*Research Scholar, Department of Commerce, Pondicherry University, Karaikal Campus, India
**Head, Department of Commerce, Sri Ram College, Veppampattu, Tiruvellore, India
***Assistant Professor, Department of Commerce, Sri Ram College, Veppampattu, India
Online published on 11 July, 2017.
The level of CSR initiatives by the Indian companies and its impact on the performance of the companies were analyzed in this study. The performance is measured in terms of financial parameters as well as performance in the stock market. The researchers have taken a sample of 15 companies from Pharmaceutical industry which are included in the BSE 500 Index and also ranked by Karmayog (an NGO, which measures the CSR activities of the Indian companies in India) to analyze the linkage between Corporate Social Responsibility (CSR) Initiatives with Financial as well as market Performance. The study is based on secondary data, collected from PROWESS a data base of CMIE. In the analysis, initially the year-wise level of CSR initiatives of selected companies was measured. CSR initiative scores for each selected company has been calculated based on the Karmayog ratings of CSR activities. To calculate score of a company, three key parameters were considered. They are, CSR ratings given by Karmayog-the company's allocation of fund for CSR activities in the Budget and finally the area of focus made by the company in their CSR activities or involvement. In the present study CSR Activities have been classified into Healthcare, Education, Environment, Rural development and Other Community Welfare activities. After calculating the score on CSR initiatives, an analysis on the relationship between CSR Score and selected financial parameters such as Total Assets, Net worth, Profit before Tax, Working Capital and EPS. All the variables of the selected companies have been tested with one way ANOVAs, Karl Pearson's correlation for its validity. The coefficient of determination has also been tested through curve estimation regression analysis and the authors found that CSR initiative score is significant with financial parameters except with EPS and stock market performances is also significant at 0.05 levels. The result of correlation coefficient between EPS and CSR initiative score is not significant, but these two variables have a role for predicting market capitalization of this industry.
Corporate social responsibility, CSR budget allocations, CSR Score, Financial performance, Stock performance, Pharmaceutical Industry
