Corporate Governance and CSR Performance: An Empirical Analysis of Indian SmallCap Firms

Drawing on Stakeholder, Agency and Resource Dependence theories, this study examines how board characteristics shape corporate social responsibility (CSR) expenditure among Indian S&P BSE SmallCap firms under a mandatory CSR regime. Using panel data from 280 firms (FY2014–FY2020) and pooled ordinary least squares, fixed/random effects and instrumental variable regressions, results show board size, firm size, market valuation and liquidity positively influence CSR, while board independence has a limited impact overall but negative effects in medium firms; meeting frequency is insignificant. To capture heterogeneity, firms are stratified into small, medium and large SmallCaps. Stratified quantile regression reveals distinct governance–CSR dynamics: larger firms benefit more from board structure and financial strength, while operational efficiency and capital structure matter more in smaller and medium firms. Findings challenge the assumption that independence alone drives CSR and highlight scale-sensitive governance strategies in emerging markets. This study contributes in three ways. First, it introduces stratified quantile regression to foreground size-contingent heterogeneity in CSR drivers. Second, it extends governance–CSR analysis to Indian SmallCap firms, a segment often overlooked despite regulatory relevance. Third, by integrating multiple theoretical perspectives, it offers a richer lens to interpret both expected and counterintuitive findings, advancing governance–CSR scholarship in emerging markets.