Exploring corporate social responsibility expenditures in manufacturing firms

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Abstract

The main aim of this study is to explore corporate social responsibility expenditure in Indian manufacturing firms. The study sample consists of 62 firms listed on the Bombay Stock Exchange (BSE). Findings revealed that environment and pollution control expenses vary significantly between mature and young firms and before and after the pandemic as well. Moreover, regression analysis results show that employee compensation expenses negatively affect firms’ performance. these results contradict Nwanne (2016), Walker (2019), and Tulcanaza-Prieto et al. (2020). Similarly, social and community expenses negatively and significantly impact the performance of Indian manufacturing firms. These results consist with Gangi et al. (2018), Tulcanaza Prieto et al. (2020), Kvasić et al. (2016), and Nwanne (2016). On the contrary, donation-related expenses positively affect the profitability of Indian manufacturing firms. These results are consistent with Nwanne (2016), and Gangi et al. (2018). Therefore, this study has three folds of contributions. Firstly, it attempts to unveil corporate social responsibility (CSR) expenditures after the Companies Act, 2013 using a large sample and a longer period of study and making a comparison between mature and young firms Indian manufacturing companies. Secondly, this study examines the impact of the COVID-19 pandemic on CSR expenditures. Finally, hardly any study has relied on secondary data for conducting sustainability or CSR expenditure research in the Indian context. Hence, this study addresses this void by relying on secondary data to examine CSR expenditures during the pandemic.

Keywords: Sustainability Expenditures, Indian Manufacturing Companies, India

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: L6

Received: 28.11.2023
Accepted: 02.04.2024
Published online: 04.04.2024

How to cite this paper: Farhan, N. H. S. (2024). Exploring corporate social responsibility expenditures in manufacturing firms. Journal of Governance & Regulation, 13(2), 8–22. https://doi.org/10.22495/jgrv13i2art1