Impact of Corporate Social Responsibility on the Performance of the Banking Sector: Case of United Arab Emirates
Palavras-chave:
Corporate Social Responsibility, Financial Performance, Panel Data, Random Effects, Sustainability, Regression Analysis, Ratio Analysis, CSR Scale, CSR expenditure, CSR commitment, Emerging Economies, United Arab EmiratesResumo
Purpose: The link between the Corporate Social Responsibility (CSR) and a firm"™s financial performance is yet to be explored in the emerging economies, without a consensus on the measure of CSR in the extant research available. Therefore, the purpose of this study is to suggest a scale for CSR measure which encompasses a holistic approach and to establish a link based on the scale developed between CSR and financial performance of the Banking Industry in United Arab Emirates (UAE).
Design/methodology/approach: The study analyses data from all commercial banks listed in UAE from 2012-2019. The study uses the panel regression model to control unobserved time-constant heterogeneity.
Findings: CSR expenditure and CSR commitment have a significant relationship with bank profitability. While CSR expenditure has a negative relationship, the latter is positively related to profitability.
Originality: This is one of the first studies to quantify CSR on a scale, and empirically evaluate its significance on firm profitability for an emerging economy.
Research Limitations: The inadequacy of information about CSR, and the lack of consistent reporting format presented obstacles in the data collection process.
Practical Implications:Â This research focuses on sustainability theory by practicing CSR, where we research and offer practical advice for the development of tools, practical case studies for UAE and emerging economies.
