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The study examines the relationship between debt financing and firm performance through the lens of agency costs during the Covid-19 period for standalone firms and firms affiliated with business groups. It does the same for firms engaged in manufacturing and services. Using 4,422 firm-year observations from nonfinancial firms from 2014 to 2020, the study finds that business group firms raised more new debt vis-à-vis standalone firms. On the other hand, service sector firms raised more debt than manufacturing firms. The findings suggest that agency costs declined during the Covid-19 shock, enabling firms to raise debt primarily to increase their liquidity during an uncertain period. Companies had a substantial amount of cash meant for investments in the future. Under these circumstances, corporate governance mechanisms should be strong to prevent the misallocation/misappropriation of funds, thus reducing future agency costs. [ABSTRACT FROM AUTHOR]

The paper evaluates the impact of Covid-19 pandemic on firm performance along with other corporate finance variables. As expected, Covid-19 had a negative impact on firm’s performance, especially on small firms with pronounced leverage. The paper also highlights that firms with higher cash holdings were resilient in the face of the pandemic. Manufacturing firms were the worst hit as their tasks could not be executed remotely; supply chain of raw materials was severely disrupted. Another sector that bore the brunt was travelling and hospitality, where tasks cannot be digitized. [ABSTRACT FROM AUTHOR]

This study examines the role of financial performance and board characteristics on corporate social responsibility expenditure (CSR expenditure hereafter). The study is based on a natural experimental design where the Government of India made it legally mandatory for companies meeting certain criteria to spend at least 2% of their average profits in the preceding three financial years towards corporate social responsibility in the companies Act 2013. It examines the propensity of companies to spend towards corporate social responsibility over and above the legal mandate. This study analyze two different schools of thought in the field of corporate social responsibility varying in their assertions. The first school of thought asserts that firms engaged aggressively in CSR expenditure would be viewed positively by the customers/prospective customers. The second school of thought asserts that CSR expenditure reduces the profit of the firm that could have been used productively for asset acquisition, and business expansion. The first school of thought focuses on the good corporate citizenship hypothesis whereas the second school of thought focuses on the efficient utilization of scarce resources hypothesis. Using a dataset of companies listed on NSE 500 index, we found a positive and statistically significant relationship between CSR expenditure and accounting‐based firm performance but a negative relationship with market based firm performance. Size of the firm has a positive relationship with firm performance, alluding to the presence of "size" effect. Board size, board independence and cumulative attendance in board meetings exhibit mixed results with firm performance. Note: A slightly different version of this paper was presented in the 15th ICBF‐2022 conference held at IBS Hyderabad in the online mode. We would like to extend our heartfelt gratitude to all the reviewers and participants whose suggestions helped improve this article. [ABSTRACT FROM AUTHOR]