This study investigates the relationship between corporate social responsibility (CSR) and financial performance of chemical companies in India. With increasing regulatory pressures and societal expectations, CSR has become a critical component of business strategy, particularly in environmentally sensitive industries like chemicals. The study employs a panel data approach, using financial and CSR data from a sample of Indian chemical firms over a period of ten years (2014-2023). The analysis is conducted through the fixed effects model, which was chosen based on the results of the Hausman test. Financial performance is measured using return on assets (ROA), while CSR is captured through CSR expenditure. The findings reveal a positive and significant relationship between CSR spending and financial performance, indicating that companies engaging more actively in CSR activities tend to perform better financially. Larger firms show stronger effects, suggesting that company size amplifies the benefits of CSR. Control variable (leverage) are also examined, with leverage negatively impacting financial performance.
Ray et al. (Thu,) studied this question.
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