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<p>This study examines the relationship between Corporate Social Responsibility (CSR) disclosure and financial performance in India’s mandatory CSR framework. Using panel data of firms listed on the NIFTY 500 index, this study employs two-way fixed-effects regression and a random intercept cross-lagged panel model (RI-CLPM) to address endogeneity concerns and establish temporal precedence. The findings indicate that CSR disclosure is positively related to both return on equity and Tobin’s Q, but it shows no significant association with return on assets. The findings support the prevailing assumption of a positive relationship between CSR disclosure and shareholder value while underscoring its operational inefficiencies. The analysis also reveals heterogeneity of CSR disclosure impacts across industries. Our study contributes to CSR literature by providing empirical evidence from a regulatory-driven CSR environment, which is particularly relevant as more countries adopt mandatory CSR frameworks. The research offers policymakers and corporate managers practical insights into optimizing resource allocation. The findings suggest that strategic CSR disclosure should align with core business objectives to optimize financial and social outcomes while recognizing the differential impact of various financial performance metrics.</p>

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Impact of mandatory corporate social responsibility disclosure on financial performance of Indian listed companies

  • 期刊论文

  • 出版模式：

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  • 发表日期：

    2026年6月25日

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  • Kamal Krishna Sharma,
  • Sanjay Kumar,
  • Satyaban Sahoo

摘要

This study examines the relationship between Corporate Social Responsibility (CSR) disclosure and financial performance in India’s mandatory CSR framework. Using panel data of firms listed on the NIFTY 500 index, this study employs two-way fixed-effects regression and a random intercept cross-lagged panel model (RI-CLPM) to address endogeneity concerns and establish temporal precedence. The findings indicate that CSR disclosure is positively related to both return on equity and Tobin’s Q, but it shows no significant association with return on assets. The findings support the prevailing assumption of a positive relationship between CSR disclosure and shareholder value while underscoring its operational inefficiencies. The analysis also reveals heterogeneity of CSR disclosure impacts across industries. Our study contributes to CSR literature by providing empirical evidence from a regulatory-driven CSR environment, which is particularly relevant as more countries adopt mandatory CSR frameworks. The research offers policymakers and corporate managers practical insights into optimizing resource allocation. The findings suggest that strategic CSR disclosure should align with core business objectives to optimize financial and social outcomes while recognizing the differential impact of various financial performance metrics.