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AN EMPIRICAL STUDY OF CORPORATE SOCIAL RESPONSIBILITY AND PROFITABILITY
The word of corporate social responsibility stems from a commitment to the society in which a business operates. In India, it has been traditionally linked to spirituality, while respect in the corporate world has been treated at par with the bottom line. From a long time several research studies ha...
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| Formato: | Journal Article |
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Abhigyan
2010
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| Sumario: | The word of corporate social responsibility stems from a commitment to the society in
which a business operates. In India, it has been traditionally linked to spirituality,
while respect in the corporate world has been treated at par with the bottom line. From
a long time several research studies have conducted to examine corporate social
responsibility (CSR) and its effects on business performance. Inversely, the present
study examines the relationship between financial performance of the Indian
companies and their relative spending on corporate social responsibility. The
objective of this study is to examine the causal relation between corporate social
responsibility (CSR) and financial performance. For the financial year 2007-08, top
1000 firms are examined, which are rated by karmyog (A Non- Government
Organization), out of which 37 companies found associated with social programs and
parted some part of their revenue for society in the financial year under study. Based
on theoretical assertions and empirical evidence in the literature the research
identified a positive relationship between CSR and financial performance. Moving
further, categorization has made on the basis of index based (Nifty) and non-index
based companies. On the basis, an attempt has been made to find which one is
showing more interest in this area as far as their recommended budget and actual
expenditure on social projects are concerned and level of responsiveness among both
categories. With the help of descriptive and inferential measures, it has found that
financial performance does not have much positive impact on CSR. Finally, the paper
concluded that corporate social responsibility is driven more by unobservable firm
characteristics than by financial performance and the level of commitment of Indian
firms towards social programs is not up to mark. As the need for CSR finds wider
recognition in India, it would be worth to examine the contribution by Indian
corporates. It is concluded that Indian companies are not very sincere towards social
projects as far as their annual spending are concerned and finally found only
descriptive statements and commitments in their annual reports than the concrete
actions on annual basis. |
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| Descripción Física: | Vol 28 No. 3 (October – December 2010) |