Corporate social responsibility – marketing nexus: evidence from India’s Companies Act of 2013

Purpose - The purpose of this study is to empirically examine whether Indian firms use the breadth of corporate social responsibility (CSR) activity as a substitute for their marketing activities under the mandatory norms. Design/methodology/approach - Two strategic marketing levers, namely, the firm’s advertising and research and development (R&D) intensity, have been used as proxies for a firm’s marketing activity. A sample of 389 Bombay Stock Exchange-listed firms from 2016 to 2021 have been examined through a fixed effects regression model to test the hypotheses. Propensity score matching and Heckman’s two-stage approach have been used to overcome the problem of endogeneity. Findings - The findings deduced from the empirical evidence demonstrate that both the advertising intensity and R&D intensity share a negative relationship with CSR breadth under the mandatory norms, though the relationship between R&D intensity and CSR breadth is not statistically significant. Overall, the findings are consistent with resource dependency and legitimacy theory and imply that firms can gain more exposure and can afford to reduce their advertising spending by focusing more on CSR spending across multiple activities under mandatory norms. Practical implications - Instead of looking at the CSR spending mandate as a new form of tax, firms can take advantage of their CSR spending by involving themselves in more activities and look at their CSR spending as a strategic marketing activity. Social implications - Expanding the scope of their CSR efforts enables firms to benefit a wider array of societal sectors through their spending, aligning with the foremost aim of the CSR mandate. Originality/value - This is among the pioneering attempts to examine the CSR-marketing nexus under the mandatory CSR spending norms, concentrating on the focus of CSR activity rather than the amount that firms spend on CSR activity.