Socially Responsible Lending

46 Pages Posted: 2 Aug 2014 Last revised: 1 Feb 2017

See all articles by Yizhe Dong

Yizhe Dong

University of Edinburgh Business School

Rong Ding

University of Warwick

Wenxuan Hou

University of Edinburgh - Business School; Shanghai Lixin University of Accounting and Finance

Weiwei Yang

University of Bedfordshire

Date Written: January 2, 2017

Abstract

This paper studies socially responsible lending (SRL) by examining a unique sample of Chinese commercial banks. We define SRL as loans that are issued to promote social welfare, preserve the environment, develop agriculture, or support small business. We find that state-controlled banks issue less SRL than private banks, which rely on SRL to build credibility and enhance corporate image. Among state-owned banks, central-government-controlled ones respond to SRL-related polices more actively than others. The public sector experience of board directors is associated with more SRL. Finally, board independence and better-educated directors are found to increase SRL.

Keywords: Socially responsible lending; corporate social responsibility; bank; state ownership; ownership structure; China

JEL Classification: G20; G30; G32

Suggested Citation

Dong, Yizhe and Ding, Rong and Hou, Wenxuan and Yang, Weiwei, Socially Responsible Lending (January 2, 2017). Available at SSRN: https://ssrn.com/abstract=2474722 or http://dx.doi.org/10.2139/ssrn.2474722

Yizhe Dong

University of Edinburgh Business School ( email )

Old College
South Bridge
Edinburgh, Scotland EH8 9JY
United Kingdom

Rong Ding

University of Warwick ( email )

Warwick Business School
University of Warwick
Coventry, CV4 7AL
United Kingdom

Wenxuan Hou (Contact Author)

University of Edinburgh - Business School ( email )

University of Edinburgh
29 Buccleuch Place
Edinburgh, Scotland EH8 9JS
United Kingdom

HOME PAGE: http://www.wenxuanhou.com

Shanghai Lixin University of Accounting and Finance ( email )

Weiwei Yang

University of Bedfordshire ( email )

Vicarage St
Luton, LU1 3JU
United Kingdom

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