Corporate Social Responsibility And Financial Performance: Empirical Evidence From Joint Stock Commercial Banks In Vietnam

Abstract

The study examines and evaluates the impacts of corporate social responsibility on the financial performance of Vietnamese joint stock commercial banks during the period of 2011 - 2022. Based on the findings, the research team provides recommendations to support joint stock commercial banks in improving operational efficiency through socially responsible actions. Initially, the research team reviewed prior studies on the relationship between corporate social responsibility and financial performance. In the study model, return on assets (ROA) and return on equity (ROE) were selected as the dependent financial measures. The sample includes 22 listed joint stock commercial banks in Vietnam. Potential model errors were tested and the generalized least squares (GLS) method was applied to address biases. The research team identified corporate social responsibility variables and their influence on banks' financial performance based on theoretical and empirical grounds. The ROE indicator showed six factors affecting banks' financial performance, including corporate income tax paid by banks in the year, labor costs, management quality, bank size, and inflation rate. The variables impacting ROA were similar to ROE, with the addition of community and charitable variables. Based on the findings, the research team proposed policy recommendations and limitations of the study to outline future research directions.