The Effects of Corporate Social Responsibility on Bank Performance. Evidence from the Ghana Stock Exchange

Author(s)

Raphael Baku Kwame , Samuel Kofi Otchere , Caroline Christiana Anaglatey Coffie ,

Download Full PDF Pages: 89-99 | Views: 444 | Downloads: 105 | DOI: 10.5281/zenodo.6368167

Volume 11 - February 2022 (02)

Abstract

In today's society, there is a growing interest in and desire for Corporate Social Responsibility (CSR). The global economic impact of multinational firms, as well as controversies revealing horrible working conditions in many industries, could be issues.
Our research sampled banks in Ghana using annual financial statement over the period of 2017-2020. We analysed the data with regression model and the statistical package for social science (SPSS). The study also discovered that CSR policies had a beneficial impact on bank performance. As a result, bank executives understand and embrace corporate social responsibility in order to increase shareholder and other stakeholder value. To support the findings, several policy implications were presented.

Keywords

Corporate Social Responsibilities, Age, financial performance, Health, Ghana.

References

                 i.            Aguinis, H. and Glavas, A. “What we know and don’t know about corporate social Responsibility: a review and research agenda”, Journal of Management, (2012) Vol. 38 No. 4, pp. 932968.

      ii.            Ahamed, W.S.W.; Almsafir, M.K.; Al-Smadi, A.W. Does corporate social responsibility lead to improve in firm financial performance? Evidence from Malaysia. Int. J. Econ. Financ. 2014, 6, 126.43.

    iii.            Alexander chernev & Sean blair. “Doing well by doing good”: The benevolent Halo of Corporate Social Responsibility”. Journal of Consumer Research, vol. (2015) 41.doi:10.1086680089.

     iv.            Asch, S. E. “Forming impressions of personality”, Journal of Abnormal and social Psychology. (1946) 41 (3), 258-90.

       v.            Bauman, C.W. and Skitka, L.J. “Corporate social responsibility as a source of employee satisfaction”, Research in Organization Behavior, (2012), Vol. 32 No. 1, pp. 63-86.

     vi.            Bello, K. B., Jusoh, A., & Nor, K. M. Corporate social responsibility and consumer rights awareness: A research agenda. Indian Journal of Science and Technology, (2016). 9(46), 1–10. doi:10.17485/ijst/2016/v9i46/107134.

   vii.            Blowfield, M. & Murray, A. Corporate Responsibility. 2nd Edition. New York: Oxford University Press (2011).

 viii.            Branco, M. and L. C. Rodrigues: 2006, ‘Corporate Social Responsibility and Resource-Based Perspectives’, Journal of Business Ethics 69, 111–132.

     ix.            Boyle, E.J.; Higgins, M.M.; Rhee, G.S. Stock Market Reaction to Ethical Initiatives of Defense Contractors: Theory and Evidence. Crit. Perspective. Account. 1997, 8, 541–561.

       x.            Carrol, A. B., &Shabana, A. M. The business case for corporate social responsibility: A review of concepts, research and practice. International Journal of Management Reviews, (2010)12(1), 85–105. doi:10.1111/j.1468-2370.2009.00275. x.

     xi.            Charles Makanyeza, Tendai Linah Chitambara & Nicholas Zivengwa Kakava): Does Corporate Social Responsibility Influence Firm Performance? Empirical Evidence from Harare, Zimbabwe, Journal of African Business, (2017) DOI: 10.1080/15228916.2017.1410047

   xii.            Charles, G. Role of family resources in firm performance: Evidence from Tanzania. Journal of African Business, (2014). 15(2), 122–135. doi:10.1080/15228916.2014.920607.

 xiii.            De Bakker, F. G. A., Groenewegen, P., & den Hond, F. (2005). A bibliometric analysis of 30 years of research and theory on corporate social responsibility and corporate social performance. Business and Society Review, 44(3), 283–317.

 xiv.            Deegan, C., and Unerman, J., 2011. Financial accounting theory, McGraw-Hill, Sydney.

   xv.            Dowling, G.: 2006, ‘How Good Corporate Reputations Create Corporate Value’, Corporate Reputation Review 9, 134–143.

 xvi.            Freeman, R. E. Strategic management: A stakeholder approach. Boston, MA: Pitman. Cambridge: Cambridge University Press (1984). . doi:10.1017/CBO9780511815768.009.

