Did India’s CSR Mandate Enhance or Diminish Firm Value?

Panwar, Rajat ORCID: 0000-0002-2926-5526, Pandey, Vivek ORCID: 0000-0001-6378-1164, Suddaby, Roy ORCID: 0000-0002-9167-9180 and Vidal, Natalia G ORCID: 0000-0002-0475-1149 (2023) Did India’s CSR Mandate Enhance or Diminish Firm Value? Business & Society, 62 (2). pp. 401-433.

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Abstract

<jats:p> Can mandated adoption of corporate social responsibility (CSR) improve firm value? Most CSR adoption is purely voluntary. However, governments regularly encourage CSR adoption with soft regulations that vary from simply endorsing and symbolically supporting CSR to requiring the adoption of specific practices. Governments have resisted fully mandating CSR because there is some concern universally that mandated CSR may reduce firm value. There is, however, no empirical clarity as to whether mandated CSR impedes or improves firm value. We address this uncertainty by analyzing the effects of the mandated adoption of CSR that the government of India legislated in 2014. Drawing on a sample of 1,526 publicly traded firms and deploying a combinative analytical framework comprising an event study, regression discontinuity design, and a difference-in-differences technique, we conclude that India’s CSR mandate did, in fact, increase value for all firms bound by the mandate. This value-enhancing effect was greater for foreign firms relative to domestic firms. Our results refute previous research showing that India’s CSR mandate diminished firm value. </jats:p>

Item Type:	Article
Divisions:	Faculty of Humanities and Social Sciences > School of Management
Depositing User:	Symplectic Admin
Date Deposited:	30 Mar 2022 09:20
Last Modified:	15 Feb 2023 21:42
DOI:	10.1177/00076503221085962
Related URLs:	Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3151720