Corporate Social Responsibility and Firm Performance
Keywords:
CSR, Firm Performance, ROE, ROA, ROSAbstract
As part of their responsibility to the society, companies engage in activities that benefit employees, suppliers, customers and society at large. These activities reduce the present value of the cash flows generated by the firm and thus reduce the return available to the shareholders. However, these activities may give better image to the company in the society and the firm value may be increased. Further, by virtue of the good image, the company may be able to record a better performance. In this study, it is tried to establish a relation between CSR spending and firm performance. It is also examined whether there is any difference in the quantum of CSR spending by companies of different sectors. The study is conducted with reference to thirty companies listed on the National Stock Exchange. The study found that there is no significant relation between CSR spending and firm performance. It also found that there is no difference in the quantum of spending on CSR activities by consumer goods, industrial goods and service sector companies.
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