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Interrelationship aspects

between CSR and Financial
Study of Indian Cos
Chakka Surya Prakash

companies today take CSR into account when planning for future businesses Increased CSR practices by corporations have also raised the question “being good in business” also leads to “good business results” A business case for CSR involves the linkage of social investments to the economic performance of a firm.Introduction       Given the emphasis on the issue of social welfare. In other words it is the causal link between CSP (corporate social performance) and CFP (corporate financial performance) The relationship is neither simple nor linear Several studies point towards a a positive relationship Though there are several studies that it is an important issue. the search for the relationship remains inconclusive .

Sanan. Using regression methods the data was analyzed. Title of the article Journal/report where published Objectives/majo Variables/metho Findings of the r issues dology used study discussed in the article 1. et al.Review of literature Author Year of Publication. (2014). The link between the two is uncertain.N. Used regression tools to examine the data set Examined the across multiple universal CSP-CFP countries using The results of the study point out that there is no significant relationship between CSP and CFP.. They found the CSP-CFP link is not significant . Walsh JP. (2003). 2. “Misery loves companies – rethinking social initiatives by Using empirical analysis examines the inter related aspects between CFP and CSP. “Good business versus being good in business” – Relationship between financial performance and CSR in India To extend the earlier research on the relationship between CFP and CSP in the Indian context. Margolis JD.

however it is only 30 companies listed in BSE fom the BSE-30 Index. but the question still remain unanswered  A study by Sanan is recent and focused on Indian companies.Summary of review Numerous studies have been carried out to study this important issue of the link between CSP and CFP.  In addition larger data set could also have been taken  .  Longer period to examine the data could have been proven.  Only the financial year 2009-2010 was used for the study.

The corporate annual reports for the financial years from 2011 through 2013 are used as main source  The assessment parameters are also beyond the ones used in prior studies  The study is unique since it is applied to the Indian context using BSE 500 companies and larger data set across 3 years  .Objectives Purpose of this study is to empirically examine the inter related aspects of CSP and CFP among 500 Indian companies listed in the BSE 500 Index.

2012-2013 and 2011-2012  Secondary data source is used as a main source  Atleast 20+ assessment parameters are used to measure the linkage  .Data source A sample study of 500 companies (BSE 500) listed on Bombay Stock Exchange (BSE) is selected for the year 2013-2014.

The annual reports are carefully examined individually This research will study 2 models.Research Methodology         The study focuses on the companies in the BSE 500 because of easy accessibility of annual reports and reliability of data pertaining to their performance BSE 500 is chosen since it is well established Annual reports are assessed from the companies official website. One with CSP as an independent variable and another in which CSP as an dependent variable. The CSP score is based on the the information provided by the firm in their annual reports. This study assumes the independent variable has been lagged by 1 year between the CSP and CFP impact The study conducted inferential statistical analysis using SPSS for hypothesis testing .

but these factors were not examined due to non-availability of data  The CSP-CFP research is nascent in India and hence the linkage is uncertain  It is important to extend this study over a longer study period to examine the trajectory of this relationship  .Possible Limitations Other factors and parameters could have an influence on the CSP.

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