Is better banking performance associated with financial inclusion and mandated CSR expenditure in a developing country?

Bhattacharyya, A; Wright, S; Rahman, ML

Is better banking performance associated with financial inclusion and mandated CSR expenditure in a developing country?

Bhattacharyya, A Wright, S

Rahman, ML

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Publisher:: WILEY
Publication Type:: Journal Article
Citation:: Accounting and Finance, 2021, 61, (1), pp. 125-161
Issue Date:: 2021-03-01

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Field	Value	Language
dc.contributor.author	Bhattacharyya, A
dc.contributor.author	Wright, S https://orcid.org/0000-0001-8634-1428
dc.contributor.author	Rahman, ML
dc.date.accessioned	2021-12-20T23:52:45Z
dc.date.available	2021-12-20T23:52:45Z
dc.date.issued	2021-03-01
dc.identifier.citation	Accounting and Finance, 2021, 61, (1), pp. 125-161
dc.identifier.issn	0810-5391
dc.identifier.issn	1467-629X
dc.identifier.uri	http://hdl.handle.net/10453/152426
dc.description.abstract	Motivated by legislation mandating CSR expenditure to improve social equality and economic development in India, we examine the association of CSR expenditure and financial inclusion with the performance of banking firms in the period after introduction of the legislation. We study whether mandated CSR expenditure and/or financial inclusion measures are associated with better financial performance, using both accounting and stock market measures of performance, for Indian banks during 2015–2017. Our results demonstrate that level of CSR expenditure and degree of financial inclusion is not associated with banks’ financial performance when performance is measured in accounting terms. However, a significant negative association is found when performance is measured by stock market return. These results suggest that the current design of the legislation is unlikely to achieve its purpose. This is the first study to present clear evidence on the associations of mandatory CSR spending and firm-level financial inclusion with accounting-based and market-based bank performance.
dc.language	English
dc.publisher	WILEY
dc.relation.ispartof	Accounting and Finance
dc.relation.isbasedon	10.1111/acfi.12560
dc.rights	info:eu-repo/semantics/closedAccess
dc.subject	1402 Applied Economics, 1501 Accounting, Auditing and Accountability, 1502 Banking, Finance and Investment
dc.subject.classification	Accounting
dc.title	Is better banking performance associated with financial inclusion and mandated CSR expenditure in a developing country?
dc.type	Journal Article
utslib.citation.volume	61
utslib.for	1402 Applied Economics
utslib.for	1501 Accounting, Auditing and Accountability
utslib.for	1502 Banking, Finance and Investment
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Accounting Discipline
utslib.copyright.status	closed_access	*
dc.date.updated	2021-12-20T23:52:44Z
pubs.issue	1
pubs.publication-status	Published
pubs.volume	61
utslib.citation.issue	1

Abstract:

Motivated by legislation mandating CSR expenditure to improve social equality and economic development in India, we examine the association of CSR expenditure and financial inclusion with the performance of banking firms in the period after introduction of the legislation. We study whether mandated CSR expenditure and/or financial inclusion measures are associated with better financial performance, using both accounting and stock market measures of performance, for Indian banks during 2015–2017. Our results demonstrate that level of CSR expenditure and degree of financial inclusion is not associated with banks’ financial performance when performance is measured in accounting terms. However, a significant negative association is found when performance is measured by stock market return. These results suggest that the current design of the legislation is unlikely to achieve its purpose. This is the first study to present clear evidence on the associations of mandatory CSR spending and firm-level financial inclusion with accounting-based and market-based bank performance.

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http://hdl.handle.net/10453/152426