Corporate social responsibility expenditure and financial performance: A comparison of Vietnamese listed and unlisted banks

Figures & data

Table 1. Description of variables and symbols in research model

Symbol	Describe	Determination formula		Rechearches
Dependent variable
ROA	Return On Asset	$\mathrm{R}\mathrm{O}\mathrm{A}=\hspace{0.17em}\frac{\mathrm{P}\mathrm{r}\mathrm{o}\mathrm{f}\mathrm{i}\mathrm{t}\mathrm{a}\mathrm{f}\mathrm{t}\mathrm{e}\mathrm{r}\mathrm{t}\mathrm{a}\mathrm{x}}{\mathrm{A}\mathrm{v}\mathrm{e}\mathrm{r}\mathrm{a}\mathrm{g}\mathrm{e}\mathrm{t}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}\mathrm{a}\mathrm{s}\mathrm{s}\mathrm{e}\mathrm{t}\mathrm{s}}$		Esteban-Sanchez et al. (2017); Wu et al. (2017); Buallay (2019);
Main independent variables
COM	Community Responsibility	Public Welfare Undertaking, philanthropic giving, Community Involvement, etc.		Iqbal et al. (2014); Madugba and Okafor (2016);
GOV	Government Responsibility	Tax, government fees and charges, etc.		Khurshid et al. (2016); Zhou et al. (2021);
EMP	Employee Responsibility	Fair Employment, Health & Safety, Training and Education, Professional Development, etc.		Raihan et al. (2015); Esteban-Sanchez et al. (2017);
CSRE	Total corporate social responsibility expenditure	$\mathrm{C}\mathrm{S}\mathrm{R}\mathrm{E}=\hspace{0.17em}\frac{TotalCSRE}{\mathrm{T}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}\mathrm{o}\mathrm{p}\mathrm{e}\mathrm{r}\mathrm{a}\mathrm{t}\mathrm{i}\mathrm{n}\mathrm{g}\mathrm{i}\mathrm{n}\mathrm{c}\mathrm{o}\mathrm{m}\mathrm{e}}$ Total CSRE = COM + GOV + EMP		Adewale and Rahmon (2014); Madugba and Okafor (2016)
Control variables
SIZE	Scale of bank	$\mathrm{S}\mathrm{I}\mathrm{Z}\mathrm{E}$ = Logarit (Total assets)		Gonenc and Scholtens (2019); Hafez (2015); Matuszaka and Różańskaa (2019);
TIA	Investment in fixed assets	$\mathrm{T}\mathrm{I}\mathrm{A}=\hspace{0.17em}\frac{\mathrm{F}\mathrm{i}\mathrm{x}\mathrm{a}\mathrm{s}\mathrm{s}\mathrm{e}{\mathrm{t}}_t-Fixasse{t}_{t-1}}{\mathrm{T}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}\mathrm{a}\mathrm{s}\mathrm{s}\mathrm{e}\mathrm{t}\mathrm{s}}\hspace{0.17em}$		Almazari (2014);
$\mathrm{C}\mathrm{I}\mathrm{R}$	Management efficiency	$\mathrm{C}\mathrm{I}\mathrm{R}=\hspace{0.17em}\frac{\mathrm{O}\mathrm{p}\mathrm{e}\mathrm{r}\mathrm{a}\mathrm{t}\mathrm{i}\mathrm{n}\mathrm{g}\mathrm{e}\mathrm{x}\mathrm{p}\mathrm{e}\mathrm{n}\mathrm{s}\mathrm{e}\mathrm{s}}{\mathrm{T}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}\mathrm{o}\mathrm{p}\mathrm{e}\mathrm{r}\mathrm{a}\mathrm{t}\mathrm{i}\mathrm{n}\mathrm{g}\mathrm{i}\mathrm{n}\mathrm{c}\mathrm{o}\mathrm{m}\mathrm{e}}$		Wu and Shen (2013); Wu et al. (2017);
LQR	Liquidity	$\mathrm{L}\mathrm{Q}\mathrm{R}=\hspace{0.17em}\frac{\mathrm{L}\mathrm{i}\mathrm{q}\mathrm{u}\mathrm{i}\mathrm{d}\mathrm{i}\mathrm{t}\mathrm{y}\mathrm{a}\mathrm{s}\mathrm{s}\mathrm{e}\mathrm{t}\mathrm{s}}{\mathrm{T}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}\mathrm{a}\mathrm{s}\mathrm{s}\mathrm{e}\mathrm{t}\mathrm{s}}$		; Almazari (2014);
$\mathrm{N}\mathrm{P}\mathrm{L}$	Non-performing loan	$\mathrm{N}\mathrm{P}\mathrm{L}=\hspace{0.17em}\frac{\mathrm{T}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}\mathrm{N}\mathrm{o}\mathrm{n}-\mathrm{p}\mathrm{e}\mathrm{r}\mathrm{f}\mathrm{o}\mathrm{r}\mathrm{m}\mathrm{i}\mathrm{n}\mathrm{g}\mathrm{l}\mathrm{o}\mathrm{a}\mathrm{n}}{\mathrm{T}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}\mathrm{o}\mathrm{u}\mathrm{t}\mathrm{s}\mathrm{t}\mathrm{a}\mathrm{n}\mathrm{d}\mathrm{i}\mathrm{n}\mathrm{g}\mathrm{l}\mathrm{o}\mathrm{a}\mathrm{n}}$		Hafez (2015);
GDP	Vietnam’s GDP growth rate			Belasri et al. (2020) Wu and Shen (2013); Wu et al. (2017);
INF	Vietnam’s inflation rate			Belasri et al. (2020);
i: Bank; t: Time; $\alpha :\hspace{0.17em}$Constant; $\beta ,\delta :\mathrm{T}\mathrm{h}\mathrm{e}\mathrm{c}\mathrm{o}\mathrm{e}\mathrm{f}\mathrm{f}\mathrm{i}\mathrm{c}\mathrm{i}\mathrm{e}\mathrm{n}\mathrm{t}\mathrm{s}$; $\epsilon :\mathrm{T}\mathrm{h}\mathrm{e}\mathrm{e}\mathrm{r}\mathrm{r}\mathrm{o}\mathrm{r}\mathrm{t}\mathrm{e}\mathrm{r}\mathrm{m}$

