Financial resources, corporate social responsibility, and ownership type: Evidence from India

Shobha Tewari () and Bibek Bhattacharya ()
Additional contact information
Shobha Tewari: Strategy Area, Indian Institute of Management Kashipur
Bibek Bhattacharya: Strategy Area, Indian Institute of Management Bangalore

Asia Pacific Journal of Management, 2023, vol. 40, issue 3, No 9, 1093-1132

Abstract: Abstract Prior research on the relationship between financial resource availability and corporate social responsibility (CSR) has presented contrasting theoretical arguments and evidence. While the relationship has been theorized to be positive in developed countries, it has been argued to be negative in emerging economies due to institutional differences. However, prior theorization in the context of emerging economies has failed to consider the possibility of a non-monotonic relationship between financial resources and CSR. Although due to the high costs of obtaining external finance in emerging economies, firms may choose to prioritize capital retention over engaging in CSR activities when financial resource availability is low, this behavior is likely to change beyond a point when the level of available financial resources has crossed a reasonable threshold. In this paper, we develop this perspective and predict a U-shaped relationship between financial resource availability and CSR in emerging economies. We test and find support for this prediction on a sample of the top 500 listed firms in India. Further, we also predict and find that three dominant ownership structures (i.e., family ownership, business group affiliation, and state ownership) differentially condition this relationship.

Keywords: CSR; Institutional voids; Emerging markets; Financial Resources; Family Firms; Business groups; State Ownership (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10490-022-09810-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:asiapa:v:40:y:2023:i:3:d:10.1007_s10490-022-09810-3

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/10490/PS2

DOI: 10.1007/s10490-022-09810-3

Access Statistics for this article

Asia Pacific Journal of Management is currently edited by Jane Lu

More articles in Asia Pacific Journal of Management from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().