Title: Corporate social responsibility and firm market performance: a study of Indian listed companies

Authors: Ron Bird; Geeta Duppati; Abhishek Mukherjee

Addresses: Finance Department, Waikato Business School, University of Waikato, Hillcrest Road, Hamilton 3240, New Zealand; Paul Woolley Centre, University of Technology Sydney, 14-28 Ultimo Road, Ultimo NSW 2007, Australia ' Finance Department, Waikato Business School, University of Waikato, Hillcrest Road, Hamilton 3240, New Zealand ' Finance Department, Waikato Business School, University of Waikato, Hillcrest Road, Hamilton 3240, New Zealand

Abstract: This paper uses the flow of information relating to the introduction of mandatory CSR expenditure in India as the vehicle to measure investor perceptions of the impact of such spending on company profitability. We use both event study and regression analysis methodology and find that when mandatory CSR spending was first mooted in mid-2008, investors started out with the expectation that more CSR expenditure would increase future corporate profitability. However, by the time that the legislation was passed in August 2012, these expectations had changed to where they expected the opposite to hold.

Keywords: corporate social responsibility; CSR expenditure; market impact; mandatory legislation; India; market performance; investor perceptions; corporate profitability.

DOI: 10.1504/IJBGE.2016.076351

International Journal of Business Governance and Ethics, 2016 Vol.11 No.1, pp.68 - 88

Received: 14 Aug 2015
Accepted: 28 Jan 2016

Published online: 04 May 2016 *

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