Original scientific paper
https://doi.org/10.1080/1331677X.2019.1637764
Corporate social responsibility, business groups and financial performance: a study of listed Indian firms
Woo Sung Kim
; Bang College of Business, KIMEP University, Almaty, Kazakhstan
Sekyung Oh
; College of Business Administration, Konkuk University, Seoul, Korea
Abstract
This study explores the relationship between corporate social responsibility (C.S.R.) and financial performance of Indian firms. We also examine the relationship between C.S.R. and financial performance in context of Indian business group firms, which are known to have unique characteristics which differ from those of Indian stand-alone firms. Using a sample of Indian listed firms between 2010 and 2015, we find that C.S.R., as measured by E.S.G. disclosure score, has a U-shaped relationship with Tobin’s Q, supporting the slack resource theory at lower level of CSR and supporting the stakeholder theory at higher level of C.S.R. The empirical results imply that an improvement in CSR actions does not always result in higher firm value but should exceed a certain level of C.S.R. to have a positive effect on firm value. In addition, we find that at lower level, a negative relationship between C.S.R. and Tobin’s Q weakens in group affiliate firms. However, this complement effect of business group disappears at higher level, weakening the positive relationship between C.S.R. and Tobin’s Q. This study offers new insights for the different influence of business groups on C.S.R. performance
Keywords
Indian firm; corporate social responsibility (C.S.R.); Tobin’s Q; R.O.A.; group- affiliated firms
Hrčak ID:
228851
URI
Publication date:
22.1.2019.
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