Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)

Abstract

Does the corporate social responsibility affect the financial performance of manufacturing and service industry in India?

Author(s): Raj Bahadur Sharma, Asha Sharma, Sajid Ali, Jyoti Dadhich

Corporate Social Responsibility is the commitment for the equitable and sustainable development of the community. In the growth of society, Corporate Social Responsibility (CSR) has had a huge influence and builds a healthy bond and a strong relationship. The company’s mainly focus on the three level of sustainable development–Environmental Preservation, Financial growth, and Social Development. The present study objective is to examine the impact of CSR on financial performance of selected manufacturing and service sector companies in India. The study also revealed the relationship between CSR score with ROE, ROA, and ROCE. The study considered financial data of the Indian manufacturing and service industry for the year 2008 to 2017. Correlation technique had been used to examine the relationship of CSR score and the financial parameters. The result the result shows that ROE, ROA, and ROCE have a negative correlation with CSR Score of Manufacturing Sector Companies. Whereas, ROE has positive correlation with CSR Score of Service Sector Companies together with ROA and ROCE have a strong a positive correlation with CSR Score of Service Sector Companies. Hence, this result suggests that there is no significant association between CSR Score and Financial Performance of Manufacturing Sector Companies.

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