IMPACT OF CSR ON PROFITABILITY IN FMCG SECTOR: A COMPARATIVE STUDY BETWEEN INDIA AND THE USA

This research examines the impact of Corporate Social Responsibility (CSR) on the profitability of companies in the Fast-Moving Consumer Goods (FMCG) sector, focusing on a comparative analysis between India, a developing economy, and the United States, a developed one. CSR has evolved into a key strategic and ethical consideration for businesses across the globe. However, the extent to which CSR spending influences financial performance may vary depending on economic, regulatory, and cultural contexts. This study uses secondary data collected from the annual report of 10 leading FMCG companies - 5 from India and 5 from the USA. Profitability is measured through Net Profit, Return on Equity(ROE), and Return on Assets (ROA), while CSR spending is considered an independent variable. Correlation analysis and Ordinary Least Squares (OLS) are applied to assess the strength and direction of the relationship between CSR and profitability. The findings reveal a strong and statistically significant positive correlation between CSR spending and Net Profit in Indian companies, suggesting that CSR activities may enhance financial performance in developing markets. This could be attributed to factors such as stricter CSR compliance requirements, increasing consumer awareness, and the strategic use of CSR for brand differentiation. Conversely, the results from the USA show a weak and statistically insignificant relationship, indicating that in mature markets, CSR may function more as a compliance or reputation management tool, with less direct financial impact. Overall, the study concludes that CSR can serve as a valuable driver of profitability in emerging economies where social investment is closely tied to corporate identity and market presence. In contrast, its financial benefits may be less pronounced in developed economies where CSR practices are more institutionalized. These insights can guide companies and policymakers in aligning CSR initiatives with business goals more effectively across different economic settings. Keywords: Corporate Social Responsibility(CSR), Profitability, FMCG Sector, Net Profit, India, USA