The impacts of corporate social responsibility to corporate financial performance: A case study of Vietnamese commercial banks

Figures & data

Table 1. Description of variables and symbols in the models

Symbol	Describe	Determination formula	Data Source
Dependent variables (CFP)
NIM	The net interest margin	$\mathrm{N}\mathrm{I}\mathrm{M}=\frac{\mathrm{N}\mathrm{e}\mathrm{t}\mathrm{i}\mathrm{n}\mathrm{t}\mathrm{e}\mathrm{r}\mathrm{e}\mathrm{s}\mathrm{t}\mathrm{i}\mathrm{n}\mathrm{c}\mathrm{o}\mathrm{m}\mathrm{e}}{\mathrm{A}\mathrm{v}\mathrm{e}\mathrm{r}\mathrm{a}\mathrm{g}\mathrm{e}\mathrm{i}\mathrm{n}\mathrm{t}\mathrm{e}\mathrm{r}\mathrm{e}\mathrm{s}\mathrm{t}\mathrm{\_}\mathrm{e}\mathrm{a}\mathrm{r}\mathrm{n}\mathrm{i}\mathrm{n}\mathrm{g}\mathrm{a}\mathrm{s}\mathrm{s}\mathrm{e}\mathrm{t}}$	CB
ROA	Return on total assets	$\mathrm{R}\mathrm{O}\mathrm{A}=\frac{\mathrm{P}\mathrm{r}\mathrm{o}\mathrm{f}\mathrm{i}\mathrm{t}\mathrm{a}\mathrm{f}\mathrm{t}\mathrm{e}\mathrm{r}\mathrm{t}\mathrm{a}\mathrm{x}}{\mathrm{A}\mathrm{v}\mathrm{e}\mathrm{r}\mathrm{a}\mathrm{g}\mathrm{e}\mathrm{t}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}\mathrm{a}\mathrm{s}\mathrm{s}\mathrm{e}\mathrm{t}\mathrm{s}}$	CB
ROE	Return on equity	$\mathrm{R}\mathrm{O}\mathrm{E}=\frac{\mathrm{P}\mathrm{r}\mathrm{o}\mathrm{f}\mathrm{i}\mathrm{t}\mathrm{a}\mathrm{f}\mathrm{t}\mathrm{e}\mathrm{r}\mathrm{t}\mathrm{a}\mathrm{x}}{\mathrm{A}\mathrm{v}\mathrm{e}\mathrm{r}\mathrm{a}\mathrm{g}\mathrm{e}\mathrm{e}\mathrm{q}\mathrm{u}\mathrm{i}\mathrm{t}\mathrm{y}}$	CB
Independent variables
CSRD	The total CSRD index	$\mathrm{C}\mathrm{S}\mathrm{R}\mathrm{D}=\frac{{\sum }_{\mathrm{i}=1}^3\mathrm{T}\mathrm{h}\mathrm{e}\mathrm{c}\mathrm{o}\mathrm{m}\mathrm{p}\mathrm{o}\mathrm{n}\mathrm{e}\mathrm{n}\mathrm{t}\mathrm{C}\mathrm{S}\mathrm{R}\mathrm{i}\mathrm{n}\mathrm{d}\mathrm{e}{\mathrm{x}}_{\mathrm{i}\mathrm{j}}}{3}$	Authors
ENVD	The environmental responsibility index	$\mathrm{E}\mathrm{N}\mathrm{V}\mathrm{D}=\frac{{\sum }_{\mathrm{i}=1}^{10}\mathrm{E}\mathrm{n}{\mathrm{v}}_{\mathrm{i}\mathrm{j}}}{10}$	Authors
EMPD	The employee responsibility index	$\mathrm{E}\mathrm{M}\mathrm{P}\mathrm{D}=\frac{{\sum }_{i=1}^{14}Em{p}_{ij}}{14}$	Authors
COMD	The community responsibility index	$\mathrm{C}\mathrm{O}\mathrm{M}\mathrm{D}=\frac{{\sum }_{i=1}^{8}Co{m}_{ij}}{8}$	Authors
CSRE	The total CSR expenditure	Total CSR expenditure = The amount of corporate income tax paid + Spending on employees + Spending on the community CSRE = Logarithm (Total CSR expenditure)	CB
TAX	The amount of corporate income tax paid in the year	TAX = Logarithm (The amount of corporate income tax paid)	CB
SALARY	Amount spent on employees	SALARY = Logarithm (Amount spent on employees)	CB
CHARITY	Amount spent on the community	CHARITY = Logarithm (Amount spent on the community)	CB
Control Variables
SIZE	The size of bank	$\mathrm{S}\mathrm{I}\mathrm{Z}\mathrm{E}$ = Logarithm (Total assets)	CB
