1Professor in School of Management Studies & Dean (Academic Affairs) at, Motilal Nehru National Institute of Technology Allahabad, Allahabad, Uttar Pradesh, India, geetikamnnit@gmail.com
2Research Scholar in School of Management Studies at, Motilal Nehru National Institute of Technology Allahabad, Allahabad, Uttar Pradesh, India, akankshashk4@gmail.com
3Research Scholar in, School of Management Studies at Motilal Nehru National Institute of Technology, Allahabad, Allahabad, Uttar Pradesh, India, attanuagarwal2105@gmail.com
JEL Classification Code: M14
The issue of corporate social responsibility (CSR) has taken front seat in the forum of issues related with good governance practices. It remains no longer a matter of choice for corporate, as various international bodies, government authorities and regulators are taking cognizance of the matter and framing guidelines to be adopted by the corporate. In India, Companies Act, 2013, has mandated a certain amount of expenditure for all the firms that lie within the category defined as per net worth and profits. In addition, foreign investment is encouraged in the country for its economic growth. This paper attempts to determine the linkage between CSR and Foreign Institutional Investment (FII). The research considers case study of energy firms of India listed in BSE500 list as per market capitalisation. The study is based on secondary data for the period from 2010 to 2015. Two measures of CSR such as CSR expenditure and CSR disclosure (CSRD) are used, whereas extent of foreign investment is measured using FII Holdings (FIIH). The results show a strong bidirectional relationship between CSRD and FIIH initially however later it turns out to be uni directional from FIIH to CSRD. The research has implications for top management of the firms to design and disclose their CSR strategies in such a way that foreign investors are attracted to invest in it.
Corporate social responsibility, Foreign institutional investor holding, Energy firms, India, Granger causality test
