Abstract
Objective: This study examines the influence of different ownership structures on corporate social responsibility spending in a mandatory CSR regime.
Method: We use the CSR data under statutory mandate reported by the top 500 publicly listed Indian firms of the first four years after CSR law implementation in 2014 on Bombay Stock Exchange and the Ministry of Corporate Affairs website. Using institutional and agency theory arguments, we hypothesize that ownership structure influences CSR spending. We use multiple logistics regression for our statistical analyses.
Results: In line with our prediction, our results reveal that different ownership structures influence the variation in CSR spending. Foreign firms spend on CSR at par with the statutory mandate. Government firms spend above the statutory mandate, and promoter-owned firms spend below the statutory mandate.
Conclusion: Through CSR spending on social development initiatives, firms can contribute to the United Nations' sustainable development goals (SDGs) and build their credibility among stakeholders. Our study explains the influence of different ownership structures on CSR spending in a mandatory CSR regime. This study can help policymakers revisit the CSR law provisions by understanding why some firms are spending more and why some firms are spending less on CSR and encourage firms to spend more on CSR initiatives. We leverage institutional and agency theory to explain our findings.
Publisher
South Florida Publishing LLC
Reference41 articles.
1. Awaysheh, A., Heron, R. A., Perry, T., & Wilson, J. I. (2020). On the relation between corporate social responsibility and financial performance. Strategic Management Journal, 41(6), 965–987.
2. Bayaga, A. (2010). Multinomial Logistics Regression: Usage and application in risk analysis. Journal of applied quantitative methods, 5(2).
3. Bonsu, S. (2019). Corporate social responsibility: Assessing the alignment of theory and practice utilizing case studies. Journal of Marketing and Management, 10(1), 1–18.
4. Campbell, J. L. (2007). Why Would Corporations Behave in Socially Responsible Ways? An Institutional Theory of Corporate Social Responsibility. Academy of Management Review, 32(3), 946–967.
5. Campbell, J. L. (2018). 2017 Decade Award Invited Article Reflections on the 2017 Decade Award: Corporate Social Responsibility and the Financial Crisis. Academy of Management Review, 43(4), 546–556.