CAP	The equity-to-asset ratio	$\mathrm{C}\mathrm{A}\mathrm{P}=\frac{\mathrm{E}\mathrm{q}\mathrm{u}\mathrm{i}\mathrm{t}\mathrm{y}}{\mathrm{T}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}\mathrm{a}\mathrm{s}\mathrm{s}\mathrm{e}\mathrm{t}\mathrm{s}}$	CB
LDR	The loan-to-deposit ratio	$\mathrm{L}\mathrm{D}\mathrm{R}=\frac{\mathrm{T}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}\mathrm{o}\mathrm{u}\mathrm{t}\mathrm{s}\mathrm{t}\mathrm{a}\mathrm{n}\mathrm{d}\mathrm{i}\mathrm{n}\mathrm{g}\mathrm{l}\mathrm{o}\mathrm{a}\mathrm{n}}{\mathrm{T}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}\mathrm{d}\mathrm{e}\mathrm{p}\mathrm{o}\mathrm{s}\mathrm{i}\mathrm{t}}$	CB
CIR	Management quality	$\mathrm{C}\mathrm{I}\mathrm{R}=\frac{\mathrm{O}\mathrm{p}\mathrm{e}\mathrm{r}\mathrm{a}\mathrm{t}\mathrm{i}\mathrm{n}\mathrm{g}\mathrm{e}\mathrm{x}\mathrm{p}\mathrm{e}\mathrm{n}\mathrm{s}\mathrm{e}\mathrm{s}}{\mathrm{T}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}\mathrm{o}\mathrm{p}\mathrm{e}\mathrm{r}\mathrm{a}\mathrm{t}\mathrm{i}\mathrm{n}\mathrm{g}\mathrm{i}\mathrm{n}\mathrm{c}\mathrm{o}\mathrm{m}\mathrm{e}}$	CB
AQ	Asset quality	$\mathrm{A}\mathrm{Q}=\frac{\mathrm{C}\mathrm{o}\mathrm{s}\mathrm{t}\mathrm{o}\mathrm{f}\mathrm{t}\mathrm{h}\mathrm{e}\mathrm{c}\mathrm{r}\mathrm{e}\mathrm{d}\mathrm{i}\mathrm{t}\mathrm{r}\mathrm{i}\mathrm{s}\mathrm{k}\mathrm{p}\mathrm{r}\mathrm{o}\mathrm{v}\mathrm{i}\mathrm{s}\mathrm{i}\mathrm{o}\mathrm{n}}{\mathrm{T}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}\mathrm{o}\mathrm{u}\mathrm{t}\mathrm{s}\mathrm{t}\mathrm{a}\mathrm{n}\mathrm{d}\mathrm{i}\mathrm{n}\mathrm{g}\mathrm{l}\mathrm{o}\mathrm{a}\mathrm{n}}$	CB
HHI	Herfindahl-Hirschman Index of the banking industry	$\mathrm{H}\mathrm{H}\mathrm{I}=\sum _{\mathrm{i}=1}^{\mathrm{n}}({\mathrm{M}\mathrm{S}}_{\mathrm{i}\mathrm{t}}^{\mathrm{A}\mathrm{s}\mathrm{s}\mathrm{e}\mathrm{t}}{)}^2$${\mathrm{M}\mathrm{S}}_{\mathrm{i}\mathrm{t}}^{\mathrm{A}\mathrm{s}\mathrm{s}\mathrm{e}\mathrm{t}}=\frac{\mathrm{T}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}\mathrm{a}\mathrm{s}\mathrm{s}\mathrm{e}\mathrm{t}\mathrm{s}\mathrm{o}\mathrm{f}\mathrm{e}\mathrm{a}\mathrm{c}\mathrm{h}\mathrm{b}\mathrm{a}\mathrm{n}\mathrm{k}}{\mathrm{T}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}\mathrm{a}\mathrm{s}\mathrm{s}\mathrm{e}\mathrm{t}\mathrm{s}\mathrm{o}\mathrm{f}\mathrm{t}\mathrm{h}\mathrm{e}\mathrm{b}\mathrm{a}\mathrm{n}\mathrm{k}\mathrm{i}\mathrm{n}\mathrm{g}\mathrm{s}\mathrm{e}\mathrm{c}\mathrm{t}\mathrm{o}\mathrm{r}}$	CB, SBV
GDP	Vietnam’s GDP growth rate		SBV
INF	Vietnam’s inflation rate		SBV
i: Bank; t: Time; $\alpha :$ Constant; $\beta ,\delta ,\gamma ,\theta :\mathrm{T}\mathrm{h}\mathrm{e}\mathrm{c}\mathrm{o}\mathrm{e}\mathrm{f}\mathrm{f}\mathrm{i}\mathrm{c}\mathrm{i}\mathrm{e}\mathrm{n}\mathrm{t}\mathrm{s}$; $\epsilon :\mathrm{T}\mathrm{h}\mathrm{e}\mathrm{e}\mathrm{r}\mathrm{r}\mathrm{o}\mathrm{r}\mathrm{t}\mathrm{e}\mathrm{r}\mathrm{m}$; CB: Commercial Bank; SBV: State Bank of Vietnam;

