Corporate social responsibility spending as a building block for sustainable corporate ethical identity: Lessons from Indian business groups. (18th July 2021)

• Record Type: Journal Article
• Authors: Dutta, Shantanu; Katti, Supriya; Phani, B. V.; Zhu, Pengcheng
• Is Part Of: Managerial and decision economics. Volume 43:Number 3(2022)
• Page Start: 696
• Page End: 717
• Publication Date: 2021-07-18
• Subjects: Managerial economics -- Periodicals; Decision making -- Periodicals; Management -- Periodicals; 658.15
• DOI: 10.1002/mde.3412
• Languages: English
• ISSNs: 0143-6570

Abstract

Abstract : We examine the cost implications of using corporate social responsibility (CSR) as a vehicle to build sustainable corporate ethical identity (CEI). CSR investment is recognized as one of the effective channels to promote a firm's CEI. However, excessive CSR could divert resources from other strategic projects, and shareholder may not favor such initiatives. We address this managerial dilemma with a unique Indian CSR regulatory environment. Our results show that firms with greater reputational concerns have a higher proclivity to meet the mandatory CSR investment level but are reluctant to exceed the mandatory CSR limit due to absence of incremental financial benefits.