RELATIONSHIP BETWEEN CSR AND FINANCIAL PERFORMANCE: EMPIRICAL ANALYSIS

Abstract

A business firm has many responsibilities in addition to producing and marketing goods and services at profit. Business Corporations are more than merely economic institutions. They are responsible to the shareholders and various stakeholders like customers, employees, suppliers, Government, community, etc. As a corporate citizen, it must fulfill its economical, legal, ethical and discretionary responsibilities. The modern perspective focuses on long–term interests of stakeholders and sustainable development.   Therefore, comes the concept of CSR. The term CORPORATE SOCIAL RESPONSIBILTY forms an integrated combination of policies, programmes, education, practices which extend throughout a corporation’s operations and into the communities in which they operate. It is based on the idea that business has social obligations beyond earning profits. Our paper aims to empirically prove relationship among CSR practices followed by companies and its affect on PAT using regression model. Using past five year data on CSR expenditure and PAT among 30 Indian companies it is observed that there is constructive and significant relationship among both.