Milton Friedmans view on social responsibility of firms and its validation in the context of public sector banks in India

Abstract

The present study is an empirical investigation which validated Milton Friedman s views on social responsibility of firms in the context of Public Sector Banks (PSBs) in India. The study analyzed Priority Sector Lending (PSL) and Corporate Social Responsibility (CSR) by taking a sample of 25 PSBs in India from 1994 to 2017. Both parametric and non-parametric methodology was employed. The analysis confirmed a negative impact of social responsibility on Profit Efficiency of PSBs in India. This implies that socially responsible banks have a competitive disadvantage that results in extra burden on the banks and erosion in the quality of banks. newline