Corporate social responsibility spending as a building block for sustainable corporate ethical identity: Lessons from Indian business groups

Abstract

We examine the cost implications of using corporate social responsibility (CSR) as a vehicle to build sustainable corporate ethical identity (CEI). CSR investment is recognized as one of the effective channels to promote a firm's CEI. However, excessive CSR could divert resources from other strategic projects, and shareholder may not favor such initiatives. We address this managerial dilemma with a unique Indian CSR regulatory environment. Our results show that firms with greater reputational concerns have a higher proclivity to meet the mandatory CSR investment level but are reluctant to exceed the mandatory CSR limit due to absence of incremental financial benefits.

Corporate social responsibility budgeting and spending during COVID–19 in Oman: A humanitarian response to the pandemic

“…We use annual reports for data on CSR spending and financial data. It is worth noting that data on CSR monetary investments is not a requirement in most capital markets and is seldom available in the annual reports ( Dutta et al, 2021 ). Omani-listed firms have to provide data on the planned and actual amounts of money used for CSR activities, particularly, directed to philanthropic activities (e.g., donations) and community relations activities (e.g., sponsoring religious or community activities).…”

“…Following Bhattacharya et al (2009) , we define CSR spending as the total amount of money spent by a firm toward CSR initiatives during the year. This definition has been adopted by more recent research on CSR spending ( Dutta et al, 2021 , Malik et al, 2019 ). We define CSR budgeting as the total amount of money determined by the firm to be spent during the year on CSR activities.…”

“…This is a long-standing vision of the Omani government calling private businesses to develop their local community and practice good citizenship ( Salemi, 2017 ). To the best of our knowledge, no country has such a requirement except India, where companies must disclose the amount spent on CSR activities in their annual report ( Dutta et al, 2021 ). Second, the government has taken many measures to combat the pandemic since the first two confirmed cases on February 24th, 2020, calling for support from corporate businesses.…”

Impact of mandatory CSR spending on strategic brand‐building levers: Evidence from a quasi‐natural experiment in India

“…Bansal et al (2021) find that CSR spending benefits the firms up to a certain level only, and any investment beyond that level negatively impacts the financial and market performance of firms. In the same vein, Dutta et al (2021) find that firms spent up to the minimum level and are reluctant to exceed the limit due to the absence of incremental financial benefits.…”

Influence of public credit risk on private capital in public–private partnership models

“…From 2000 onward, China introduced more standardized PPP projects (e.g., the Beijing Metro Line 4), ensuring the dominance of the BOT model. This not only reduces the government's financial burden but also stimulates corporate social responsibility (Dutta et al, 2021; Wasiuzzaman et al, 2022). However, local governments tended to view such initiatives merely as financing tools, giving rise to “pseudo‐PPP” and “generalized PPP” projects (Cebotari, 2008).…”