Does a Government Mandate Crowd Out Voluntary Corporate Social Responsibility? Evidence from India

• 成果类型: Article
• 署名作者: Rajgopal, Shivaram; Tantri, Prasanna
• 署名单位: Columbia University; Indian School of Business (ISB)
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/1475-679X.12461
• 发表日期: 2023
• 页码: 415-447
• 关键词: economic consequences; financial performance; companies act; disclosure; IMPACT; audit

摘要

This study investigates the implementation of a Government of India mandate that requires firms to spend at least 2% of their profits on corporate social responsibility (CSR). The results show that qualifying firms that voluntarily engaged in CSR before the mandate reduce their CSR spending afterward. Despite increasing advertisement expenditure likely to offset the lost signaling value of voluntary CSR, stock prices and operating performance of former voluntary CSR spenders who qualify under the law decline. Our results suggest that regulatory intervention in CSR can both diminish its signaling value and lead to a reduction in voluntary CSR spending.