Source: Author’s suggestion

Table 2. Statistics of variables used in research model

Variable	Obs	Mean	Std. Dev.	Min	Max
NIM	232	0.02996	0.01284	0.00549	0.09325
ROA	232	0.00713	0.00587	0.00009	0.02902
ROE	232	0.08537	0.06899	0.00062	0.27731
CSRE	232	6.04542	0.55755	5.08658	7.21497
TAX	232	5.03332	0.94716	1.32222	6.68371
SALRY	232	5.95822	0.54554	4.96177	7.16227
CHARITY	138	4.13658	1.02131	1.14613	5.94448
CSRD	232	0.53051	0.20442	0	0.96667
ENVD	232	0.29612	0.25809	0	1
EMPD	232	0.67796	0.18704	0	1
COMD	232	0.62184	0.30154	0	1
SIZE	232	5.07789	0.50397	4.12339	6.17317
CAP	232	0.08907	0.03889	0.02931	0.23841
CIR	232	0.55579	0.12922	0.28744	0.92793
LDR	232	0.78776	0.11497	0.42695	1.12531
AQ	232	0.00979	0.00779	0.00650	0.04936
HHI	232	0.05448	0.00432	0.04821	0.05974
GDP	232	0.06328	0.00691	0.05250	0.07200
INF	232	0.03831	0.01923	0.00630	0.06810

Source: Results from Stata software

Table 3. Estimation results of the effects of the total CSR index on CFP

Variable	NIM		ROA		ROE
	Column 1	Column 2	Column 3	Column 4	Column 5	Column 6
CSRD	0.0056**		0.0027		0.0215*
	(−2.63)		(−1.52)		(−1.76)
CSRE		0.0115**		0.0010***		0.0745***
		(−2.52)		(−2.87)		(−2.90)
SIZE	−0.0062**	−0.0158***	−0.0015**	−0.0116***	−0.014	−0.0997***
	(−2.71)	(−3.27)	(−2.06)	(−2.89)	(−1.67)	(−3.18)
CAP	−0.0527**	−0.0861***	−0.0091	−0.0257***	−0.4939***	−0.5120***
	(−2.10)	(−6.04)	(−1.58)	(−3.27)	(−4.43)	(−4.19)
CIR	−0.0269***	−0.0134*	−0.0133***	−0.0190***	−0.1974***	−0.2232***
	(−3.21)	(−1.76)	(−5.59)	(−8.18)	(−5.48)	(−5.00)
LDR	0.0173**	0.0068	−0.0084**	−0.0191***	0.0346	0.0516
	(−2.48)	(−1.68)	(−2.26)	(−3.60)	(−0.74)	(−1.35)
AQ	0.2993***	0.2642***	−0.0443*	−0.1456***	−1.0451	−0.6044
	(−3.03)	(−3.17)	(−1.75)	(−3.97)	(−1.60)	(−1.68)
HHI	0.1055	−0.1079*	0.1528**	0.1379**	1.4195***	1.2352***
	(−1.39)	(−1.78)	(−2.64)	(−2.27)	(−4.00)	(−2.93)
GDP	0.0332	0.0509	0.1061**	0.0897***	0.6775**	0.7363*
	(−0.36)	(−0.65)	(−2.70)	(−3.23)	(−2.37)	(−1.86)
INF	−0.0494**	−0.0494***	0.0564***	0.0469***	0.3648***	0.3205***
	(−2.56)	(−3.44)	(−4.30)	(−3.32)	(−5.75)	(−3.41)
L.NIM	0.8496***	0.5770***
	(−17.88)	(−6.26)
L.ROA			1.0018***	0.8982***
			(−13.69)	(−15.24)
L.ROE					0.7226***	0.5870***
					(−20.61)	(−12.59)
_cons	0.0289*	0.0343***	0.0043	0.0137**	0.0857	0.1026
	(−1.91)	(−3.63)	(−0.82)	(−2.21)	(−1.18)	(−1.39)
Observations	203	203	203	203	203	203
Instruments	29	29	25	25	29	29
Banks	29	29	29	29	29	29
F test	0.000	0.000	0.000	0.000	0.000	0.000
AR (2) test	0.985	0.440	0.819	0.865	0.146	0.154
Sargan test	0.745	0.451	0.266	0.624	0.107	0.105
Hansen test	0.270	0.463	0.686	0.858	0.585	0.326

