The Impact of Social Responsibility Performance on the Value Relevance of Financial Data in the Banking Sector: Evidence from Poland

Corporate social responsibility (CSR) is inevitably becoming an increasingly important part of almost every business. This is particularly true for the banking industry, which suffered substantial losses in reputation and public trust in the aftermath of the global financial crisis. Not surprisingly...

Full description

Saved in:
Bibliographic Details
Published in:Sustainability 2021-11, Vol.13 (21), p.12006
Main Author: Bolibok, Piotr
Format: Article
Language:English
Subjects:
Banking industry
Business models
Equity
Financial disclosure
Financial performance
International finance
Investments
Market value
Regression analysis
Reputations
Social responsibility
Stakeholders
Stock exchanges
Sustainability
Transition economies
Trust
Values
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Corporate social responsibility (CSR) is inevitably becoming an increasingly important part of almost every business. This is particularly true for the banking industry, which suffered substantial losses in reputation and public trust in the aftermath of the global financial crisis. Not surprisingly therefore, banks around the world have visibly intensified their CSR efforts. One of the key dimensions of CSR regards the reliability and transparency of a firm’s communication with the market, which suggests that information disclosed by responsible companies may be more value relevant. The related evidence, especially in the banking sector, is however modest and mixed. The paper aims, therefore, at empirical investigation of the impact of social responsibility performance on the value relevance of financial data in the Polish banking sector. The research employs multivariate regression analysis based on the Ohlson model and the Chow test for structural breaks. The examined sample covers 154 bank-year observations of 17 banks listed on the Warsaw Stock Exchange from 2009–2020. The results suggest that financial disclosures of banks included in CSR indices are generally more value relevant. Additionally, more responsible banks exhibit higher (lower) responsiveness of market values to net earnings (book values of equity) compared to their less socially responsible counterparts.
ISSN:2071-1050
2071-1050
DOI:10.3390/su132112006