Title: Post regulatory impact of CSR on firm value and stock volatility in India: an empirical evidence

Authors: Keerat Bhurjee; Ankur Paliwal

Addresses: Shiv Nadar University, NH 91, Tehsil Dadri, Gautam Buddha Nagar, Uttar Pradesh – 201314, India ' Shiv Nadar University, NH 91, Tehsil Dadri, Gautam Buddha Nagar, Uttar Pradesh – 201314, India

Abstract: We study the consequences of an exogenous regulation in 2013 making it mandatory for firms to contribute towards corporate social responsibility (CSR). Using a data set of 190 companies contributing mandatorily towards CSR, we empirically investigate the relationship between CSR, firm performance and volatility in an emerging market such as India. We also examine the moderating effects of firm size and industry in explaining the above relationship. We document a positive impact on short-and long-term firm profitability following the regulation. We do not find compelling evidence for the impact of CSR on the firms' volatility although the firm age and size plays a positive moderating role in explaining the volatility at the firm level. Finally, we also find that manufacturing firms are more socially responsible in terms of their CSR activities as compared to service sector firms. Our overall results provide empirical support for the potential benefits accruing to the CSR activities.

Keywords: corporate social responsibility; CSR; firm performance; firm size; firm age; volatility of stock returns; India.

DOI: 10.1504/IJICBM.2023.132738

International Journal of Indian Culture and Business Management, 2023 Vol.29 No.4, pp.436 - 457

Received: 03 Mar 2022
Accepted: 05 Mar 2022
Published online: 09 Aug 2023 *

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