Monitoring abnormality in returns of companies around corporate social responsibility esg-rating

Abstract

This study will analyze whether and how corporate social responsibility affects the financial performance of the listed companies. According to agency theory, Corporate Social Responsibility engagement should be negatively related to financial performance. By contrast, from the stakeholder perspective and according to the resource-based view, Corporate Social Responsibility should positively impact companies’ financial performance. Net interest income and profitability increase with the increase in the social performance of banks; as stated by previous research work at the same time, Corporate Social Responsibility is negatively related to non-performing loans. Therefore, this research analyzes the relation between two in Indian companies’ corporate social responsibilities and performance compared to the trade-off model.