Nexus of Corporate Social Responsibility Expenditure (CSR) and financial performance: Indian banks

This paper investigates the influence of mandatory Corporate Social Responsibility (CSR) expenditure, as stipulated by the Indian Companies Act of 2013, on the financial performance of commercial banks in India. Employing Panel regression models, the study examines the association between CSR expenditure and the financial performance of 22 Indian banks from 2016 to 2022. To measure financial performance, three different profitability indicators and market returns are utilized as proxies. Additionally, four control variables, namely size, risk, age, and capital intensity, are incorporated for robustness analysis. The findings reveal a positive impact of CSR expenditure on the profitability of Indian banks. However, no significant relationship is observed between CSR expenditure and the market returns of the Indian banks.& COPY; 2023 Board of Trustees of the University of Illinois. Published by Elsevier Inc. All rights reserved.