Note: The table reports the estimation results of the two-step system GMM dynamic panel models. NIM, ROA, and ROE are used as measures of the bank’s financial performance. The independent variables are CSRD and CSRE. The figures in parentheses are standard errors. The GMM diagnostic tests are reported with p-values. ***, ** and * indicate the statistical significance at 1%, 5%, and 10%, respectively.

Source: Synthesis of Authors from Stata Software

Table 4. Estimation results of the effects of the component CSR indexes on CFP

Variable	NIM		ROA		ROE
	Column 1	Column 2	Column 3	Column 4	Column 5	Column 6
ENVD	0.0059*		0.0007		0.0922***
	(1.80)		(0.32)		(4.26)
EMPD	0.0010		0.0047*		0.0020
	(0.11)		(1.94)		(0.05)
COMD	0.0038		−0.0020		−0.0580*
	(0.70)		(−1.22)		(−1.84)
TAX		−0.0097***		−0.0013		0.0018
		(−2.83)		(−1.08)		(0.10)
SALARY		0.0087		0.0064*		0.1700***
		(0.80)		(1.91)		(5.73)
CHARITY		0.0025*		−0.0003		−0.0019
		(1.82)		(−0.95)		(−0.67)
SIZE	−0.0040***	−0.0073	0.0002	−0.0041	−0.0124	−0.1961***
	(−3.08)	(−0.59)	(0.17)	(−1.42)	(−0.95)	(−7.06)
CAP	−0.0299**	−0.0043	0.0098	0.0125	−0.2865***	−0.6690***
	(−2.10)	(−0.10)	(1.15)	(0.70)	(−2.82)	(−6.57)
CIR	−0.0167***	−0.0333**	−0.0119***	−0.0166**	−0.1649***	−0.2338***
	(−2.79)	(−2.13)	(−4.05)	(−2.22)	(−5.74)	(−3.58)
LDR	−0.0229***	0.0401***	−0.0058**	−0.0095**	0.0275	−0.0725
	(−2.87)	(2.96)	(−2.57)	(−2.16)	(0.48)	(−0.99)
AQ	0.1204*	0.1956	−0.0605	−0.1080*	−0.5376**	−2.3606***
	(1.74)	(1.04)	(−1.69)	(−1.80)	(−2.49)	(−3.44)
HHI	−0.0614	−0.0132	0.0939*	0.1400*	0.4142	2.4149***
	(−0.35)	(−0.12)	(1.86)	(2.04)	(0.52)	(3.24)
GDP	0.2703**	0.0808	0.1009**	0.1022***	−0.7222	0.32508
	(2.37)	(0.76)	(2.47)	(3.83)	(−0.95)	(0.86)
INF	−0.0487	−0.0652*	0.0449***	0.0144	0.3286**	0.4344**
	(−1.12)	(−1.73)	(5.02)	(1.23)	(2.08)	(2.78)
L.NIM	1.0278***	0.8648***
	(16.52)	(7.08)
L.ROA			0.8376***	0.7967***
			(10.26)	(7.17)
L.ROE					0.7607***	0.8267***
					(6.43)	(7.21)
_cons	0.0301*		−0.0046		0.2070**
	(1.90)		(−0.75)		(2.44)
Observations	203	120	203	120	203	120
Instruments	25	23	26	26	25	26
Banks	29	27	29	27	29	27
F test	0.000	0.000	0.000	0.000	0.000	0.000
AR(2) test	0.890	0.545	0.542	0.343	0.377	0.250
Sargan test	0.985	0.242	0.218	0.278	0.452	0.162
Hansen test	0.598	0.266	0.285	0.446	0.673	0.496

Note: The table reports the estimation results of the two-step system GMM dynamic panel models. NIM, ROA, and ROE are used as measures of the bank’s financial performance. The independent variables are ENVD, EMPD, COMD, TAX, SALARY CHARITY, and CHARITY. The figures in parentheses are standard errors. The GMM diagnostic tests are reported with p-values. ***, ** and * indicate the statistical significance at 1%, 5%, and 10%, respectively.

Source: Synthesis of Authors from Stata Software