Ownership Characteristics,Corporate Social Responsibility, Resource Productivity And Firm Performance: An Empirical Study

Abstract

Corporate governance continues to be at the forefront as evinced by some of the recent incidents at organisations such as Tata Sons, Yes Bank and ICICI bank. Traditionally, ownership characteristics have been considered as close substitutes representing corporate governance, considering that board processes and activity do not yield themselves to much scrutiny beyond a few media reports and analysis. The research article undertakes a study of ownership, corporate social responsibility(CSR) and resource productivity in the Indian context. Using a sample of 900 firms from the non-financial domain, the study uses multivariate regression to identify the effect on market based measure of firm performance. Results indicate that all the ownership variables have a positive and significant influence on market based metrics of organisations. However, the CSR orientation or intent does not indicate any impact on organisation’s market based metric. The resource productivity, on the hand is strongly positive, indicating that markets recognise, intuitively the impact of competencies and capabilities of people. For practitioners, the implications are the quest to identify further levers of strategic and competitive advantage since the governance indicators have merely explained a small part of firm performance.