Ownership and corporate social responsibility in Indian firms

<p>Purpose</p> <p>The purpose of this paper is to look at the association between different ownership categories and corporate social responsibility (CSR) spending of selected Indian firms.</p> <p>Design/methodology/approach</p> <p>Random-effects Tobit panel regression is performed on a panel of 4,388 firm years of 1,722 unique firms over a three-year period (2014-2016).</p> <p>Findings</p> <p>Different categories of institutional investors have different preferences for CSR spending of a firm. Promoters of business-group affiliated and unaffiliated firms also behave differently towards CSR activities of their firms.</p> <p>Research limitations/implications</p> <p>Heterogeneous behavior of institutional investors is revealed through the study. Foreign institutions and domestic banks are supportive of CSR investments of a firm. Promoters of family firms and group affiliates also diligently plan CSR activities.</p> <p>Practical implications</p> <p>Managers cannot ignore the heterogeneities of institutional investors in their investment decisions. Individual investors can align their philanthropic preferences with those of different types of institutional investors or firms.</p> <p>Social implications</p> <p>Family-owned firms play a significant role in CSR activities of emerging economies, while individual promoters are not as attracted by the reputational prospects of CSR.</p> <p>Originality/value</p> <p>This paper considers the role of heterogeneities of institutional investors in influencing CSR spending of emerging-economy firms. This heterogeneity has not been previously studied in this context.</p>