Corporate social responsibility and bank liquidity creation during financial crises
Journal
European Financial Management
ISSN
1354-7798
1468-036X
Date Issued
2024-05-29
Author(s)
Wei-Da Chen
DOI
10.1111/eufm.12498
Abstract
Using a sample of US banks, this paper investigates how corporate social responsibility (CSR) performance affects bank liquidity creation in financial crises. It shows that banks with better CSR performance reduce more liquidity creation in crises. This effect is stronger for banks with lower Z-scores or higher earnings volatility. In addition, the results are driven by bank CSR performance related to community, employee relations and diversity. These results are consistent with the notion that banks with good CSR performance reduce liquidity creation to avoid financial distress, which would hurt their employees and the communities they serve.
Subjects
banking crises
corporate social responsibility
distress risk
liquidity creation
market crises
Publisher
Wiley
Type
journal article