COMPLETED - Bank’s benefiting from the CSR
BANK’S BENEFITING FROM THE CSR: INFLUENCE ON PERFORMANCE AND COST OF DEBT
THE PROJECT ORIGIN
The project was initiated by the researchers from the International Center for Banking and Corporate Governance, participants of the International conference “Improving financial institutions: the proper balance between regulation and governance” held at Hanken School of Economics (April 19th, 2012, Hanken, Finland).
THE PROJECT CONTENT
As a result of the combination of the economic and financial crisis with what has been called an entrepreneurial crisis of maturity, Corporate Social Responsibility (CSR) has risen to prominence in the last few years. Even though CSR is a new controversial concept, the majority of researches in the academic and business spheres agree that it is a fundamental strategy for achieving the sustainable development that our globalized world needs. But recent crises showed that even banks that proclaimed strong Corporate Governance (CG) and CSR positions in their business suffered catastrophically and in fact showed total neglecting and inefficiency of the mentioned issues in their activity. This raises many questions about the specific of the CSR in banks, its efficiency and possible benefits for banks in different conditions of the economic conjuncture.
THE PROJECT AIMS
This project aims are to study the specifics of the CSR in banks, to examine previous research and to indicate the main possible benefits that authors observe in their works. The key goal of the project is to test empirically abovementioned statements and hypothesis about impact of the CSR practices on the bank’s activity and to provide structural, constructive recommendations for the banks management, concerning CSR policies and procedures of the bank; for regulative bodies, concerning outcomes that could be brought by the neglecting of this issue and nature of the required regulative measures; NGOs, Stock Exchanges and other institutions that deal with banking activity.
THE PROJECT’S STAGES
The first section of the paper is represented by the introduction and literature review.
The second section could provide an overview of corporate social responsibility in banks. This involves a debate on the main features and nature of the CSR, beneficial points that could be gained by bank.
The third section focuses on the measurement of the CSR in banks, study of the existing measures or attempt to implement a new one. This section is also devoted to the picking up performance indicators that will be involved into the research, what parameters of the bank’s activity should be examined, whether it will be stock prices, cost of debt, profit, risk management and so on. Main hypothesis of the research are proposed in this section.
The fourth section contains the methodology. Based on the measurement for CSR that was described in the previous section and indicators of the banking activity, independent and dependent variables of the model are describes. Countries and banks that are picked up for the research sample are indicated here.
The fifth section consists of empirical results of the research.
The last section contains the summary and conclusions.
THE PROJECT DEADLINES
Results of the joint research are planned to be presented on the scientific conferences in France (Paris) in April 2013 and Ukraine (Academy of Banking, Sumy) in May 2013.
- introduction - October 2012,
- theoretical research – end of November 2012,
- model building, testing hypothesis and main findings – December 2012-February 2013,
- paper key points and policy implications – March 2013.
THE PROJECT TEAM
Udo Braendle (UK); Yaroslav Mozghovyi (Ukraine)
Yaroslav Mozghovyi, PhD researcher, International Center for Banking and Corporate Governance, Ukrainian Academy of Banking of the National Bank of Ukraine (Ukraine)