Purpose This paper aims to empirically investigate the moderating role of corporate governance (CG) in the capital structure-performance relationship.
Design/methodology/approach The analysis is based on top Business Today-500 companies and covers a time span of 10 years. The fixed effect panel regression model is used to examine the impact of CG mechanisms on the relationship between capital structure and firm performance.
Findings The core findings of the study indicate significant positive moderating role of board independence, board size and family ownership on the relationship between leverage and performance.
Practical implications The results enable the managers of Indian firms to comprehend the significance of CG framework while taking financing decisions. The findings encourage managers to raise debt funds in those firms that adhere to good governance norms.
Originality/value Unlike extant studies that emphasize on the moderating impact of single CG variable in leverage-performance relationship, the current work comprehensively examines the role of many CG factors that moderate the relationship between capital structure and firm performance. To the best of the authors' knowledge, the present study is the first of its kind with respect to India.
Purpose This study aims to examine the pattern of corporate social responsibility expenditure (CSRE) incurred by Indian companies after the inception of Companies Act 2013. It also highlights the resultant change brought in the corporate social responsibility (CSR) spends of the companies because of COVID-19 pandemic.
Design/methodology/approach The CSR index provided by the Ministry of Corporate Affairs under Companies (CSR Policy) Rules 2014, is adopted to measure the extent of CSRE made by top 30 Indian companies listed on Bombay Stock Exchange. To study the pattern of CSRE in various domains mentioned in the CSR index, the study is conducted over four points of time. Three alternative years since the commencement of the Companies Act 2013 i.e. 2014–2015, 2016–2017 and 2018–2019 have been taken up. Additionally, the financial year 2019–2020 is included as it marks the inception of the COVID-19 pandemic.
Findings The findings show that the CSRE made by companies is increasing every year over all points of time taken in the study. In addition to this, Indian companies have voluntarily contributed a substantial amount towards COVID-19 relief over and above the required mandatory limits.
Practical implications The gradual increase in CSR contributions even above the mandated amount and voluntary contribution towards COVID-19 relief by Indian companies implies that the nature of CSR in India is still philanthropic.
Originality/value The study contributes to the CSR literature after the implementation of the mandatory CSR provisions in India and in the wake of the global pandemic caused by COVID-19 as so far there is no such study available in the extant literature.
Purpose: Companies Act, 2013, has brought a revolution in the regime of corporate social responsibility (CSR) disclosure in India, making it a mandatory practice for the corporate sector. The purpose of this article is to examine the impact of statutory provisions on the extent of CSR disclosure in India. Design/methodology/approach: This article considers an effective sample of 144 companies selected on the basis of average market capitalisation. The study relates to the year 2015–2016, which represents the time period when companies started reporting CSR issues mandatorily. CSR disclosure scores are calculated by using content analysis. Both univariate and multiple regression models are applied to check the effect of statutory provisions on CSR disclosure. Findings: The results indicate that variables namely NETWORTH, TURNOVER and DOMESTIC dummy have positive and statistically significant impact on CSR disclosure scores. However, TOBINSQ, representing profitability of companies, has negative and statistically significant impact on CSR disclosure scores, thus leading to anxious results. Research limitations/implications: Factors affecting CSR disclosure score have been selected on the basis of new statutory provisions introduced by the Ministry of Corporate Affairs. Certain other vital attributes, especially related to corporate governance variables, too can be controlled for so that results have strong implications for companies. Practical implications: The empirical findings of this article implicate that institutional setup of a country has a strong bearing on the disclosure practices of the corporate sector. Thus, the authors strongly recommend to the statutory bodies that it is not sufficient just to make statutes but their implementation too should be ensured. Originality/value: With specific reference to India, mandating CSR disclosure is a recent law; so, the current study being first of its kind, would definitely add to the available literature and open gateways for future research.
PurposeThis paper aims to examine and compare the nature and extent of corporate social responsibility (CSR) reporting practices of companies in developing (BRICS [Brazil, Russia, India, China and South Africa]) and developed (the USA and the UK) countries.Design/methodology/approachContent analysis is conducted on the annual reports and websites of 325 companies listed on stock exchanges of developing markets and of developed markets (Brazil – IBrX 100, 46 companies; Russia – Broad Market Index, 50 companies; India – BSE 100, 50 companies; China – SSE 180, 29 companies; South Africa – FTSE/JSE All Share index, 50 companies; the USA – NYSE 100, 50 companies; the UK – FTSE 100, 50 companies). Descriptives are used to calculate company wise and item wise scores.T-test analysis is applied to check for significant differences between mean scores of developing and developed countries.FindingsThe findings of the study reflect that developed countries have higher CSR disclosure scores than developing countries. Overall, mean CSR disclosure score of developed countries is 53.5%, followed by that of the developing countries at 49.4%. Developed countries take lead in CSR disclosure for all the five categories, namely, human resources, community, environment, customer and product and others. The results of independent sampleT-test suggest that mean disclosure score of developing nations is significantly different from developed nations.Practical implicationsAs suggested by the results, the gap in the CSR disclosure scores between developing and developed group of countries is not an alarming one. However, developing countries should practice CSR in spirit and not just in letter. Focus should not be on just filling the pages in black and white, rather the essence of CSR should be attained for balanced development of the country. For instance, though developing country like India has high score of CSR disclosure in contrast to each of the developed country taken in the sample, yet the country is still battling with several issues such as poverty, over-population, corruption, poor standard of working conditions for the employees and environmental conservation. Sustenance should focus upon renewable sources of energy; efforts of employees should be acknowledged offering flexible working hours; consumer trust should be built by communicating authentic and accurate information about the product. As developing countries encounter several social and environmental problems, companies must endeavor to build a healthy nation keeping in mind the welfare of all stakeholders by practicing CSR.Originality/valueThis study overcomes the limitations of prior cross-country studies by taking a better representative sample with greater number of countries belonging to identifiable group of "developing" and "developed" nations and thus attempts to improve generalization and authenticity of results.
