Non-financial disclosure and market-based firm performance: The initiation of financial inclusion

Bose, Sudipta; Saha, Amitav; Khan, Habib Zaman; Islam, Shajul

doi:10.1016/j.jcae.2017.09.006

Cited by 86 publications

(133 citation statements)

References 61 publications

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“…We used a similar process to develop the indices for cost efficiency, revenue growth, and non‐financial benefits. Also, to assess our GBPI 's internal consistency, we employed Cronbach's alpha coefficient, following Bose, Saha, Khan, and Islam (2017). 14 The alpha coefficient for the GBPI is 0.776, suggesting that the items in the performance index capture the same underlying constructs 15…”

Section: Methodsmentioning

confidence: 99%

“…Therefore, we control for profitability ( PROFIT ). We control for a firm's share trading volume ( LIQUID ) as a higher trading volume indicates greater demand for a share that may positively influence FP (Bose, Saha, et al, 2017; Roll et al, 2009). Moreover, we include the age ( FAGE ) of a banking firm as the firm will gain a competitive advantage in the market through its long‐term existence (Bose, Podder, et al, 2017; Wang & Qian, 2011).…”

Section: Methodsmentioning

confidence: 99%

“…In our baseline regression model, we used Tobin's Q to measure FP; however, the potential measurement error associated with Tobin's Q may create bias 23 . Therefore, we use two transformations of Tobin's Q ( TOBINQ ): the inverse of TOBINQ (−1 /TOBINQ) and the natural logarithm of TOBINQ following prior studies (Bose, Saha, et al, 2017; Ferreira & Matos, 2008). Columns (3)–(6) in Table 9 present the results indicating that the coefficients for GBPI and GBPI × PCON retain the same sign and significance level, as reported in Table 4 24 .…”

Section: Additional Analysis and Robustness Checksmentioning

confidence: 99%

See 2 more Smart Citations

Does green banking performance pay off? Evidence from a unique regulatory setting in Bangladesh

Bose

Khan

Monem

2020

Corporate Governance

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Research Question/Issue A firm's choice to “go green” largely remains unregulated worldwide. This study uses an institutional setting in Bangladesh experiencing a green banking regulatory reform to examine whether banks' green performance translates into improved financial performance and whether this is moderated by banks' political connections. Research Findings/Insights Results based on a sample of 172 firm‐year observations from 2008 to 2014 suggest that green banking performance is positively associated with a bank's financial performance. Further analysis suggests that cost efficiency mainly drives this relationship. However, banks' political connections negatively affect this relationship by counterbalancing green banking's non‐financial benefits. Our findings are robust to sensitivity tests that examine endogeneity concerns using difference‐in‐differences (DiD) and propensity score matching (PSM) analyses and Heckman's two‐stage analysis. Theoretical/Academic Implications Most prior studies on corporate social responsibility (CSR) were conducted in voluntary settings: however, our study utilizes a unique regulatory setting in Bangladesh. With this exogenous shock to the banking industry, the regulatory setting helped to alleviate endogeneity concerns arising from voluntary motives behind CSR performance. To the best of our knowledge, this is the first study to examine any link between green banking performance in a regulatory setting and banks' financial performance. Practitioner/Policy Implications This study's findings suggest that sustainable business practices promoted through regulatory intervention can improve financial performance. A regulatory green banking initiative can be a win–win for all competing stakeholders. Our findings have significant policy implications for governments and regulatory agencies worldwide in the fight against global warming and climate change.

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Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Section: Additional Analysis and Robustness Checksmentioning

confidence: 99%

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Does green banking performance pay off? Evidence from a unique regulatory setting in Bangladesh

Bose

Khan

Monem

2020

Corporate Governance

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“…Leverage is the ratio of total debt scaled by total assets (Bose, Saha, Zaman, & Islam, 2017). Banks with higher equity (lower leverage) generally exhibit lower ROE but higher ROA (Athanasoglou et al, 2008).…”

Section: Leverage (Lev)mentioning

confidence: 99%

The determinants of profitability of Indian commercial banks: A panel data approach

et al. 2018

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The current study examines the determinants of profitability of Indian commercial banks. The analysis is conducted over a period of 10 years in which the Indian banking sector has gone under different changes such as demonetization and issues related to banking sector sustainability and banking sector frauds. The analysis is based on balanced panel data over a period ranging from 2008 to 2017 for 69 commercial Indian banks. Profitability of Indian banks is measured by two proxies, namely, return on assets (ROA) and return on equity (ROE), whereas bank size, assets quality, capital adequacy, liquidity, operating efficiency, deposits, leverage, assets management, and the number of branches are used as bank‐specific factors. Further, a set of macroeconomic determinants such as gross domestic product, inflation rate, interest rate, exchange rate, financial crisis, and demonetization are used as independent variables. Stationary test along with pooled, fixed, random effect models and panel correction standard error are used in this study. The results revealed that bank size, the number of branches, assets management ratio, operational efficiency, and leverage ratio are the most important bank‐specific determinants that affect the profitability of Indian commercial banks as measured by ROA. Furthermore, among the bank‐specific determinants, the results revealed that bank size, assets management ratio, assets quality ratio, and liquidity ratio are found to have a significant positive impact on ROE. With regard to the macroeconomic determinants, the results revealed that the inflation rate, exchange rate, the interest rate, and demonization are found to have a significant impact on ROA. However, in the case of ROE, the results show that all macroeconomic determinants except demonization have a significant impact on the bank's profitability as measured by ROE.

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“…Standalone CSR reports have been documented to be value-relevant, although they are subject to limited regulation. Prior studies [7][8][9]25] have documented a positive relation between CSR disclosure and firm value (or performance). CSR disclosure also reduces information asymmetry related to factors affecting firm value [13,14,26], thereby reducing the cost of equity capital [10,24].…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Organizational Slack, Corporate Social Responsibility, Sustainability, and Integrated Reporting: Evidence from Korea

Kim

Shin

et al. 2019

Sustainability

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This paper examines whether organizational slack is associated with firms’ voluntary disclosure of corporate social responsibility (CSR), sustainability, and integrated reporting. This is an empirical research study using archival data based on a sample of public firms listed on the Korea Exchange from 2005 to 2016. We manually collected CSR reports, sustainability reports, and integrated reports (IRs) that were published during our sample period. We found that human resource slack was highly related to the publication of corporate social responsibility, sustainability, and integrated reports. Firms initiating such disclosure in their industry groups were likely to have slack in permanent employees as well as financial slack. Additionally, integrated reporting, which is a recent improvement in the delivery of financial and non-financial information, was positively associated with an excess number of regular employees. This study provides evidence that slacks in regular employees are related to a greater degree of voluntary disclosure via standalone CSR or sustainability reporting as well as integrated reporting. These findings suggest that slacks or excess human resources play a crucial role in voluntary corporate disclosure.

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Non-financial disclosure and market-based firm performance: The initiation of financial inclusion

Cited by 86 publications

References 61 publications

Does green banking performance pay off? Evidence from a unique regulatory setting in Bangladesh

Does green banking performance pay off? Evidence from a unique regulatory setting in Bangladesh

The determinants of profitability of Indian commercial banks: A panel data approach

Organizational Slack, Corporate Social Responsibility, Sustainability, and Integrated Reporting: Evidence from Korea

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