Institutional Pressures of CSR: Evidence from India

Abstract

The aim of the study is to identify important pressures driving corporate social responsibility practices by companies in India. Institutional pressures are conceptualised as a second order hierarchical component model (reflective formative type) and its multiple dimensions as first order reflective constructs forming second-order components. The model has its roots in institutional theory as applied to CSR - linking government, industry association, NGOs, media, local communities and peer groups for overall institutional pressure. An exploratory study was conducted among top level and middle level CSR professionals of companies in S&P BSE 500 index to empirically validate constructs. Partial least squares structural equation modelling (PLS-SEM) was used for data analysis. Results indicate that institutional pressures can be measured in a reflective-formative type HCM (Hierarchical Component Model) and local community, peers, media, government and industry association are important triggers for CSR in India. The study provides evidence that stakeholders are exerting institutional pressures on corporates. Further, a new multidimensional institutional pressures formative construct to understand the pressures of CSR in India is proposed which can be used by researchers in future, by policy makers to make sector specific CSR laws and by corporates for training. [ABSTRACT FROM AUTHOR]