The Politics of Mandatory Corporate Philanthropy
Year: 2024
Type: article
Abstract: India requires certain companies to disclose corporate social responsibility (CSR) expenditures and meet CSR targets. However, these firms cannot classify political donations as CSR. I argue that firms belonging to business groups, which are politically dependent, substitute between CSR and political donations. Business group members are less likely to meet CSR targets and reduce CSR spending around elections in their headquarter state. Consistent with the substitutability thesis, these firms increase measures of official and illicit political donations around elections. The staggered and pre-determined timing of state elections supports a causal interpretation of this substitution effect.
Source: The Journal of Law and Economics
DOI: 10.1086/729291
Author: Dhruv Chand Aggarwal
Institution: Northwestern University
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W4405203134