Purpose This paper aims to investigate and compare the sustainability reporting practices of companies in developing nations (BRIC) with those in the developed economies (the UK and USA) as per GRI framework.
Design/methodology/approach Content analysis has been applied on a sample of 232 companies listed on the Stock Exchanges of developing and developed countries (Brazil – BOVESPA index, 39 companies; Russia – RTS index, 21 companies; India – SENSEX, 17 companies; China – SSE 50, 19 companies; the USA – NASDAQ 100 and Amex major market index, 58 companies and the UK – FTSE100, 78 companies). It uses descriptive statistics and independent sample t-test to identify significant comparisons.
Findings The findings of this paper suggest that developing nations are providing more information on sustainability practices as compared to the companies in the developed nations. Overall mean disclosure score of developing countries is 59.04 per cent followed by that of the developed countries at 36.47 per cent. The result of independent sample t-test shows these differences significant at 1 per cent level.
Practical implications The results of the current paper implicate that the corporate managers of the developing nations should prefer rational and purposive reporting. They should work on the quality of reporting rather than just filling pages because social and environmental issues are more gross in the developing nations as compared to the developed countries.
Originality/value Developing and developed nations jointly use the scarce resources and provide output to the world, thereby raising sustenance issues. However, not even a single study was found while reviewing the literature that studied and compared the sustainability reporting practices of these countries.
The aim of this article is to analyze and compare the nature, extent and pattern of diversification of domestic and multi-national companies (MNCs). A total of 536 companies from BS-1000 (March, 2012) form the sample of the study. The diversification move has been studied over a period of 10 years from 2001 to 2011. Firms are classified into four categories on the basis of Jacquemin–Berry entropy-index measure (1979) as Very Low Diversified (VLD), Related Diversified (RD), Unrelated Diversified (UD) and Very High Diversified (VHD). In order to check the difference in the extent of diversification, chi-square statistic has been employed. The article identifies that both MNCs and domestic companies are following diversification strategy, although the extent of diversification is higher in the case of MNCs than their domestic counterparts. 'Related diversification' is the most preferred strategy for both the groups. Further, both the groups follow an irregular pattern of diversification, although Indian companies prefer faster and forward movement, while MNCs are comparatively sluggish with their moves.
The present study seeks to assess the extent and level of sustainability reporting among Chinese companies. For this purpose, an Index developed under global reporting initiative (GRI) guidelines is used. A total of 19 companies from Shanghai Stock Exchange (SSE) 50 (China) producing sustainability reports within the time period 2006–2007 to 2010–2011 comprise the sample set. Content analysis is applied as a data collection tool. Descriptives are used to examine the concrete content of these sustainability reports at three levels: company-wise, industry-wise and category-wise. The company-wise disclosure analysis reveals that Baosteel has the highest disclosure score of 66.46 per cent followed by China Shenhua Energy (65.82 per cent) and then by Air China with 63.29 per cent score. Industry-wise analysis shows Automobiles & Transport industry has the highest disclosure score of 50 per cent. However, the Finance sector has the least disclosure score of just 22.26 per cent. Category-wise analysis shows that economic parameters are reported the most. Further, one-way analysis of variance (ANOVA) is applied for category-wise analysis and significant difference is found. Kruskal–Wallis test is applied for industry-wise analysis but no significant difference is found. This study attempts to provide an insight to corporate managers in China so that they can make rational policies for sustenance. However, since this article is confined to China only, future research involving other countries is recommended.
Economic and social performances are the two strong pillars of sustainable corporate growth. The companies in India are now showing a genuine interest in the upliftment of the stakeholders they serve. They have started giving Corporate Social Responsibility (CSR) a place in their overall strategies of growth. This paper studies the extent of CSR disclosure made by leading companies constituting BSE SENSEX in India. The disclosure practices of 25 of these companies have been studied for the year 2009–2010 by preparing a CSR Index. Content Analysis has been used. Company-wise score and item-wise score has been calculated. The results show that the CSR disclosure by the leading companies in India is low. The company-wise mean disclosure is just 31 per cent while the category-wise mean disclosure is 40.32 per cent. The category of 'Others' followed by 'Environment' and then 'Community Involvement' are the most well-disclosed areas.
Companies are making ample efforts to shrink unsustainable practices and for this the best method is to be accountable by providing sustainability reports. The present study seeks to assess the extent and level of sustainability reporting in India. For this purpose, 14 companies producing separate sustainability report (2010-11) out of 30 SENSEX companies comprise the sample set. Content analysis has been applied as a data collection tool. Descriptive analysis of these sustainability reports have been done at three levels- company-wise, industry-wise and categorywise. The company-wise disclosure analysis reveals that TATA Steel has secured the highest rank shared by Tata Consultancy Services while industry-wise analysis shows that Computer Software is the highest reported industry group. Further one way ANOVA has been applied for inter-industry wise disclosure but no significant difference was found. Category-wise analysis indicates that companies disclose about their �Strategy & analysis� the most.
