Unveiling the moderating role of governance mechanism on the nexus between CSR and firm performance in India: A GMM-based dynamic panel approach

This study aims to explore the nexus between corporate social responsibility (CSR) and firm performance (FP); and the moderating role of governance mechanisms on the CSR-FP nexus. This study investigates the aforementioned nexus, based on the sample of 257 Indian non-financial companies listed on the National Stock Exchange (NSE) 500 index, for the period 2009-10 to 2022-23. GMM-based dynamic panel estimation technique is applied to explore the relationship. The study reveals a positive nexus between CSR and FP, and a strong positive moderating impact of board size (BS), board independence (BID), and board gender diversity (BGD) on CSR-FP nexus. However, the study shows an inverse moderating role of ownership concentration (OC) on the CSR-FP nexus. The study provides a brief understanding of the CSR-FP nexus and recommends the implementation of stronger governance mechanisms for the corporations of developing nations. This initiative may increase CSR, and generate economic advantage for the firms and the whole society.