Determinants and Consequences of Corporate Social Responsibility: Evidence from the Revision of the Company Act in India

Woong Lee

No 17-1, Working Papers from Korea Institute for International Economic Policy

Abstract: India is the first country to introduce mandatory CSR spending for eligible firms, based on the revision of the Companies Act in 2013. In this paper, I explore the effects of the revision of the Companies Act in India on the likelihood of a firm's CSR participation and its profit. It is the first work to investigate the effects of the provision of mandatory CSR. The results show that the revision increased the eligible firms' CSR incurrence by 2.3 percent-age points, compared to ineligible firms. The findings also indicate that the revision is effective to increase the eligible firms' profits by 3.5 percent, compared to the ineligible firms. Therefore, I suggest that profit-maximizing CSR and private provision of public goods through mandatory CSR are valid in India.

Keywords: Corporate Social Responsibility (CSR); The Companies Act of 2013; Mandatory CSR (search for similar items in EconPapers)
JEL-codes: D04 D22 H42 O10 O53 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2017-04-28
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Working Paper: Determinants and Consequences of Corporate Social Responsibility: Evidence from the Revision of the Company Act in India (2018)
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