xvii.            Fombrun, C. J.: 2006, ‘Corporate Governance’, Corporate Reputation Review 8, 267–271.

xviii.            Friedman, M. September 13 the social responsibility of business is to increase its profits. New York: New York Times Magazine. (1970)32–33, 122–124.

 xix.            Galant, A., & Cadez, S. (2017). Corporate social responsibility and financial performance relationship: A review of measurement approaches. Economic Research-Ekonomska Istraživanja, 30(1), 676-693. doi:10.1080/1331677X.2017.1313122.

   xx.            Gatewood, R. D., M. A. Gowan and G. J. Lautenschlager: 1993, ‘Corporate Image, Recruitment Image and Initial Job Choice’, Academy of Management Journal 36, 414–427

 xxi.            Green, Todd, and John Peloza, «How does corporate social responsibility create value for consumers?” Journal of consumer marketing, (2011)28 (1) 48-56. 

xxii.            Fombrun, C. J.: 2006, ‘Corporate Governance’, Corporate Reputation Review 8, 267–271.

xxiii.            Hammann, E., Habisch, A., Pechlaner, H., 2009. Values that create value: socially responsible business practices in SMEs --- empirical evidence from German companies. Bus. Ethics: Eur. Rev. 18 (1), 37---51.

xxiv.            Inoue, Y., & Lee, S. Effects of different dimensions of corporate social responsibility on corporate financial performance in tourism-related industries. Tourism Management, (2011) 32, 790–804. doi: 10.1016/j.tourman.2010.06.019.

xxv.            Inyang B.J., Small- and medium-sized enterprises engagement in CSR. In S.O. Idowu, N. Capaldi, L. Zu& A. D. Gupta (Eds.), Encyclopedia of Corporate social responsibility (2013) (4 vols). Heidelberg: Springer

xxvi.            Jamali, D.; Lund-Thomsen, P.; Jeppesen, S. SMEs and CSR in Developing Countries. Bus. Soc. (2017), 56, 11–22. 

xxvii.            Jensen, M., 2001. Value maximization, stakeholder theory and the corporate objective function. J. Appl. Corp. Finance 14 (3), 8---21.

xxviii.            Harrison, J.S, & Wicks, A.C, Stakeholder’s theory, value, and firm performance. Business Ethics Quarterly, (2013). 23(01), 97-124. Doi: 10.5840/beq20132314.

xxix.            Kang, C., Germann, F., & Grewal, Rewashing away your sins? Corporate social responsibility, corporate social irresponsibility, and firm performance. Journal of Marketing, (2016) 80, 59–79. doi:10.1509/jm.15.0324.

xxx.            Kirkland, S. (2015). Helping S corporations avoid unreasonable compensation audits.

xxxi.            Makanyeza, C., &Dzvuke, G.  The influence of innovation on the performance of small and medium enterprises in Zimbabwe. Journal of African Business, (2015)16(1–2), 198–214.doi:10.1080/15228916.2015.1061406.   

xxxii.            Marín, L., Rubio, A., 2008. ¿Moda o Factor Competitivo? Un Estudio Empírico de Responsabilidad Social Corporativa en PYMEs. Inf. Comercial Espanola ˜ Rev. Economía 842, 177---193.

xxxiii.            McQuitty, S., & Wolf, M. Structural equation modeling: A practical introduction. Journal of African Business, (2013) 14(1), 58–69. doi:10.1080/15228916.2013.765325

xxxiv.            Mingming Feng, Xiaodan "Abby" Wang, Jerry Glenn Kreuze, "Corporate Social Responsibility and Firm Financial Performance: Comparison Analyses across Industries and CSR Categories", American Journal of Business, doi.org/10.1108/AJB-05-2016.

xxxv.            Mohamed A. O & Dineshwar. R.  Theoretical perspective on Corporate Social Responsibility disclosure: A critical review. (2015) DOI:10.5296/ijafr.v5i2.8035.

xxxvi.            Oh, W. and S. Park, 2015. The relationship between corporate social responsibility and corporate financial performance in Korea. Emerging Markets Finance & Trade, 51(1): 85-94.

xxxvii.            Orlitzky, M. (2001). Does firm size confound the relationship between corporate social performance and firm financial performance? Journal of Business Ethics, 33, 167-180. doi:10.1023/A:1017516826427

xxxviii.            Ozçelik, F., Avci Oztürk, B., & Gürsakal, S. (2014). Investigating the relationship between CSR and financial performance in Turkey. Ataturk University.

