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Linkage between Corporate Social Responsibility Practices and Firm’s Financial Performance: Evidence from Select Indian IT Companies

Vol 8 , Issue 1 , January - June 2021 | Pages: 98-115 | Research Paper  

 
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https://doi.org/10.17492/jpi.manthan.v8i1.812106


Author Details ( * ) denotes Corresponding author

1. * Ahana Sen, Assistant Professor, Department of Management, Raiganj University, Raiganj, West Bengal, Kolkata, West Bengal, India (ahanasen2117@gmail.com)
2. Santanu Mallick, Assistant Professor, Department of Commerce, Banwarilal Bhalotia College, Asansol, West Bengal, Kolkata, West Bengal, India (mallicksantanu16@gmail.com)

Corporate social responsibility (CSR) has attracted increased attention and importance in recent years especially in India since 1 April 2014, as Companies’ Act 2013 makes it mandatory for certain firms to spend a certain minimum amount on CSR activities. Literature is yet indecisive on the relationship between CSR and firm performance. In this study, the impact of mandatory CSR spending on firm performance is examined based on the cross-section data for select IT firms for the period 2014-2015 to 2018-2019. It is hypothesized that CSR spending has a positive impact on firms’ performance measured in terms of ROE. Logit regression model is used to estimate the relationship between CSR spending and performance of firms. The study reveals a significant relationship between CSR status and firms’ performance measured by ROE.

Keywords

Firm performance; Corporate social responsibility; Companies’ Act 2013; IT companies.

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