Empirical study on the correlation of corporate social responsibility with the banks efficiency and stability

T., Vasylieva and A., Lasukova (2013): Empirical study on the correlation of corporate social responsibility with the banks efficiency and stability. Published in: Corporate ownership & Control , Vol. 10, No. 4 (2013): pp. 86-93.

Abstract

The aim of this paper is to investigate the relationship between the corporate social responsibility concept and the most important characteristics of the banking – efficiency and stability in a sample of twelve Ukrainian banks, which are the biggest one in Ukraine according the National bank of Ukraine (NBU) classification. Our research covers the period from 2006 to 2012. Drawing on the literature review, we pointed out two main hypothesis related to the impact on the corporate social responsibility concept (CSR) of the following independent variables: 1 – efficiency (as a short term period characteristics of banking), 2 – stability (as a long term characteristics of banking).

• Item Type: MPRA Paper
• Language: English
• Keywords: bank, corporate social responsibility, efficiency, stability, sustainable development
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C33 - Panel Data Models ; Spatio-temporal Models; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C58 - Financial Econometrics; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration > M14 - Corporate Culture ; Diversity ; Social Responsibility

References

McGuire, J., Sundgren, A., Schneeweis, T. 1988 “Corporate social responsibility and firm financial performance”, Academy of Management Journal, No 31 (4), pp.854-872.

McWilliams, A., Siegel, D. 2000 “Corporate social responsibility and financial performance: Correlation or misspecification?”, Strategic Management Journal, No 21 (5), pp. 603-609.

Waddock, S. A., Samuel, B. G. 1997 “The corporate social performance – financial performance link.” Strategic Management Journal, no 18 (4), pp. 303-319

Cochran, P. L., and R. A. Wood 1984 “Corporate social responsibility and financialperformance.” Academy of Management Journal, no 27 (1), pp. 42-56.

Orlitzky, M., Schmidt, F., Rynes, S. 2003 “Corporate social and financial performance: A meta-analysis”, Organization Studies, vol. 24, no. 3, pp. 403.

Aupperle, K. E., Carroll, A. B., Hatfield, J. D. 1985 “An empirical examination of the relationship between corporate social responsibility and profitability”, Academy of Management Journal, No 28 (2), pp. 446-463.

Moskowitz, M. 1972 “Choosing socially responsible stocks.” Business and SocietyReview, no 1, pp. 71-75.

Alexander, G. J., and Rogene A. Buchholz 1978 “Corporate social responsibility and stock market performance.” Academy of Management Journal, no 21 (3), pp. 479-486.

Keffas, G., Olulu-Briggs, O. 2011”Corporate social responsibility: how does it affect the financial performance of banks? Empirical evidence from US, UK and Japan”, Journal of Management and Corporate Governance, Vol. 3 (March), pp. 8-26.

Roman, R. M., S. Hayibor, and B. R. Agle (1999) “The relationship between social andfinancial performance.” Business & Society, 38: 109-125.

Ullmann, A. 1985, “Data in search of a theory: a critical examination of the relationship among social performance, social disclosure, and economic performance”, Academy of Management Review, no10, pp. 450–477.

Financial Soundness Indicators: Compilation Guide 2006, International Monetary Fund, Publication Services, Washington, D.C., 300 p. <http://www.imf.org/external/pubs/ft/fsi/guide/2006/index.htm>

Khailuk, S. O., Melnyk, T. M. (2010) “Using nonparametric methods for evaluating the efficiency, effectiveness and productivity of domestic banks,” Aktyalni problemy ekonomiky, 11 (113), pp. 263-276 (In Ukrainian)

Roy, A.D. 1952 “Safety First and the Holding of Assets”, Econometrica, no 20., pp. 431-449

Čihák, Martin, 2006, “How Do Central Banks Write on Financial Stability?” IMF Working Paper, no 06/163 (Washington: International Monetary Fund)

Boyd, John H., and David E. Runkle, 1993, “Size and Performance of Banking Firms,” Journal of Monetary Economics, Vol. 31, pp. 47–67.

Maechler, Andrea, Srobona Mitra, and DeLisle Worrell, 2005, “Exploring Financial Risks and Vulnerabilities in New and Potential EU Member States,” Second Annual DG ECFIN Research Conference: “Financial Stability and the Convergence Process in Europe,” October 6–7.

Schaeck, Klaus, Martin Čihák, and Simon Wolfe, 2006, “Are More Competitive Banking Systems More Stable?,” IMF Working Paper 06/143 (Washington: International Monetary Fund).

Battese, G. 1995 “A model for technical inefficiency effects in a stochastic frontier production function for panel data” / G. Battese, T. Coelli/ Empirical Economics, no 20, pp. 325-332.

Berger, A. 1997 “Efficiency of financial institutions: International survey and directions for future research”, European Journal of Operational Research, no 98(2), pp. 175-212.

Buriak, A. V. (2012) Banking performance management : the dissertation for reception of scientific degree of candidate of economic science on speciality 08.00.08 – Money, finance and credit. – State Higher Educational Institution “Ukrainian Academy of Banking of the National Bank of Ukraine”,Sumy. – 268 p. (In Ukrainian)

Frontier V4.1: Centre for Efficiency and Productivity Analysis <http://www.uq.edu.au/economics/cepa/frontier.php>