CEO overpower and corporate social responsibility of commercial banks: The moderating role of state ownership

Figures & data

Table 1. Descriptive statistics

	Mean	Median	95%	5%	Std. Dev.	Obs
CSR	3.1208	3.0000	4.0000	1.0000	0.8793	331
CEO_GENDER	0.8489	1.0000	1.0000	0.0000	0.3586	331
CEO_OWN	1.0545	0.0137	6.6800	0.0000	1.9572	331
CEO_TENURE	4.2145	3.0000	12.0000	1.0000	3.1955	331
STATEOWN	9.5750	0.0000	64.4600	0.0000	19.6507	331
SIZE	18.4140	18.4287	20.5575	16.6360	1.1084	331
BOARD	7.3781	7.0000	10.9500	5.0000	1.7038	331
LEV	11.4315	11.2065	19.4352	4.2740	4.2408	331

This table presents the descriptive statistics of all variables. Our report studied 37 Vietnamese commercial banks from 2010 to 2020. The sample consists of 331 bank-year observations. All variable definitions are reported in Appendix B.

Table 2. The Pearson correlation matrix

	Ceopower Stateown		Size	Board lev	Lev	VIF
CEOPOWER	1					1.051525
STATEOWN	0.103272	1				1.235122
SIZE	−0.01074	0.331306	1			2.258985
BOARD	−0.14776	0.232276	0.335448	1		1.183343
LEV	0.039068	0.057148	0.666524	0.17605	1	1.919375

Table 2 presents the Pearson correlation between independent variables. Our report studied 37 banks from 2010 to 2020. All variable definitions are reported in Appendix B.

Table 3. Regression results from dynamic system GMM estimations

Variable	Model 1	Model 2	Model 3	Model 4
CSR(−1)	0.2326*** (<0.0001)	0.3310*** (<0.0001)	0.3346*** (<0.0001)	0.3063*** (<0.0001)
CEOPOWER	−0.2693*** (<0.0001)		−0.2339*** (<0.0001)	−0.3130*** (<0.0001)
STATEOWN		0.0273*** (<0.0001)	0.0262*** (<0.0001)	0.0314*** (<0.0001)
CEOPOWER*STATEOWN				0.0076*** (<0.0001)
SIZE	0.2698*** (<0.0001)	0.1888*** (<0.0001)	0.2509*** (<0.0001)	0.3211*** (<0.0001)
BOARD	−0.0272*** (<0.0001)	−0.0242*** (<0.0001)	−0.0267*** (<0.0001)	−0.0533*** (<0.0001)
LEV	−0.0002*** (<0.0001)	−0.0001*** (<0.0001)	−0.0001*** (<0.0001)	−0.0002*** (<0.0001)
N	258	258	258	258
Instruments rank	35	35	35	35
F test	4.1381	4.1501	3.4054	2.9988
AR (1)	0.9923	0.983	0.9752	0.9956
AR (2)	0.9852	0.9662	0.9829	0.9891
Sargan/Hansen test	30.585	30.501	31.054	25.219
Prob(J-statistic)	0.4359	0.4402	0.3628	0.6158

Table 3 reports the results of dynamic system GMM estimation. Our study examines 37 commercial banks from 2005 to 2020. All variable definitions are reported in Appendix B. The symbol ***, **, and * represents the significant level at 1%, 5%, and 10%, respectively.

Table 4. CSR of the commercial banks in different CEOs’ age

Variable	CEO over 30	CEO over 40	CEO over 50	CEO over 60
CSR (−1)	0.2903** (0.0355)	0.3286*** (<0.0001)	0.2692*** (<0.0001)	0.2673*** (<0.0001)
CEOPOWER	−0.1832*** (<0.0001)	−0.2185*** (0.0004)	−0.4261*** (<0.0001)	−0.3037*** (<0.0001)
STATEOWN	0.0289*** (<0.0001)	0.0309*** (<0.0001)	0.0327*** (<0.0001)	0.0304*** (<0.0001)
CEOPOWER*STATEOWN	0.0056** (0.0133)	0.0054*** (0.0003)	0.0095*** (0.0001)	0.0088*** (0.0011)
SIZE	0.2501*** (0.0082)	0.1932*** (<0.0001)	0.3759*** (<0.0001)	0.3240*** (<0.0001)
BOARD	−0.0329 (0.2994)	−0.0418*** (0.0022)	−0.0364** (0.0385)	−0.0607*** (<0.0001)
LEV	−0.0002*** (0.0015)	−0.0001*** (0.0002)	−0.0002*** (<0.0001)	−0.0002*** (<0.0001)
N	258	258	258	258
Instruments rank	35	35	35	35
F test	2.5627	3.0715	2.5820	2.9821
AR (1)	0.9994	0.9995	0.9978	0.9997
AR (2) test	0.9999	0.9999	0.9967	0.9999
Sargan/Hansen test	25.76495	22.62097	23.06701	24.3796
Prob(J-statistic)	0.5317	0.7052	0.6814	0.6091

Table 4 reports the CSR of commercial banks with a CEO over 30–60 years old using the system GMM method. All variable definitions are reported in Appendix B. The symbol ***, **, and * represents the significant level at 1%, 5%, and 10%, respectively.

