Guest editorial: Gaining insights into dynamics of responsible business practices in the South Asian context

The importance of corporate social responsibility (CSR) has grown demonstrably over the past several decades for corporations (Ferrell et al., 2016; Eccles et al., 2014), investors (Bansal et al., 2022; Kruger, 2015) and other stakeholders (SEC, 2022; Dmytriyev et al., 2021; Edmans, 2011; Russo and Perini, 2010). However, much of the core research has been focused in developed economies, specifically the United States and Western Europe, where voluntary or mandatory standards have been implemented (Bochkay et al., 2025; Erbach, 2021; Acemoglu et al., 2016). Given the importance of regulatory frameworks to country-specific developments in sustainable business practices (Singhania and Saini, 2023), an important empirical question for study is which idiosyncratic and institutional structures drive CSR and other responsible business practices in emerging markets. Moreover, the subsequent role of companies' CSR and the related environmental, social and governance (ESG) activities in emerging markets is less understood, particularly around the demands for these activities and the challenges to their implementations.Several studies suggest that corporations engage with stakeholders to enhance value, which results in their “doing well by doing good” (Kruger, 2015). Under this stakeholder perspective, corporations with sustainable business practices enhance shareholder value through various channels. For example, companies with high-ESG activities benefit from higher employee satisfaction (Edmans, 2011), consumer loyalty (Servaes and Tamayo, 2013), improved stakeholder relationships (Kacperczyk, 2009) and easier access to capital (Cheng et al., 2013). ESG activities can also aid firms in risk management by diversifying risk allocations and driving consumer demand even during financial crises (Lins et al., 2017; Becchetti et al., 2015). Finally, ESG activities can provide differentiation strategies for corporations, creating competitive advantage and reducing systematic risks (Albuquerque et al., 2019; Eccles et al., 2014).Historical economic theories, however, suggest that expenditures made for stakeholders' benefit at the expense of shareholders' benefit are value-reducing activities and should not be taken by managers (Friedman, 1970). Further, other researchers argue these value-reducing activities are managerial agency conflicts and are myopic in nature, simply representing managers' reputation building among stakeholders to the detriment of shareholder wealth (Cheng et al., 2013; Barnea and Rubin, 2010). An intriguing question is whether these agency conflicts will be exacerbated or diminished in developing economies where capital markets and institutions are weaker (Estache and Wren-Lewis, 2009; Knight, 1998), property rights are less defined or enforced (Schneider, 2005) and governance reforms are relatively recent as a result of economic globalization (Reed, 2002). The South Asian context, with differential levels of institutions, capital markets and oversight across the various emerging markets (e.g. Pakistan vs. India), provides an interesting setting to assess whether managers can utilize ESG activities for their own benefits at the expense of shareholder wealth.Further confounding these issues, recent research warns about potential corporate greenwashing, where companies disclose, or selectively disclose, socially responsible business practices but, in practice, do not truly engage in responsible business practices (Free et al., 2024; Lee and Hagemen, 2018; Kim and Lyon, 2015; Lyon and Maxwell, 2011; Delmas and Burbano, 2011). An inherent question is whether greenwashing can provide a “win-win” for corporations, which increases firm value through improving managerial and corporate reputation with stakeholders without the large expenditures that could limit shareholder profits.Finally, political and cultural backlash against responsible business practices has plagued developed countries in recent years (Ioannou, 2025; SEC, 2025). This has created a changing landscape around the supply and demand for CSR and the role of corporations in contributing to ESG activities around the world. To what extent do public and private companies adapt their responsible business practices, which in some cases have been instituted over several decades, to such increased short-term pressure? This is a question ripe for academic research in both developed and developing regions. Further, researchers can investigate constructs to establish whether corporations simply begin to relabel or reduce public advocacy for ESG activities to continue to implement firm- and social-value-maximizing activities while avoiding potential downside risks of political and cultural pressures. For example, current regulatory standards in the US make emissions of certain pollutants illegal, but potential reductions in Environmental Protection Agency enforcement put into question the true “bite” of these regulatory requirements (McGuire et al., 2025). Thus, enforcement may fall on activists' groups to pressure corporations' reputations, particularly when previous commitments for ESG activities had already been agreed upon. Going forward, corporations must weigh, beyond just economic theory, the benefits of providing responsible business practices to stakeholders' groups, particularly when these commitments are largely favorable such as local community building or employee development and advancement, with the risk of appearing “woke” and inciting further backlash from ultra-conservative actors (Reuters, 2023).Against this backdrop we set out to publish this special issue (SI) titled, “Collisions and confusion – business, corporate responsibility, and the profit motive,” where we examine the growing disconnect between corporate purpose (which is aligned with responsible business practices) and actual practice, particularly in the markets of South Asia, but with broader implications to the global development of sustainable activities and disclosures. For our SI, we define corporate responsibility as the broader view of corporate purpose towards CSR, corporate sustainability, responsible business practices