To engage or not to engage in corporate social responsibility: Empirical evidence from global banking sectorChung-Hua Shen, Meng-Wen Wu, Ting-Hsuan Chen and Hao Fang Economic Modelling, 2016, vol. 55, issue C, 207-225 Abstract: Whether or not banks should engage in corporate social responsibility (CSR) activities is controversial because of the concomitant high cost even if banks could enjoy the benefits of a higher income as a result of their good reputation. Faced with this dilemma, bank managers are hesitant to engage in CSR. This study pursues this issue by examining whether or not banks engaging in CSR can bring profits and reduce non-performing loans. We apply three novel estimation methods to obtain the unbiased and full-blown CSR effect. The first two methods are matching methods, namely, conventional propensity score matching method and nearest-neighbor variance bias-corrected matching method (nn-VBC). The third method is Heckman's two-step method in switching regression. Regardless of the methods used, CSR banks overwhelmingly outperform non-CSR banks in terms of return on assets and return on equity. Our study offers policy suggestions for both government regulators and bank managers. Keywords: Corporate social responsibility; Financial performance; Matching method; Heckman's two-step method (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:55:y:2016:i:c:p:207-225 DOI: 10.1016/j.econmod.2016.02.007 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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