Banking efficiency under corporate social responsibilities

TY - JOUR

T1 - Banking efficiency under corporate social responsibilities

AU - Ohene-Asare, Kwaku

AU - Asmild, Mette

PY - 2012/8

Y1 - 2012/8

N2 - This paper expands the banking efficiency literature by developing a banking intermediation model that captures both profit-maximising and corporate social responsibilities (CSRs) of banks. Using a dataset of 21 banks for each year 2006 to 2008, we evaluate the relative efficiency of Ghanaian banks using data envelopment analysis (DEA) thus contributing to the scanty research on African banks. We observe a significant difference between the DEA model that includes CSR and the other without CSR, an indication that the inclusion of CSR may be important for bank efficiency assessment. As a further analysis, we use a second stage OLS regression which confirms a positive relationship between CSR and profitability and efficiency indicators. The findings suggest that considering CSR in efficiency assessment of banks is not only important on conceptual grounds, but also indicates that banks that are socially responsible may have economic advantages.

AB - This paper expands the banking efficiency literature by developing a banking intermediation model that captures both profit-maximising and corporate social responsibilities (CSRs) of banks. Using a dataset of 21 banks for each year 2006 to 2008, we evaluate the relative efficiency of Ghanaian banks using data envelopment analysis (DEA) thus contributing to the scanty research on African banks. We observe a significant difference between the DEA model that includes CSR and the other without CSR, an indication that the inclusion of CSR may be important for bank efficiency assessment. As a further analysis, we use a second stage OLS regression which confirms a positive relationship between CSR and profitability and efficiency indicators. The findings suggest that considering CSR in efficiency assessment of banks is not only important on conceptual grounds, but also indicates that banks that are socially responsible may have economic advantages.

U2 - 10.1504/ijbaaf.2012.048331

DO - 10.1504/ijbaaf.2012.048331

M3 - Journal article

SN - 1755-3830

VL - 4

SP - 146

EP - 171

JO - International Journal of Banking, Accounting and Finance

JF - International Journal of Banking, Accounting and Finance

IS - 2

ER -