xxxix.            Parker, L., 2005. Social and environmental accountability research: a view from the commentary box. Account. Auditing Account. J. 18 (6), 842---849.

     xl.            Peloza, J., 2009. The challenge of measuring financial impacts from investments in corporate social performance. J. Manage. 35 (6),1518---1541.

   xli.            Perrini, F. (2006). SMEs and CSR theory: Evidence and implications from an Italian perspective. Journal of business ethics, 67(3), 305-316. doi:10.1007/s10551-006- 9186-2

 xlii.            Perrini, F., Russo, A., Tencati, A., Vurro, C., 2011. Deconstructing the relationship between corporate social and financial performance. J. Bus. Ethics 102 (1 Supplement), 59---76.

xliii.            Pfau, M., M. Haigh, J. Sims and S. Wigley: 2008, ‘The Influence of Corporate Social Responsibility Campaigns on Public Opinion’, Corporate Reputation Review 11(2), 145–154.

xliv.            Rhou, Y., Singal, M., &Koh, Y.CSR and financial performance: The role of CSR awareness in the restaurant industry. International journal of Hospitality Management, (2016) 57, 30-39.doi: 10.1016/j.ijhm.2016.05.007.

 xlv.            Riordan, C. M., R. D. Gatewood and J. B. Bill: 1997, ‘Corporate Image: Employee Reactions and Implications for Managing Corporate Social Performance’, Journal of Business Ethics 16, 401–412.

xlvi.            Russo, A., Tencati, A. Formal Vs informal CSR strategies: evidence from Italian micro, small, medium-sized and large firms. Journal of Business Ethics, (2009) 85, 339–353.

xlvii.            Saeidi, S.P.; Sofian, S.; Saeidi, P.; Saeidi, S.P.; Saaeidi, S.A. How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. J. Business Research, (2015), 68, 341–350.

xlviii.            Samuel, O. M., & Mqomboti, S. Developing an Integrative CSR Model: Imperative for Cultural and Consultative Dimensions. Journal of African Business, (2017) 18(1), 50–69. doi:10.1080/15228916.2016.1219174.

xlix.            Shalit, S. S., & Sankar, U. (1977). The measurement of firm size. Review of Economics and Statistics, 59, 290-298. Retrieved from http://www.jstor.org

        l.            Spence, L. J., Schmidpeter, R., & Habisch, A. (2003). Assessing social capital: Small and medium sized enterprises in Germany and the UK. Journal of Business ethics,47(1), 17-29. Retrieved from https://www.jstor.org/journal/jbusiethiocial performance. J. Manage. 35 (6), 1518---1541

      li.            Supriti Mishra and Damodarsuar. “Does Corporate Social Responsibility influence firm Performance of Indian Companies?” Journal of Business Ethics, (2010) 95:571-601. DOI: 10.1007/s10551-010-04441-1. 

    lii.            Sweeney, L., (PhD thesis) 2009. A Study of Current Practice of Corporate Social Responsibility (CSR) and an Examination of the Relationship between CSR and Financial Performance Using Structural Equation Modelling (SEM). Dublin Institute of Technology.

  liii.            Torugsa, N.A.; O’Donohue, W.; Hecker, R. Capabilities, proactive CSR and financial performance in SMEs: Empirical evidence from an Australian manufacturing industry sector. J. Bus. Ethics (2012), 109, 483–500.

   liv.            Vázquez-Carrasco, R. López-Pérez, M. E.  Small & medium-sized enterprises and Corporate Social Responsibility: a systematic review of the literature. Quality and Quantity, (2012) 47, 3205–3218. Vo, L.C. Corporate social responsibility and SMEs: A literature review and agenda for future research.

     lv.            Probl. Perspect. Manag. (2011), 9, 89–97. Wang, H., Tong, L., Takeuchi, R., & George, G. Corporate social responsibility: An overview and new research directions. Academy of Management Journal, (2016) 59: 534–544.

   lvi.            Wright, P.; Ferris, S.P. Agency Conflict and Corporate Strategy: The Effect of Divestment on Corporate Value. Strategic. Management Journal. (1997), 18, 77–83.

Raphael Baku Kwame, The Effects of Corporate Social Responsibility on Bank Performance. Evidence from the Ghana Stock Exchange, International Journal of Management Sciences and Business Research 02(2022):89-99 DOI: 10.5281/zenodo.6368167