Investor Perspectives: Evaluating the Impact of CSR on Excess Returns in Financial Companies

Sakshi Sachdeva () and Latha Ramesh ()
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Sakshi Sachdeva: Christ University
Latha Ramesh: Christ University

Chapter Chapter 10 in Financial Markets and Corporate Finance, 2024, pp 185-205 from Springer

Abstract: Abstract This research aims to provide insights into Corporate social responsibility (CSR) performance and its impact on portfolio performance. The research would contribute to the broader understanding of how investors can achieve financial success and positive societal impact through the CSR performance of financial companies. This study uses 56 financial companies’ data from 2013–2014 to 2021–2022. Seemingly unrelated regression has been used to examine the impact of FAMA and French factors on the return of different portfolios. The findings of this research are significant for Banks and NBFCs, which shows that all the factors of the FAMA and French model are significant in showing the portfolios’ results. This study demonstrates that banks with better CSR performance yield higher expected returns than NBFC portfolios. This finding confirms that increased socially responsible activities yield better returns for banks. It showed that more socially responsible companies provide better financial returns than those not focusing on these issues. This suggests that when companies invest in being responsible and doing good for society, it can lead to better financial results for them and the investors.

Keywords: CSR; Net Interest Margin; FAMA and French; Risk; Return; Portfolio (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-981-97-6242-2_10

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DOI: 10.1007/978-981-97-6242-2_10

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