Published Online:July 2026
Product Name:The IUP Journal of Corporate Governance
Product Type:Article
Product Code:IJCG010726
DOI:10.71329/IUPJCG/2026.25.3.5-21
Author Name:Sweta Tiwari and Sayantani Roy Choudhury
Availability:YES
Subject/Domain:Management
Download Format:PDF
Pages:5-21
The study explores the role of promoter and non-promoter shareholding patterns in influencing the CSR motivation of firms in the Indian context. The sample consists of firms listed on the Nifty 50 index for the period April 1, 2013 to March 31, 2023. Data was obtained from the Bloomberg Environment, Social, and Governance (ESG) database. Based on the results of the Hausman test, the study employs a random effects model. The linear model reveals a significant relationship between ESG and firm performance, and the mediation analysis confirms that promoter holding indirectly but significantly impacts firm performance through these ESG components. The study aligns with recent advances in theoretical literature, which indicate that CSR governance can have a positive impact on firm performance. Further, it provides important managerial implications for Indian firms, as under the Companies Act, 2013, eligible Indian firms must spend 2% of their net profits on CSR activities. Hence, firms with high promoter holding invest more in governance and spend less on environment compliance, which not only helps them fulfill the regulatory CSR mandate but also achieve better financial performance.
Corporate social responsibility (CSR) refers to corporate initiatives that address environmental and social responsibilities toward stakeholders and society (Campbell, 2004; Gray et al., 2001). It encompasses economic, legal, ethical, and discretionary expectations that society has from firms (Carroll, 1979). Traditionally, firms focused primarily on profit maximization and shareholder returns (Friedman, 1970), but CSR has evolved to include ethical conduct and contributions beyond legal requirements (McWilliams & Siegel, 2001). Firms now increasingly view CSR as a strategic investment that enhances firm value, reputation, and competitive advantage (Godfrey et al., 2009).