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The Impact Of Mandated Corporate Social Responsibility: Evidence From India’S Companies Act Of 2013, Dhammika Dharmapala, Vikramaditya Khanna
The Impact Of Mandated Corporate Social Responsibility: Evidence From India’S Companies Act Of 2013, Dhammika Dharmapala, Vikramaditya Khanna
Law & Economics Working Papers
Firms’ Corporate Social Responsibility (CSR) activity has become the subject of a large literature in recent years. This paper analyzes CSR activity using quasi-experimental variation created by Section 135 of India’s Companies Act of 2013, which requires (on a “comply-or-explain” basis) that firms satisfying specific size or profit thresholds spend a minimum of 2% of their net profit on CSR. We examine effects along a number of different dimensions including firm value, CSR spending, and other outcomes, as well as exploring broader theoretical implications. Our analysis uses financial statement and stock price data on Indian firms from the Prowess database, …