and ESG activities and disclosures.In recent decades, state-owned and privately owned businesses in South Asia have become enthusiastic supporters of CSR, like their counterparts in developed markets. CSR is a term to explain the commitment of business to simultaneously do good to society while doing well for owners and stakeholders. Over time, CSR has become the means for big business to contribute to positive societal outcomes – by contributing to charity, planting trees, staff volunteering and raising money for pressing social causes like education and healthcare. Recent research has shown that consumers' views of CSR are somewhat different between India and the United States (Gupta, 2011), suggesting that conceptualizations of CSR determined in studies of developed nations may not apply to developing countries. As such, it is important to investigate, or revisit, research questions specifically in South Asia, which is fundamentally different from developed economies. For example, in India, CSR contributions are mandated by law (Manchiraju and Rajgopal, 2017), but the charity giving under the name of responsible business conceals more than it reveals (Rajgopal and Tantri, 2023). Here, compliance with ESG standards stands out because even a superficial glance at company balance sheets reveals that “Big Business” may be talking the right talk, but evidence to support their commitment to protecting the environment, promoting diversity and inclusion and paying taxes seems to be falling short (MCA, 2023; Rajgopal and Tantri, 2023; Wu et al., 2020).Recent research in the region suggests that CSR improves organizational images to job seekers (Chowdhury et al., 2023) and consumers (Aparna et al., 2023). From a stakeholder welfare perspective, genuine increases in responsible business practices may create imbalances in welfare growth that may not be in line with the ideal initiative developed by governmental bodies. For example, the Ministry of Corporate Affairs (MCA) of India reported a minimal effect of CSR projects across India despite the growth in CSR spending following regulatory action, largely due to initiatives only in the regions in which corporations operate (MCA, 2023). Therefore, companies generate goodwill with their local communities, driving philanthropic opportunities in regions that have already benefited socio-economically from the corporate investment and excluding smaller regions that have higher incidences of poverty and underdeveloped infrastructure. For example, the top ten states receiving CSR funds include the eight largest state economies, but the northeastern states of Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura have received less than 1% of the total CSR funds. Therefore, a key challenge for both corporations and regulatory bodies implementing CSR plans and requirements is misalignments between the anticipated beneficiaries of the responsible business practices.At the same time, this tension in the practical approach to implementing responsible business practices is under the presumption that all parties agree about the philanthropic and community-building efforts of all parties. However, worldwide, corporate greenwashing is on the rise (Kim and Lyon, 2015) because corporate managers believe it is in the best interest of the business to do so. As such, the importance of understanding the incentives or repercussions of greenwashing cannot be understated. Recent research has demonstrated, from the consumer perspective, that greenwashing is not wholly beneficial. These practices have increased consumer skepticism, and as a result, discerning Indian consumers have demonstrated less receptivity to green advertising (Jog and Singhal, 2020). From the regulatory framework as well, India has seen considerable increases in CSR expenditures by corporations following the Companies Act 2013, but “the impact of the CSR funds is not widely felt” (MCA, 2023). In 2023, the MCA called for corporations to take a long-term comprehensive approach to their CSR expenditures, committing to appropriate structures for these expenditures and ensuring that these initiatives are self-sustaining. It is yet to be seen whether corporations will heed this call and integrate these practices in a meaningful and impactful way. Either way, while businesses have expanded their financial contributions to charity, less attention is being paid to whether their responsible business practices have been shaped by the rigorous regulatory regime or from increased investor attention to these practices (Pizzetti et al., 2021; Johnson et al., 2020).Another reason to investigate these questions from the South Asian context is that developing regions in South Asia are on the frontlines of climate distress and social dislocation (EJF, 2025; World Bank Group & Asian Development Bank, 2021; Sapkota, 2015). As such, investor and corporate divestitures of CSR practices in developed countries in the last five years can (1) have had a large impact on South Asian countries such as those with rising sea levels or exposure to severe weather patterns due to climate change; (2) damage the supply and demand equilibrium for CSR in these local regions, where greater, not less, CSR is fundamentally needed and (3) dampen the likelihood of initiating or maintaining global regulatory standards/frameworks for these responsible business practices (SEC, 2025; TFCD, 2021). This backtracking of Western nations has compounded the need for developing areas in South Asia to enact their own regulatory requirements, particularly around factors contributing to climate change. In this SI, we look to a variety of countries in South Asia to help answer these questions and to drive further research in the area.We issued the Call for Papers in May 2024 with a submission deadline of January 10, 2025. Submitted articles were initially assessed for fit with the SI and articles in line with the context of the SI were then blind reviewed by two or more experts in the field. In the spirit of the call to bridge the gap between research and industry, the articles were reviewed by one academic peer reviewer and one practitioner peer reviewer. All articles went through a “revise and resubmit” process, with most doing more