Effect of CSR Expenditure on Profitability of a Company: Comparative Analysis Between Sail and Tata Steel Ltd. Through Regression Analysis

Abstract

Corporate social responsibility and ethics are the issues that have gained impetus in today’s vibrant business environment. Available literature depicts enough evidences to establishing effects of the amount spent on CSR activities with the profitability and the long-term survival of a firm are enormous .The present study examines the relationship between the amount spent on CSR activity and the profitability of an organization in long-run, especially post 2013 when CSR spending has been made a mandatory component of 1956 companies act by amending the previous 1956 companies act. The study uses secondary data (collected from official website of the company concerned and other related government websites available since 2017 till 2019) and applies regression analysis and ANOVA to investigate the effect of prescribed spending on CSR activity on the profitability of steel companies (SAIL & TATA Steel) operating in India. After making an analysis we found that there is a positive impact of CSR expenditure on the profitability of the company.