The curvilinear relationship between corporate social performance and financial performance: Evidence from Indian companies

Abstract

Purpose

The relationship between corporate social responsibility (CSR) and financial performance (FP) has bourgeoned widespread debate among researchers. In recent years, the debate has explored more dynamic links, one of which is the curvilinear relationship, between CSR and FP. This paper aims to empirically test the curvilinear relationship between CSR and FP in the context of Indian companies.

Design/methodology/approach

This paper empirically tests the curvilinear relationship between CSR and FP in the context of Indian companies. The study used a panel data of 43 listed companies over a period of ten years from 2008 to 2017. A correlation and panel regression were carried out to examine the possible link.

Findings

The findings demonstrate that a curvilinear relationship exists between CSR and FP, suggesting that two long competing viewpoints may be complementary.

Research limitations/implications

The study mainly focuses on top companies, so the generalizations of results to other small companies are unwanted.

Practical implications

An immediate managerial implication of the findings suggests that to serve the interests of the shareholders, a long-run planning and considerable resources should be dedicated at this direction, given that CSR expenditure does not pay off immediately.

Originality/value

In the Indian context, very few studies have analyzed the linkages between CSR and FP. Using an improved and distinctive approach, the study empirically tests the relationship between CSR and FP from non-linear perspective.

Citation

Maqbool, S. and Bakr, A. (2019), "The curvilinear relationship between corporate social performance and financial performance: Evidence from Indian companies", Journal of Global Responsibility, Vol. 10 No. 1, pp. 87-100. https://doi.org/10.1108/JGR-11-2018-0060