Peer Pressure, CSR Spending, and Long-Term Financial Performance
Forthcoming at Asia-Pacific Journal of Accounting and Economics
43 Pages Posted: 18 Oct 2019
Date Written: April 9, 2019
This study investigates the role of peer pressure on banks’ Corporate Social Responsibility (CSR) activities and the long-term impacts of their CSR spending on financial performance. We find that a bank’s CSR expenditure increases with that of its peer-banks. However, there is no association between a bank’s CSR expenditure and that of banks of its non-peer group. Additional analysis suggests that a bank’s CSR spending increases not only the current profitability but also its future profitability. This study establishes the evidence of the peer pressure on CSR spending, and the value of CSR in terms of short- and long-term benefits.
Keywords: Corporate Social responsibility, peer pressure, banking industry, profitability
JEL Classification: G30, G39
Suggested Citation: Suggested Citation