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CSR engagement and market structure: Evidence from listed banks

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  • Forgione, Antonio Fabio
  • Migliardo, Carlo

Abstract

According to the established literature, banks undertake social investment to compensate for the benefits enjoyed by the society. At first glance, one could expect more involvement in corporate social responsibility (CSR) from banks that have greater monopolistic power. However, this perspective would differentiate between banks and non-financial firms, since the latter use CSR engagement as a competitive lever. Thus, it follows that greater market pressure boosts a firm’s CSR investments. This conundrum has triggered the present analysis which, after estimating a Lerner index and then running a system-GMM regression, verified the impact of a firm’s monopolistic competition based on three scores pertaining to the listed banks’ CSR commitment. Our results support the view that the level of social responsibility of the banks’ management is affected by their markup on price.

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  • Forgione, Antonio Fabio & Migliardo, Carlo, 2020. "CSR engagement and market structure: Evidence from listed banks," Finance Research Letters, Elsevier, vol. 35(C).
    • Handle: RePEc:eee:finlet:v:35:y:2020:i:c:s1544612319314394
    DOI: 10.1016/j.frl.2020.101592
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    4. Mustafa Raza Rabbani & Abu Bashar & Iqbal Thonse Hawaldar & Muneer Shaik & Mohammed Selim, 2022. "What Do We Know about Crowdfunding and P2P Lending Research? A Bibliometric Review and Meta-Analysis," JRFM, MDPI, vol. 15(10), pages 1-23, October.
    5. Bruna, Maria Giuseppina & Lahouel, Béchir Ben, 2022. "CSR & financial performance: Facing methodological and modeling issues commentary paper to the eponymous FRL article collection," Finance Research Letters, Elsevier, vol. 44(C).
    6. Aracil, Elisa & Nájera-Sánchez, Juan-José & Forcadell, Francisco Javier, 2021. "Sustainable banking: A literature review and integrative framework," Finance Research Letters, Elsevier, vol. 42(C).
    7. Hossain, Ashrafee T. & Masum, Abdullah-Al, 2022. "Does corporate social responsibility help mitigate firm-level climate change risk?," Finance Research Letters, Elsevier, vol. 47(PB).
    8. Zhou, Chensong & Zhang, Xiangzhi & Xiong, Lingyun & Chen, Chuanyong, 2023. "Merger and acquisition performance commitments and shareholding reductions," Finance Research Letters, Elsevier, vol. 57(C).

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