Corporate social responsibility and cash holdings in India: Evidence from a natural experiment

Jadiyappa, Nemiraja; Joseph, Anto; Sisodia, Garima; Krishnankutty, Raveesh; Shrivatsava, Santosh

doi:10.1016/j.frl.2020.101581

Cited by 19 publications

(14 citation statements)

References 31 publications

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“…Similarly, firm characteristics such as size (Chiu & Wang, 2015;Giannarakis, 2014a;Klapper & Love, 2004;Ting, 2021;Velte, 2016), leverage (Ahmed & Courtis, 1999;Baldini et al, 2018;Barako et al, 2006;Khanchel, 2007), cash holdings (Arouri & Pijourlet, 2017;Cheung, 2016;Jadiyappa et al, 2021;Lu et al, 2017), and profitability (Collett & Hrasky, 2005;Cormier & Magnan, 1999;Gamerschlag et al, 2011;Giannarakis, 2014a) are found to be related to ESG ratings. A recent study by Abdul Rahman and Alsayegh (2021) who examine the Asian listed firms indicate that economic performance, size, leverage and profitability are found to be positively related to firms' disclosure of additional ESG information.…”

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confidence: 93%

Environmental, Social and Governance Performance: Continuous Improvement Matters

Wong

Ahmad²,

Mohamed-Arshad³

et al. 2022

MJES

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This paper examines the determinants of Malaysian listed firms’ environmental, social and governance (ESG) performance during the period 2005–2018. We focus on individual firms’ continuous efforts to improve their ESG scores once they are ESG rated. Panel fixed effect results reveal that the number of years since a firm was first included in Bloomberg’s ESG score is positive and significantly related to its ESG performance. We interpret this as evidence of firms’ deliberate efforts to improve their ESG scores once they fall under the radar of a third-party ESG rating agency. This finding underscores the importance of third-party rating agency in fostering greater corporate sustainability. We contribute to the literature that posits that ESG third-party rating agency can lead to higher level of ESG practices of the rated firms.

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confidence: 93%

Environmental, Social and Governance Performance: Continuous Improvement Matters

Wong

Ahmad²,

Mohamed-Arshad³

et al. 2022

MJES

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“…This paper contributes to the corporate social responsibility (CSR) literature by providing holistic insights into financial analysts’ personal values, perceived behavioural risk and investment decisions relating to the social aspects of CSR. Given the increased globalisation, studies have established the importance of examining CSR in diversified contexts (Gomes, 2019; Abdelzaher et al , 2019; Jadiyappa et al , 2020). Recent studies have also stressed examining CSR in a non-western context (Kamla and Rammal, 2013; Allawattage and Fernando, 2017; Shahid et al , 2022).…”

Section: Introductionmentioning

confidence: 99%

Financial analysts’ personal values, perceived behavioural risk and investment decisions in evaluating CSR

Shahid

Tufail

Ali

et al. 2023

IMEFM

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Purpose This paper aims to contribute to the corporate social responsibility (CSR) literature by providing holistic insights into financial analysts’ personal values, perceived behavioural risk and investment decisions relating to the social aspects of CSR. Specifically, this paper examines whether analysts’ personal values, such as religiosity, spirituality and social consciousness, influence their investment decisions relating to a highly profitable firm that is alleged of exploiting labour rights. This study also examines the mediating role of analysts’ perceived behavioural risk between personal values and investment decisions. Design/methodology/approach Data were collected, using a scenario-based survey, from 145 financial analysts at both public and private companies in Pakistan. Findings The results show that analysts’ values, including religiosity, spirituality and social consciousness, have a significant negative impact on their investment decisions. The results also demonstrate that perceived behavioural risk mediates the relationship between these values and investment decisions. Practical implications This study has implications for the globalised business world, regulators and researchers for incorporating personal and ethical values into risk and investment decision-making. Originality/value This study establishes the importance of analysts’ personal values in risky investment decision-making.

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“…Fourth, our study covers a more extended time duration by spreading over nine years in contrast to other empirical evidence on CCH in India (Chauhan et al. , 2018; Jadiyappa et al. , 2021; Maheshwari and Rao, 2017; Ranajee and Pathak, 2019; Roy, 2018).…”

Section: Introductionmentioning

confidence: 99%

“…In addition to examining the impact of banking relationships on cash holdings, our contribution lies in analyzing the non-linear effect of banking relationships and ownership concentration. Fourth, our study covers a more extended time duration by spreading over nine years in contrast to other empirical evidence on CCH in India (Chauhan et al, 2018;Jadiyappa et al, 2021;Maheshwari and Rao, 2017;Ranajee and Pathak, 2019;Roy, 2018). This paper is structured as follows.…”

Section: Introductionmentioning

confidence: 99%

Impact of banking relationships and ownership concentration on corporate cash holdings in India

Saxena

Sahoo

2022

ARA

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PurposeThis study aims to investigate the impact of banking relationships and ownership concentration on corporate cash holdings (CCH) in 333 Indian micro, small and medium-sized enterprises (MSMEs) for nine years (2011–2020).Design/methodology/approachThe authors use system generalized method of moments approach to examine the impact of banking relationships and ownership concentration on CCH.FindingsThe paper finds that the firm's number of banking relationships share a concave (inverted U-shaped) relationship with the cash holding levels. Initially, the positive relationship may signal weak creditworthiness of MSMEs or be a consequence of bank free-rider monitoring issues. The negative effect after a certain level shows that the competition among banks reduces the firm's financial constraints and therefore makes the firms hoard less cash. The authors also document an inverse relationship between ownership concentration and cash holdings. The authors' results suggest that the presence of large shareholders acts as efficient monitors, reducing the risk of potential agency conflicts and thereby managerial entrenchment resulting in lower cash levels. This association remains unchanged for MSMEs in the service sector. However, the quadratic association between banking relationships and CCH vanishes in the presence of a service sector dummy in the regression model. The authors find a significant positive linear relationship in this regard.Originality/valueTo the best of the authors' knowledge, this is the first paper that studies banking relationships and ownership concentration as determinants of Indian MSMEs.

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Corporate social responsibility and cash holdings in India: Evidence from a natural experiment

Cited by 19 publications

References 31 publications

Environmental, Social and Governance Performance: Continuous Improvement Matters

Environmental, Social and Governance Performance: Continuous Improvement Matters

Financial analysts’ personal values, perceived behavioural risk and investment decisions in evaluating CSR

Impact of banking relationships and ownership concentration on corporate cash holdings in India

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