Corporate Social Responsibility and Financial Performance : Moderating Impact of Product Market Competition

Authors

  •   Deepa Sharma Research Scholar, Department of Commerce, Manipal Academy of Higher Education, Manipal - 576 104, Karnataka. & Assistant Professor, Department of Commerce, Faculty of Humanities, Social Sciences and Liberal Arts, Sikkim Manipal University, 5th Mile Tadong, Gangtok - 737 102, Sikkim
  •   Suman Chakraborty Professor and Associate Dean (Corresponding Author), School of Business and Management, SVKM's Narsee Monjee Institute of Management Studies (NMIMS), Indore, Indore - 453 112, Madhya Pradesh

DOI:

https://doi.org/10.17010/ijf/2024/v18i7/174030

Keywords:

corporate social responsibility

, financial performance, India, moderator, product market competition.

JEL Classification Codes

, G3, M10, M14

Paper Submission Date

, January 25, 2024, Paper sent back for Revision, March 5, Paper Acceptance Date, April 5, Paper Published Online, July 15, 2024

Abstract

Purpose : This paper, which is based on the idea of “strategic CSR,†examined how product market competition (PMC) affected the relationship between Indian companies’ financial performance (FP) and corporate social responsibility (CSR).

Methodology : The study was conducted on 534 manufacturing firms listed on India’s National Stock Exchange from 2016 to 2021. Based on the Hausman Specification test, this study used a fixed effects panel regression model to test the stated relationships.

Findings : A review of 3,204 firm-year observations revealed that CSR had a detrimental effect on firms’ FP. The relationship between CSR and FP showed a positive moderating influence of PMC, supporting the “strategic CSR†approach, which contends that CSR enhanced FP for businesses operating in a competitive market.

Practical Implications : This analysis validated empirical precedents that showed a favorable association between competition and company FP and a negative influence of CSR. The target audience for this study included academics, managers, stakeholders, and users of CSR data due to the importance of corporate responsibility in today's world.

Originality : In the Indian context, this study is the first attempt, as far as we are aware, to examine the moderating effect of PMC on the link between CSR and FP.

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Published

2024-07-01

How to Cite

Sharma, D., & Chakraborty, S. (2024). Corporate Social Responsibility and Financial Performance : Moderating Impact of Product Market Competition. Indian Journal of Finance, 18(7), 8–24. https://doi.org/10.17010/ijf/2024/v18i7/174030

Issue

Volume 18, Issue 7, July 2024

Section

Articles
Crossref
Scopus
Google Scholar
Europe PMC

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