Covering a period of 6 years (2009-2014), this study analyzes the impact of CSR engagement onthe financial performance of a panel of banks extracted from the European banking industry.Consistent with the stakeholder theory and the resource-based view, empirical results suggestthat stable fiduciary relationships with stakeholders and good reputation allow banks to profitfrom CSR. Specifically, by applying the Heckman’s two-stage model (1976), our findings show thatthe more banks are engaged in socially responsible activities the more they outperform banksthat are less involved in CSR. In fact, as main sources of bank’s profit, Net interest income and theNon-interest income, are positively associated with a higher CSR commitment. Moreover, ahigher engagement in CSR is positively associated with a more efficient credit allocation, asmeasured by a lower incidence of NPL on total loans. Therefore, given the relevant role of bankswithin social and economic systems, the effects of CSR in the banking industry support a win-winmodel between interests of shareholders and stakeholders. This leads to a vision of CSR asstrategic tool to increase an enlarged value creation, both social and economic, by banks.
The impact of CSR engagement on the financial performance of European Banking Industry
Varrone N.;
2018-01-01
Abstract
Covering a period of 6 years (2009-2014), this study analyzes the impact of CSR engagement onthe financial performance of a panel of banks extracted from the European banking industry.Consistent with the stakeholder theory and the resource-based view, empirical results suggestthat stable fiduciary relationships with stakeholders and good reputation allow banks to profitfrom CSR. Specifically, by applying the Heckman’s two-stage model (1976), our findings show thatthe more banks are engaged in socially responsible activities the more they outperform banksthat are less involved in CSR. In fact, as main sources of bank’s profit, Net interest income and theNon-interest income, are positively associated with a higher CSR commitment. Moreover, ahigher engagement in CSR is positively associated with a more efficient credit allocation, asmeasured by a lower incidence of NPL on total loans. Therefore, given the relevant role of bankswithin social and economic systems, the effects of CSR in the banking industry support a win-winmodel between interests of shareholders and stakeholders. This leads to a vision of CSR asstrategic tool to increase an enlarged value creation, both social and economic, by banks.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
