Author(s): Felice Joy, Omal M, Athira Murali, Anusree M and Reena Francis
Purpose: This research aims to investigate the influence of economic, legal, and ethical factors, as well as the company's age and size, on corporate financial performance (CFP). It also seeks to explore the relationship between various dimensions of corporate social responsibility (CSR) activities, including Brand Awareness, CSR towards Customers, CSR towards Community, CSR towards Employees, CSR towards Investors, CSR towards Society, and CSR towards Stakeholders, on CFP. Additionally, the study aims to examine the mediating effect of factors such as Customers' Loyalty, Increases in Sales, Company Output, Public Image, and the Size and Age of the company on the relationship between CSR activities and CFP. Research Methodology: This study collected data from 500 companies operating in the states of Gujarat, Maharashtra, Rajasthan, and Madhya Pradesh. The data were analyzed using a combination of statistical tools, including SPSS for descriptive statistics and Smart PLS for structural equation modelling. The research employed both primary and secondary data sources to assess the financial performance of companies, their CSR activities, and other relevant variables. Limitations: The study acknowledges several limitations, including potential data collection biases, the use of self-reported CSR activity data, and the cross-sectional nature of the research, which limits the ability to draw causal conclusions. Additionally, the study may not capture the full spectrum of CSR activities and their impacts, as it focuses on specific dimensions. Implementation Findings: The findings reveal a complex interplay between CSR activities, economic, legal, and ethical factors, and the financial performance of companies. The mediating factors of CL, IS, OU, PI, and the company's Size and Age play significant roles in moderating this relationship. Specific CSR dimensions exhibit varying degrees of impact on CFP, highlighting the importance of tailoring CSR strategies to the unique context of each company. Conclusion: In conclusion, this research provides valuable insights into the relationship between CSR activities and corporate financial performance in the selected states of India. It underscores the importance of considering not only the direct impact of CSR activities but also the mediating factors that influence this relationship. Companies should strategically align their CSR initiatives with their economic, legal, and ethical context, while also considering their age and size, to maximize their positive impact on financial performance and overall sustainability. Further longitudinal and in-depth studies are recommended to deepen our understanding of these complex relationships.