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Corporate social responsibility spending as a building block for sustainable corporate ethical identity: Lessons from Indian business groups

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  • Shantanu Dutta
  • Supriya Katti
  • B. V. Phani
  • Pengcheng Zhu

Abstract

We examine the cost implications of using corporate social responsibility (CSR) as a vehicle to build sustainable corporate ethical identity (CEI). CSR investment is recognized as one of the effective channels to promote a firm's CEI. However, excessive CSR could divert resources from other strategic projects, and shareholder may not favor such initiatives. We address this managerial dilemma with a unique Indian CSR regulatory environment. Our results show that firms with greater reputational concerns have a higher proclivity to meet the mandatory CSR investment level but are reluctant to exceed the mandatory CSR limit due to absence of incremental financial benefits.

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  • Shantanu Dutta & Supriya Katti & B. V. Phani & Pengcheng Zhu, 2022. "Corporate social responsibility spending as a building block for sustainable corporate ethical identity: Lessons from Indian business groups," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(3), pages 696-717, April.
    • Handle: RePEc:wly:mgtdec:v:43:y:2022:i:3:p:696-717
    DOI: 10.1002/mde.3412
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