Project Description:
This project proposes to examine the determinants of corporate social responsibility (CSR) expenditures as well as the CSR portfolio configurations of Indian firms that are affiliated to business groups. CSR in India is an interesting research setting as India is the first country to mandate CSR spending for firms that meet a certain size and profitability threshold. As part of this recent legislation, that came into effect in 2013, firms are required to spend at least 2% of their profits on CSR (Gatignon & Bode, 2023). Interestingly, there is no penalty for not meeting this 2% requirement (Gatti et al., 2019). However, as part of this legislation, firms are required to provide detailed information on their CSR activities in their annual reports. In my prior research on this topic, I found that ownership is an important determinant of the total amount spent on CSR as well as the configuration of the firm’s CSR portfolio. In this follow-up research project, I want to focus on one specific type of firm, those affiliated with business groups, and understand the dynamics between firms within the same business group as well as those across business groups. Business groups (BGs) are a set of private-sector firms under common control but with different sets of owners that generally take coordinated actions. Affiliation with a BG serves as an internal market of financial and human capital, products, and technology for affiliated firms. BGs are more prominent in emerging markets than in advanced countries as they help overcome institutional voids (i.e., overall informal institutions with weak enforcement and protection of rules and regulations). Firms affiliated with a BG face pressures to confirm to the overarching strategic decisions taken by the group, including those related to CSR, however, they also have to be distinct from the other affiliated firms within the group due to differing pressures from various stakeholders as well as industry- and market- specific competitive pressures. This project proposes to refine the current understanding of the trade-off between conformity and distinctiveness for firms affiliated with business groups.
Prerequisites
Understanding of basic data collection and statistical analysis. Tasks the student will work on: Data collection from the CSR disclosures in the Annual Reports of firms affiliated with business groups in India. Subsequently, the student will help with the clean-up of the collected data and will help with preliminary data analysis using STATA, a statistical software.
Special Comments
During summer, the student will be able to do this work remotely, if needed. The student has an option to continue working on the project in Fall 2024 as part of a Directed Research course. If the student is engaged and makes significant contributions to the manuscript, during the research process, they may be to invited join as a co-author.
Project Information
Estimated Start Date: 6/1/24
Estimated End Date: 8/9/24
Maximum number of students sought: 1
Contact Information: Prof. Pooja Thakur-Wernz (pthakur-wernz@wlu.edu)