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Selectivity and Transparency in Social Banking: Evidence from Europe

Listed author(s):
  • Simon S. Cornée
  • Panu Kalmi
  • Ariane Szafarz

Abstract: How do social banks signal their social commitment to motivated funders? We hypothesize that two main channels are used: selectivity and transparency. We test these predictions using a rich dataset comprising balancesheet information on 5,000 European banks over the period from 1998 to 2013. The results suggest that social screening leads social banks to higher project selectivity compared to mainstream banks. Social banks also tend to be more transparent than other banks. However, combining selectivity and transparency can result in excess liquidity. Overall, the empirical findings not only confirm our theoretical hypotheses, but also raise challenging issues regarding the management of social banks.

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Paper provided by ULB -- Universite Libre de Bruxelles in its series ULB Institutional Repository with number 2013/231083.

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Date of creation: Apr 2016
Publication status: Published in: Journal of economic issues (2016) v.50 n° 2,p.494-502
Handle: RePEc:ulb:ulbeco:2013/231083
Note: SCOPUS: ar.j
Contact details of provider: Postal:
CP135, 50, avenue F.D. Roosevelt, 1050 Bruxelles

Web page: http://difusion.ulb.ac.be

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