates the reach of Maharatna Central Public Sector Enterprises’ (CPSE) CSR spending towards sustainability and maps them with SDGs focusing on economic, social and environmental aspects. In addition, state-wise spending for CSR of all eligible Indian companies has been discussed.

The study used secondary data related to CSR spending and disclosure from the annual reports and sustainability reports accessible on the official websites of CPSE, Global Reporting Initiative standards, CSR Guidelines of Department of Public Enterprises and Securities Exchange Board of India, Government of India’s National Guidelines on Responsible Business Conduct (NGRBC) (2018) research papers, financial dailies and websites. The study includes the CPSEs awarded with the status of Maharatna companies under the Guidelines of Maharatna Scheme for CPSEs.

The top CSR initiatives focused on by Maharatna companies were related to poverty, hunger, sanitation and well-being, promotion of education and contribution to the Prime Minister’s National Relief Fund. These initiatives aligned with the top SDGs related to life on land, education and health care, which proved responsible business leadership (RBL) through TBL. The alignment indicates that India is moving towards sustainable development achievements systematically.

The practical consequences can be understood through the CSR spending of Maharatna Public Sector Undertakings towards economic, social and environmental aspects. The spending demonstrates their commitment, which other public and private sector organizations can adopt.

The Government of India’s NGRBC’s guidelines towards inclusive growth and equitable development, addressing environmental concerns, and being responsive to all its stakeholders is a thorough indication of driving the business towards being more responsible. This research has developed a framework aligning CSR and SDG through the TBL approach, which other developing countries can adopt as a model.

There is dearth of research among public sector company’s contribution towards attaining SDGs and demonstrating RBL. This research fulfils this gap. Mapping CSR activities to SDG’s also has not been clearly carried out in previous research, which is a contribution of this study.

The purpose of this study is to investigate the role and impact of state regulation of corporate social responsibility (CSR) spending on company actions and to examine whether making mandatory CSR encourages businesses to engage in social welfare projects. Additionally, the authors also investigate whether these CSR expenditures can enable India to meet the Sustainable Development Goals (SDGs) 2030.

CSR expenditure data from the government repository of 22,531 eligible companies in India were studied from FY2014–2015 to FY2019–2020. CSR spending is further classified according to development areas of Schedule VII of the Companies Act, 2013, and mapped with the SDGs to see which ones the corporations have prioritized.

CSR spending increased from INR 10,066 crore in 2014–2015 to INR 24,689 crore in 2019–2020. Companies have prioritized CSR expenditure on education, followed by health care and rural development. The number of companies spending more than the mandated expenditure increased by around 75% from 2014–2015 to 2019–2020. However, the “comply or explain” approach of the law has led to a major number of companies spending zero on CSR. Companies have generally concentrated on moving CSR funds to designated funds rather than using them for capacity development to instill social responsibility culture.

This study provides evidence of the impact of mandatory CSR expenditure on welfare activities and SDGs. Unlike previous research, the results of this study are based on CSR expenditures rather than voluntary CSR scores.