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Journal Articles International Journal of Business Governance and Ethics Year : 2024

Investment in ESG activities and bank performance: does bank ownership matter?

Abstract

In this paper, we investigate the relation between environmental, social and governance (ESG) activities and bank performance in European markets. Different from existing literature, we also explore whether ESG activities differently affect the performance of foreign-owned banks and domestic-owned banks. The results show that higher involvement in ESG activities is associated with better performance only for foreign-owned banks, and suggest that investment in ESG activities is relevant for foreign banks since it helps to obtain legitimacy in foreign markets, and enhance their reputation on international level. Our findings provide a better understanding of whether a banks ESG activities are in the interest of shareholders, and partially explain the contradictory results in previous studies.
In this paper, we investigate the relation between Environmental, Social and Governance (ESG) activities and bank performance in European markets. Different from existing literature, we also explore whether ESG activities differently affect the performance of foreign-owned banks and domestic-owned banks. The results show that higher involvement in ESG activities is associated with better performance only for foreign-owned banks, and suggest that investment in ESG activities is relevant for foreign banks since it helps to obtain legitimacy in foreign markets, and enhance their reputation on international level. Our findings provide a better understanding of whether a bank’s ESG activities are in the interest of shareholders, and partially explain the contradictory results in previous studies.
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Origin : Files produced by the author(s)
Origin : Files produced by the author(s)

Dates and versions

hal-03859287 , version 1 (15-05-2024)

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Marc Kouzez, Ji-Yong Lee, Jomana Leroux. Investment in ESG activities and bank performance: does bank ownership matter?. International Journal of Business Governance and Ethics, In press, 18 (4/5), ⟨10.1504/IJBGE.2023.10053288⟩. ⟨hal-03859287⟩
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