Impact of Changing Business Cycles on Corporate Social Responsibility–Financial Performance Relationship

ABSTRACT This paper aimed to assess the impact of the changing business cycles on the CSR–Financial Performance relation of Indian firms. For this purpose, a panel data set of 70 Indian firms listed in NIFTY‐100 for a period of 10 years, that is, 2010–2019, was employed. CSR data for this study was collected from the published reports of the firms under study. The electronic database “Capitaline” was used as the data source for the financial variables. The paper used panel data modeling to study the effect of CSR on financial performance. Also, robustness analysis was conducted to check the results across alternate specifications. The results revealed that CSR has a significant negative impact on financial performance in the expansion phases. In contrast, no significant impact was observed in the recession phases of business cycles.