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The purpose of this study is to examine the impact of corporate social responsibility (CSR) expenditure and business responsibility report (BRR) on a firm’s financial performance. Additionally, the study explores whether CSR expenditure and firm performance are related linearly or otherwise. The study also assesses the influence of mandating CSR expenditure on a firm’s performance.

The study is set in India and uses a nine-year data set from 165 companies listed on the Bombay Stock Exchange. Data compilation and analysis are done by using content analysis and panel data regressions.

The main findings of the study are that the effect of CSR expenditure on firm performance in India is non-linear and can be characterized as parabolic for investigated firms. While some performance indicators suggest a U-shaped relationship, others show an inverted U-type pattern, making a definitive conclusion elusive in either direction. BRR scores themselves have a positive impact on firm performance. Mandatory CSR expenditure affects the financial performance negatively, but the market performance improves in general.

The study provides new insights on the relationship between CSR expenditure, BRR scores and firm performance from India, which is not only a notable emerging market but also has other gripping characteristics. It has a prolific history of philanthropy, and yet, it is the first country in the world to mandate CSR expenditure in recent times. The equation between reported economic progress and general quality of life remains intriguing, and yet the number of studies on the effects of CSR expenditure on firm performance are no match to the volume of ongoing and completed works in more developed markets. This study attempts to trim the gap and provide some useful insights for managers, policymakers and stakeholders, apart from prompting further research.