Corporate social responsibility and bank liquidity creation

Abstract

Under the stakeholder theory hypothesis, reputable corporate social responsibility (CSR) banks are expected to attract more loans and deposits, which in turn strengthens their ability to create liquidity. Our findings support this view. Further analyses reveal that the positive effect of CSR on liquidity creation differs depending on bank size, bank capital, and type of financial crisis. In addition, deposit growth, loan growth, lending rate, and funding rate are potential channels through which CSR influences bank liquidity creation. The findings are not driven by an endogeneity issue.

Document Type

Journal Article

Date of Publication

6-1-2023

Volume

46

Issue

2

Publication Title

Journal of Financial Research

Publisher

Wiley

School

School of Business and Law

RAS ID

54554

Funders

Accounting and Finance Association of Australia and New Zealand (AFAANZ), Grant Number: AFAANZ Research Grant 2019

Comments

Zheng, C., Cheung, A., Zhang, J., & Haider, I. (2023). Corporate social responsibility and bank liquidity creation. Journal of Financial Research, 46(2), 343-382. https://doi.org/10.1111/jfir.12322

Copyright

subscription content

First Page

343

Last Page

382

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Link to publisher version (DOI)

10.1111/jfir.12322