On the Relation between Credit market disruption and Corporate Social Responsibility

Int. J. of Business and Emerging Markets

46 Pages Posted: 13 Dec 2019 Last revised: 3 Sep 2021

See all articles by Austin Dejan

Austin Dejan

UNIVERSITY OF HOUSTON-DOWNTOWN

M. Kabir Hassan

University of New Orleans - College of Business Administration - Department of Economics and Finance

Ibrahim Siraj

Arja H. Turunen-Red

University of New Orleans - College of Business Administration - Department of Economics and Finance

Date Written: January 1, 2021

Abstract

We exploit the staggered nature of interstate banking and branching deregulation of the U.S. to examine the causal impact of bank competition on corporate socially responsible (CSR) activities. We find strong and robust evidence that bank deregulation significantly and negatively affects the CSR activities. Firms operating in high margin industry with low market power, and financially constrained firms operating in external finance dependent industries tend to predominantly show such a negative relationship between deregulation and CSR activities. Overall, our findings imply that deregulation-led rising competition in the product market makes the non-financial firms more concerned about protecting the interests of shareholders than other stakeholders. Our results are robust to the use of alternative empirical specifications and CSR measures.

Keywords: Banking Competition, Product Market Competition, Social Responsibility, Access to Finance

JEL Classification: D43, G21, M14, O16

Suggested Citation

Dejan, Austin and Hassan, M. Kabir and Siraj, Ibrahim and Turunen-Red, Arja H., On the Relation between Credit market disruption and Corporate Social Responsibility (January 1, 2021). Int. J. of Business and Emerging Markets, Available at SSRN: https://ssrn.com/abstract=3457944 or http://dx.doi.org/10.2139/ssrn.3457944

Austin Dejan

UNIVERSITY OF HOUSTON-DOWNTOWN ( email )

M. Kabir Hassan

University of New Orleans - College of Business Administration - Department of Economics and Finance ( email )

2000 Lakeshore Drive
New Orleans, LA 70148
United States

Arja H. Turunen-Red

University of New Orleans - College of Business Administration - Department of Economics and Finance ( email )

2000 Lakeshore Drive
New Orleans, LA 70148
United States
504-280-6912 (Phone)
504-280-6397 (Fax)

HOME PAGE: http://www.uno.edu/~aturunen/

No contact information is available for Ibrahim Siraj

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