The Effects of Institutional Corporate Social Responsibility on Bank Loans

Harper, Pamela; Kumar, Shyam

doi:10.1177/0007650316647952

Cited by 28 publications

(26 citation statements)

References 72 publications

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“…The studies exploring the possible links between CSR disclosure and key financial decisions or parameters have substantially increased in the last decade. Recent study works which included investment or future cash flows [34], systematic risk [35], the cost of debt/bank loans [34,[36][37][38] and so on. Cheung [39] examined the indirect relationship between CSR and firm cash flows depends on the market value perspective.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Corporate Social Responsibility and Financial Performance: A Quantile Regression Approach

Liu

Guo

et al. 2019

Sustainability

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A prominent claim within the literature is that corporate social responsibility-disclosured firms are fundamentally more resilient to financial shocks, relative to firms that take no corporate social responsibility action. To test this, we examine the impact of corporate social responsibility (CSR) information disclosure on financial constraints (FC). Our sample is composed of A-share publicly listed firms from Shanghai and Shenzhen in China during 2013–2017. We find that CSR disclosure influences negatively financial constraints. The quantile regression results also indicate that the influences would more obvious when a company faces stronger financial constraints. Further, CSR disclosure influences negatively financial constraints in financially opaque firms, and the effect of financial opaque on the relationship strengthens when the company faces great financial constraints. After considering the problems of missing variables and endogenous, changing the level of CSR and FC measurement, using 2SLS and two-step GMM methods, the conclusion is still robust. However, the results should not be generalized, since the sample was based on 434 A-share publicly listed firms for 2013–2017. From the perspective of FC, this study contributes to the literature in the field of CSR and expands the empirical research on the economic consequences of CSR. It also can encourage enterprises to voluntarily disclose social responsibility information and it is of great significance to promote the stable development of the capital market and society.

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Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Corporate Social Responsibility and Financial Performance: A Quantile Regression Approach

Liu

Guo

et al. 2019

Sustainability

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“…As the second step, banks integrated environmental issues into lending, investing, asset management, and project finance [24]. Hence, they became CSR intermediaries [25] that influence the CSR of their clients, because higher corporate social performance (CSP) mitigates borrowers' financial risks [26]. Consequently, voluntary sustainability codes of conduct, such as the United Nations Environmental Program Financial Initiative (UNEPFI), the UN Principles for Responsible Investing (UNPRI), and the Equator Principles have been instigated [27].…”

Section: Introductionmentioning

confidence: 99%

Corporate Sustainability in Bangladeshi Banks: Proactive or Reactive Ethical Behavior?

Weber

Chowdury

2020

Sustainability

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The purpose of this study is to analyze the connection between the sustainability performance and financial performance of Bangladeshi banks to explore the impact of the Bangladesh Environmental Risk Management Guideline. We analyzed all 56 scheduled commercial banks that are currently operating in Bangladesh under the guidelines of the Central Bank of Bangladesh. Data for the sample has been collected from publicly available reports such as annual, sustainability, and corporate social responsibility (CSR) reports, disclosed sustainability and financial information on the banks’ websites, including all bank branches, and data published from the Central Bank. Data has been analyzed using panel regression. Our results indicate that higher sustainability performance creates a higher financial performance, and that bigger banks perform better with regard to sustainability than smaller banks. The analysis did not find, however, that higher financial performance influences the sustainability performance of the banks positively. Consequently, this research contributes to the research on legitimacy-driven behavior of Bangladeshi banks. This behavior rather leads to a reactive adoption of sustainability activities instead of proactive behavior.

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“…In this study, the researchers have developed social performance as an independent variable that has an influence on improving bank financial performance. Research on the effect of CSR on financial performance has been discussed by many researchers, but the results still do not provide clarity as to whether CSR increases the economic performance (Francis, Harper, & Kumar, 2016). Researchers have noted that CSR enables companies to differentiate themselves in the marketplace for their products (Francis, Harper, & Kumar, 2016) while increasing the number of customers (Lev, Petrovits, & Radhakrishnan, 2012;Servaes & Tamayo, 2013;Mukhibad, 2018).…”

Section: Introductionmentioning

confidence: 99%

“…The novelty of this study is that the test relates to the impact of social performance on all stakeholders and not only the shareholders of the Islamic banks which are the object of study. The reason for this is that existing research has rarely discussed the effect of CSR on bank performance (Francis et al, 2016), especially Islamic banks. Another reason is that banks take large risks in their operations (Francis et al, 2016), and this is even more the case with Islamic banks (Lassoued, 2018;Boumediene, 2010;Ahmed & Tariqullah, 2007).…”

Section: Introductionmentioning

confidence: 99%

“…The reason for this is that existing research has rarely discussed the effect of CSR on bank performance (Francis et al, 2016), especially Islamic banks. Another reason is that banks take large risks in their operations (Francis et al, 2016), and this is even more the case with Islamic banks (Lassoued, 2018;Boumediene, 2010;Ahmed & Tariqullah, 2007). The risks faced by Islamic banks concern credit risk, interest-rate risk, and liquidity risk (How, Karim, & Verhoeven, 2005).…”

Section: Introductionmentioning

confidence: 99%

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Can Social Performance Improve Financial Performance and Increase Customers’ Trust?

Mukhibad¹,

Anisykurlillah²,

Nurkhin³

et al. 2019

IJFR

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Social concern is strongly emphasized in Islam. There are the concepts of khalifah fil ard, hablum min nass, tawazun in Islam which demonstrate the Islamic approach to concern for social issues. The purpose of this study is to obtain evidence pertaining to whether social concern in Islamic banks has an impact on improving their performance and the trust of customers. The research sample is 11 Islamic commercial banks in Indonesia. The observation period was from 2009 to 2017. The results of this study show that social activities carried out by banks in the form of qardh financing, and the distribution of qardh al-hassan and zakah funds, were able to increase customer trust in the banks. This increase in trust is evidenced by the positive influence of channeling social funds on increasing debt and temporary syirkah funds. However, the distribution of social funds does not have a positive impact on the amount of funding channeled by banks. As a result, the bank's income from the disbursement of finance cannot increase, and the impact of the bank's profitability does not increase. So, it has been proven empirically that the distribution of social funds does not have a positive impact on the amount of financing and profitability as measured by ROA and ROE.

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The Effects of Institutional Corporate Social Responsibility on Bank Loans

Cited by 28 publications

References 72 publications

Corporate Social Responsibility and Financial Performance: A Quantile Regression Approach

Corporate Social Responsibility and Financial Performance: A Quantile Regression Approach

Corporate Sustainability in Bangladeshi Banks: Proactive or Reactive Ethical Behavior?

Can Social Performance Improve Financial Performance and Increase Customers’ Trust?

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