This study investigates how mandatory corporate social responsibility (CSR) regulations, designed to enhance CSR practices, might simultaneously influence the propensity of firms to engage in irresponsible actions, also known as Corporate Social Irresponsibility (CSI). We explore this question using an abductive approach by leveraging the distinct context of India, where the Companies Act of 2013 (CA2013) mandates specific firms to allocate funds for CSR expenditure. Through a difference-in-differences methodology, we find that regulated firms experienced a significant reduction in irresponsible actions following the implementation of CA2013. This finding highlights the potential positive spillover effects of mandatory CSR regulation in mitigating CSI. Meanwhile, it provides endogeneity-addressed empirical evidence on the controversial relationship between CSR and CSI, and aligns with a more predominant role of moral consistency over moral licensing effect. We further explore the underlying mechanisms driving the observed moral consistency effect and found that the reduction in CSI is more pronounced among firms with an inherent strong moral identity, as opposed to those facing intense external stakeholder pressures. The results suggest that firms exhibit moral consistency in social behavior primarily due to their internal moral motivations, rather than the pressures from external stakeholders.
