Corporate social responsibility and bank performance: the role of bank financial stability
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Date
2023
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KNUST
Abstract
The objective of the study was to investigate the moderating effect of bank financial stability on the nexus between corporate social responsibility and bank performance. Secondary data is collected from the annual reports of commercial banks in Ghana in order to provide information for this research. The data spanned the years 2010 to 2021. The study sampled 16 commercial banks. The design for study was explanatory since it explains the relationship among the variables. The regression method employed was fixed effect regression. The study found that CSR spending among banks in Ghana shows significant variation, indicating different levels of commitment and resource allocation. Some banks, like GCB, ECOBANK, and ADB, demonstrate a strong commitment to CSR, while ABSA and Prudential bank did not disclose their spending. The analysis revealed that increased CSR activities positively impact both Return on Assets (Coeff= 0.026191; p-value=0.00) and Return on Equity (Coeff= 0.166342; p value=0.00) for banks. The finding further showed that the interaction between CSR and financial stability (FSTB) had a positive and significant effect on both ROA (Coeff= 0.000053; p-value=0.08) and ROE (Coeff= 0.178413; p-value=0.00). Banks should enhance their CSR initiatives by allocating sufficient resources and developing strategic plans to align their activities with social and environmental goals. This can include investing in community development, environmental sustainability, financial education, and supporting social causes relevant to their stakeholders
Description
A thesis submitted to the department of accounting and finance, college of humanities and social sciences, in partial fulfillment of the requirements for the degree of master of science in accounting and finance