than one round of reviews. We are grateful and appreciative of the effort and dedication of the reviewers whose contributions were paramount to the success of this SI. Out of the 19 articles submitted, 7 appear in the SI with authors from Bangladesh, India, Pakistan and Singapore.The studies received and published for this SI align well with the spirit of CSR and ESG, providing a diverse set of academic disciplines, topics, research methods, settings and author locales. For example, of the seven studies included in the SI, four relate to pure empirical work, two are mixed-method studies with both qualitative and quantitative analyses and one is a pedagogical case study. Furthermore, the studies in this SI touch upon accounting, finance, economics, marketing and management, befitting the interdisciplinary nature of this journal.This broad theme of diverse experiences, research areas and methodologies can be classified and measured within a few less-expansive categories: (1) the supply and demand for responsible products and business practices, (2) the benefits and challenges of implementing these ESG activities and (3) the interplay between institutions, capital markets and regulatory enforcement with corporate sustainability. Overall, they contribute to our understanding of the mechanisms that drive these associations, providing evidence for several economic theories such as stakeholder theory, resource dependency, signaling theory and legitimacy theory, as opposed to other economic theories such as agency problems and self-serving myopic initiatives at the expense of maximizing firm values.ESG ratings are commonplace in Western and other developed countries, but how should responsible business practices be assessed in developing regions where ratings do not yet exist and regulatory frameworks for guiding ESG activities by corporations are fundamentally absent? Further, what determining factors drive corporations' decisions to invest in ESG activities in markets without regulatory standards to require these investments? These are interesting questions investigated by Tauseef and Khurshid (2025) in the Pakistani setting, who create an ESG ranking of publicly traded firms on the Pakistan Stock Exchange (PSX) based on corporate disclosures of these activities. The authors find that in the absence of regulatory requirements, firms opt for higher dimensions of governance activities but lower environmental and social (ES) performance, providing evidence consistent with the idea that corporate managers perceive governance activities as value-maximizing while not perceiving E and S activities as value-maximizing, ceteris paribus. They then investigate the firm characteristics that can help determine this ranking and find that firms with higher financial performance and lower leverage are more likely to rank highly in ESG dimensions. These findings further our understanding of signaling theory, in which corporations demonstrate to investors that they have the additional resources necessary to fill institutional voids (Su et al., 2016), as it pertains to ESG in this emerging market. The paper also has several practical implications for foreign inflows and for potential future ESG disclosure regulations in Pakistan.Further investigating the relationship between corporate governance and ES activities is Jabin (2025). In the spirit of Dyck et al. (2019), who find evidence that institutional investors promote their social norms around ES practices to developing countries, Jabin (2025) investigates the relationship between board characteristics (i.e. governance) and ES activities as moderated by institutional investors in the banking sector of India. The author finds a positive association between board size, board independence, the presence of CSR committees and board gender diversity with ES performance. Moreover, the author also finds that institutional investor ownership enhances this relationship. Taken together, these results provide supporting evidence for the notion that corporations' good corporate governance can meet investor demands for ES activities while limiting the potential for managerial agency conflicts to drive responsible business practices outside of investments that are in the best interest of shareholders.The next group of studies investigates the benefits and consequences of responsible business practices to investors but through differing frameworks and innovations, which provide differential insights to and understanding of corporate In and the relationship between CSR expenditures and is investigated across Indian The authors find a positive and relationship between companies' CSR expenditures and their likelihood of to This the broad for sustainable business practices, providing evidence supporting the stakeholder theory and the agency However, their findings demonstrate that this relationship is with firm the relationship and The authors that corporate responsibility can be aligned with both societal and shareholders' Further, the authors that the regulatory CSR spending from for company stakeholders' social and economic providing positive support for the regulatory initiative of the Companies Act They further call for to promote practices in business, while corporations to continue to the broader impact of their towards with their social and environmental and beyond value ESG benefit or investors in India, a but developing with growth and a regulatory This is an important research question investigated by for which research has had a to answer only ESG funds in the as of the effect more socially responsible companies financial benefits due to their investor the author investigates whether of higher of lower The results of the study suggest that do not enhance to some evidence suggests that the downside risk evidence consistent with research in other settings and areas is that and firm have much in than ESG activities. Finally, exposure analyses demonstrate that high-ESG are to the as opposed to value, investment or This paper has practical implications for investors and the of strategies and for the and Exchange of India as current ESG practices and the landscape of ESG activities in developing et al. 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