Peer Pressure, CSR Spending, and Long-Term Financial Performance

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

Malik, Mahfuja and Al Mamun, Md and Amin, Abu S., Peer Pressure, CSR Spending, and Long-Term Financial Performance (April 9, 2019). Forthcoming at Asia-Pacific Journal of Accounting and Economics, Available at SSRN: https://ssrn.com/abstract=3466560 or http://dx.doi.org/10.2139/ssrn.3466560