CSR SPENDING IN INDIA: EXPLORING THE LINKAGES WITH BUSINESS GROUP AFFILIATION AND PRODUCT PORTFOLIO DIVERSIFICATION

  • Srikanth Potharla ICFAI Business School(IBS), ICFAI Foundation for Higher Education, India.
  • Hiranya Dissanayake Wayamba University of Sri Lanka, Sri Lanka.
  • Balachandram Amirishetty Government Degree College, Siddipet Autonomous, Siddipet, Telangana. India

Abstract

The present study aims to examine the influences of group affiliations status on the CSR spending of a firm and also to test how the group size and interaction of group size and product portfolio diversification influences the CSR spending. The sample of the present study covers 1,513 Indian firms coming under the ambit of CSR reporting, represented through the unbalanced panel data set of 4,459 firm-years from the year 2014 to 2019. The baseline model regresses CSR spending on the group affiliation status and set of controlling variables which are having the impact on CSR spending by using panel least squares regression model. The baseline model is extended to test the impact of group size and interaction of group size and product portfolio diversification on the CSR spending. Industry variations with regard to CSR spending are controlled by introducing industry fixed effects into the regression model.  The findings of the study reveal significant positive impact of group affiliation status on CSR spending. The results are also robust to the group size effect and the interaction effect of group size and product portfolio diversification. The findings are supporting stewardship theory and socio—emotional wealth creation view of the group affiliated firm which asserts that group affirms experience variety of stakeholder demands and social issues. Building social reputation through CSR activities will be helpful in handling such situations.  The findings also proved that larger group firms with wider product diversification are more encouraged towards CSR spending. This is the first study which tests the impact of group size and also the interaction of group size and product portfolio diversification on CSR spending. The study contributes to the literature on how the ownership style, especially, group affiliation status, influences the social engagement of a firm

Downloads

Download data is not yet available.

Author Biographies

Hiranya Dissanayake, Wayamba University of Sri Lanka, Sri Lanka.

Senior Lecturer, Department of Accountancy, Faculty of Business Studies and Finance

Balachandram Amirishetty, Government Degree College, Siddipet Autonomous, Siddipet, Telangana. India

Assistant Professor of Commerce, Government Degree College Siddipet Autonomous.

Published
2023-01-23
How to Cite
Potharla, S., Hiranya Dissanayake, & Balachandram Amirishetty. (2023). CSR SPENDING IN INDIA: EXPLORING THE LINKAGES WITH BUSINESS GROUP AFFILIATION AND PRODUCT PORTFOLIO DIVERSIFICATION. Applied Finance Letters, 11, 122 - 134. Retrieved from https://ojs.aut.ac.nz/applied-finance-letters/article/view/542
Section
Articles submitted to regular issue