Determinants of corporate social responsibility (CSR) activities during the COVID-19 period: evidence from an emerging economy

The aim of this study is to identify firm-specific factors influencing corporate social responsibility (CSR) expenditures during the COVID-19 pandemic based on an emerging economy, Bangladesh. Analyzing data from 174 listed companies in 2020 and 2021, along with semi-structured interviews with board members from 10 firms, this research finds significant positive associations between CSR expenditures and factors such as firm size, age, profitability, leverage, cash position, and corporate governance. The results are robust to the alternative measure of CSR activities. Additionally, external regulations emerged as a key driver of increased CSR during the pandemic. As a unique crisis, COVID-19 has devastated the whole economy with diverse impacts and increased CSR during tough times will enable the firms to achieve legitimacy and mitigate information asymmetry by fulfilling the requirements of various stakeholder groups. The findings of this study can guide regulators and practitioners in developing policies that connect CSR with firm-specific factors for future crisis management. Mandating CSR during crises can effectively encourage companies to contribute to societal needs. This research is one of the pioneering initiatives to rigorously assess the determinants of CSR activities during the pandemic using a mixed-method approach.