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

Forthcoming at Asia-Pacific Journal of Accounting and Economics

43 Pages Posted: 18 Oct 2019

See all articles by Mahfuja Malik

Mahfuja Malik

Boston University; Sacred Heart University

Md Al Mamun

La Trobe University - Department of Economics and Finance

Abu S. Amin

Central Michigan University

Date Written: April 9, 2019

Abstract

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

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

Mahfuja Malik

Boston University ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

Sacred Heart University ( email )

5151 Park Ave
Fairfield, CT 06432
United States

Md Al Mamun

La Trobe University - Department of Economics and Finance ( email )

Melbourne, 3086

Abu S. Amin (Contact Author)

Central Michigan University ( email )

329 Sloan Hall
Mt Pleasant, MI Michigan 48858
United States
9897747621 (Phone)
9897746456 (Fax)

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