Valuation Implications of Mandatory <scp>CSR</scp> Expenditure in India
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Bibliographic record
Abstract
We examine the value‐relevance of corporate social responsibility (CSR) expenditure utilizing the Indian setting of mandatory CSR spending regulation which commenced in 2014. India is the only country where regulators mandate both CSR reporting and spending. Our interest is in two types of firms that meet the minimum specified thresholds: firms that voluntarily made CSR expenditures pre‐regulation (voluntary spenders) and firms that did not (forced spenders). This separation in revealed preference allows researchers and investors to observe, at least on average, a firm's true CSR strategy type (proactive/leader versus reactive/follower) through their pre‐regulation expenditure strategy. This unique quasi‐experimental setting allows us to investigate whether CSR spending is positively associated with shareholders’ value, both when spending was voluntary pre‐regulation (for voluntary spenders) and after it became mandatory post‐regulation (for voluntary and forced spenders). We find that for voluntary spenders, the markets assess CSR expenditure as valuation‐enhancing pre‐regulation, but post‐regulation the valuation benefits are significantly weakened. The market's assessment is that a forced spender's (imposed) CSR expenditure is, on average, less valuable than that of voluntary spenders, consistent with such spending being viewed as a form of corporate taxation. Further, we find that shortfalls from the required spending amount are penalized by the market for voluntary spenders but rewarded for forced spenders. We also find that advertising appears to play an important communication role both pre‐ and post‐regulation. We view the results as being consistent with the notion that mandated expenditures are viewed differently than those made voluntarily.
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Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.001 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.000 | 0.001 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.000 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it