Impact of CSR Activities on the Financial Performance of Firms

Abstract

Corporate Social Responsibility has become an integral part of the corporate structure after the rising concerns of people with the manner in which corporates have been operating to maximise their profits. The key objective of this research study is to analyse the impact of CSR expenditure on the financial performance of BSE companies of four different industries - the information and technology, automobile, cosmetics and toiletries, and the petroleum industry. The time period examined is 2013-2015 - keeping in mind that the CSR component was mandated only in the Companies Act 2013. Consistent with past studies, the two variables are correlated but the impact of CSR on financial performance varies from industry to industry. Our results suggest that the public image of a particular industry has a great influence on the relation between two variables and thus leads us to the conclusion regarding the different approaches that industries have towards the CSR expenditure.