Greed or Good Deeds: An Examination of the Relation between Corporate Social Responsibility and the Financial Performance of U.S. Commercial Banks around the Financial Crisis

70 Pages Posted: 1 Oct 2013 Last revised: 23 Apr 2016

See all articles by Marcia Millon Cornett

Marcia Millon Cornett

Bentley University - Department of Finance

Otgontsetseg Erhemjamts

Bentley University - Department of Finance; Bentley University

Hassan Tehranian

Boston College - Department of Finance

Date Written: March 8, 2016

Abstract

We examine the relation between banks’ corporate social responsibility (CSR) and financial performance in a context of the recent financial crisis. We find that banks, in general, appear to be rewarded for being socially responsible as financial performance is positively and significantly related to CSR scores. We find that the biggest banks pursue socially responsible activities to a significantly greater extent than smaller banks. Further, the largest banks see a steep increase in CSR strengths and a steep drop in CSR concerns after 2009.

Keywords: corporate social responsibility, firm performance, commercial banks

JEL Classification: G21, L21, L25, M14

Suggested Citation

Cornett, Marcia Millon and Erhemjamts, Otgontsetseg and Tehranian, Hassan, Greed or Good Deeds: An Examination of the Relation between Corporate Social Responsibility and the Financial Performance of U.S. Commercial Banks around the Financial Crisis (March 8, 2016). Journal of Banking and Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2333878 or http://dx.doi.org/10.2139/ssrn.2333878

Marcia Millon Cornett

Bentley University - Department of Finance ( email )

175 Forest Street
Waltham, MA 02154
United States

Otgontsetseg Erhemjamts

Bentley University - Department of Finance ( email )

175 Forest Street
Waltham, MA 02154
United States
781-891-2823 (Phone)

Bentley University ( email )

175 Forest Street
Waltham, MA 02145
United States
781-891-2823 (Phone)
781-891-2896 (Fax)

Hassan Tehranian (Contact Author)

Boston College - Department of Finance ( email )

Carroll School of Management
140 Commonwealth Avenue
Chestnut Hill, MA 02467-3808
United States
617-552-3944 (Phone)
617-552-0431 (Fax)

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