Table

Eigenvalues of matrix
(a) Eigenvalues
Number	Eigenvalue	Difference	Proportion	Cumulative
1	1.0497	0.0448	0.3499	0.3499
2	1.0049	0.0595	0.3350	0.6849
3	0.9453	—	0.3151	1.0000
(b) Eigenvectors (loadings)
Variable	PC 1	PC 2	PC 3
CEO_GENDER	−0.7189	−0.1077	0.6866
CEO_OWN	0.1682	0.9315	0.3223
CEO_TENURE	0.6744	−0.3472	0.6517

Table

Variables	Notation	Variable descriptions	Reference
Dependent Variables
Corporate Social Responsibility	CSR	CSR disclosure index is constructed from four aspects: Environment, community, employees, products, customers, and supplier practices	Aggarwal and Singh (2018)
Independence variables
CEO gender CEO	CEO_GENDER	If CEO male = 1, otherwise 0	Haider and Fang (2018)
ownership	CEO_OWN	The proportion of shares the CEO’s ownership	Muttakin et al. (2018); Sheikh (2019)
CEO tenure	CEO_TENURE	Number of years the CEO of the bank has served as CEO	Sheikh (2019)
State ownership	STATEOWN	The proportion of government holdings of the firm at the end of year t	Boubakri et al. (2013)
CEOPOWER*STATEOWN	CEOPOWER*STATEOWN	The interaction term between CEO power and State ownership. This interaction term is employed to examine the moderating role of state ownership on the impacts of powerful CEOs on CSR.
Control variables
Bank size	SIZE	The natural logarithm of total assets affects the size	Ullah et al. (2019)
Board size	BOARD	The total number of bank directors at the end of each fiscal year	Lau et al. (2016)
Leverage	LEV	The ratio of total liabilities over total assets	Boubakri et al. (2016)

Haider, J., & Fang, H. X. (2018). CEO power, corporate risk taking and role of large shareholders. Journal of Financial Economic Policy, 10(1), 55–72. https://doi.org/10.1108/JFEP-04-2017-0033

 Web of Science ®Google Scholar

Muttakin, M. B., Khan, A., & Mihret, D. G. (2018). The effect of board capital and CEO power on corporate social responsibility disclosures. Journal of Business Ethics, 150, 41–56. https://doi.org/10.1007/s10551-016-3105-y

 Web of Science ®Google Scholar

Sheikh, S. (2019). An examination of the dimensions of CEO power and corporate social responsibility. Review of Accounting and Finance, 18(2), 221–244. https://doi.org/10.1108/RAF-01-2018-0034

 Web of Science ®Google Scholar

Boubakri, N., Cosset, J. C., & Saffar, W. (2013). The role of state and foreign owners in corporate risk-taking: Evidence from privatization. Journal of Financial Economics, 108(3), 641–658. https://doi.org/10.1016/j.jfineco.2012.12.007

 Web of Science ®Google Scholar

Ullah, M. S., Muttakin, M. B., & Khan, A. (2019). Corporate governance and corporate social responsibility disclosures in insurance companies. International Journal of Accounting & Information Management, 27(2), 284–300. https://doi.org/10.1108/IJAIM-10-2017-0120

 Web of Science ®Google Scholar

Lau, C., Lu, Y., & Liang, Q. (2016). Corporate social responsibility in China: A corporate governance approach. Journal of Business Ethics, 136, 73–87. https://doi.org/10.1007/s10551-014-2513-0

 Web of Science ®Google Scholar

Boubakri, N., El Ghoul, S., Wang, H., Guedhami, O., & Kwok, C. C. (2016). Crosslisting and corporate social responsibility. Journal of Corporate Finance, 41, 123138. https://doi.org/10.1016/j.jcorpfin.2016.08.008

 Web of Science ®Google Scholar

Data availability statement

The data used to support the findings of this study are available from the corresponding author upon request.