The impacts of competition and corporate social responsibility on commercial banks’ stability

Purpose This research examines how bank competition and corporate social responsibility (CSR) affect the stability of Vietnamese commercial banks. Design/methodology/approach Utilizing data collected from 24 commercial banks spanning the period from 2015 to 2022, the paper employs the two-step system generalized method of moments (SGMM) regression method to find the impact of competition and CSR on commercial banks’ stability in Vietnam. Findings The key findings are (1) increased competition boosts commercial bank stability; (2) economic and environmental CSR initiatives adversely affect bank stability, while social CSR has a positive impact; (3) seven other factors are also identified to enhance bank stability, including bank size, cost management efficiency, independent management, inflation, gross domestic product (GDP) growth, monetary policy and volatility time. Originality/value Prior studies have not concurrently incorporated both CSR and bank competition in their investigations of bank financial stability. Specifically, the comprehensive components of CSR remain underexplored, with a predominant focus on its environmental dimension. This research stands out as one of the few endeavors scrutinizing the influence of competition and CSR on commercial bank financial stability in Vietnam, with a detailed investigation of all three components of CSR. Peer review The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-04-2024-0316

Business · Corporate social responsibility · Economics · Financial stability · Financial system · Market economy · Political science · Public relations · Social responsibility · Banking stability, regulation, efficiency · Corporate Finance and Governance · Islamic Finance and Banking Studies

• Theory of the firm

  Open Access•Michael C Jensen, William H Meckling•Journal of Financial Economics•1976

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