Dayalbagh Educational Institute (Deemed University), Dayalbagh, Agra, Uttar Pradesh, India.
Abstract
This paper investigates the effect of CSR disclosures on financial performance (EPS) for select firms belonging to the Banking, ITES, Oil, Gas and Energy, and Automotive sectors during the pre-mandatory disclosure period in India (2011-13), i.e. prior to the Companies Act, 2013. This is the first study to view CSR from the perspective of the National Voluntary Guidelines in India, prevalent as a guideline for firms to organize their CSR in India. The study utilized panel data regression with 60 firm-year observations using market capitalization, debt-equity ratio, Industry, research and development intensity, and advertisement expense as control variables. The results revealed that disclosures of ethical, transparent, and accountable functioning, safe and sustainable products, stakeholder management, and policy advocacy impacted EPS positively. Disclosures associated with employee well-being, environmental CSR, and inclusive growth practices were negatively associated with EPS. The direction of the association of Human rights disclosures with EPS varied depending on the model utilized. The study is relevant in acquiring new information about the disclosure practices of large firms in the years immediately preceding the implementation of the Companies Act 2013, a landmark milestone for CSR in India.
Keywords: Corporate Social Responsibility, Ethics, Environmental Communication, Stakeholder Management, Inclusive Growth, Voluntary Guidelines, Financial Performance
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