Table 2. Statistics of variables used in research model

Variable	Obs	Mean	Std. Dev.	Min	Max
ROA	248	0.0078	0.0060	0.0000	0.0290
CSRE	248	0.1469	0.1113	0.0219	1.1847
COM	248	0.0038	0.0083	0.0000	0.0493
GOV	248	0.0711	0.0519	0.0000	0.3566
EMP	248	0.2658	0.3256	0.0449	0.4974
NPL	248	0.0222	0.0128	0.0034	0.0883
LQR	248	0.1517	0.0841	0.0152	0.6070
TIA	248	0.1852	0.0739	0.0165	0.4689
CIR	248	0.5303	0.2817	−0.6554	2.7922
SIZE	248	8.0233	0.4882	7.1214	9.1732
GDP	248	0.0630	0.0063	0.0525	0.0708
INF	248	0.0564	0.0502	0.0063	0.1868

Table 3. Panel unit root test result

Ho: All panels contain unit roots Ha: At least one panel is stationary
		ADF regressions: 0 lags
		ROA	CSRE	EMP	COM	GOV	NPL	LQR	TIA	CIR	SIZE
Inverse chi-squared(56)	P	131.5422***	205.9533***	208.9603***	179.6539***	187.7107***	241.6991***	199.2375***	186.5223**	195.5915***	227.6882***
Inverse normal	Z	−5.5881***	−9.8976***	−9.9632***	−8.9741***	−9.2396***	−11.0273***	−9.5473***	−9.155***	−9.5535***	−9.6184***
Inverse logit t(144)	L*	−5.8209***	−10.5673***	−10.6981***	−9.1817***	−9.6084***	−12.4844***	−10.2218***	−9.5327***	−10.0429***	−11.4382***
Modified inv. chi-squared	Pm	7.1381***	14.1693***	14.4534***	11.6842***	12.4455***	17.5469***	13.5347***	12.3332***	13.1902***	16.223***
		ADF regressions: 1 lags
		ROA	CSRE	EMP	COM	GOV	NPL	LQR	TIA	CIR	SIZE
Inverse chi-squared(56)	P	118.2314***	–	–	–	–	–	–	–	–	–
Inverse normal	Z	−5.3483***	–	–	–	–	–	–	–	–	–
Inverse logit t(144)	L*	−5.3441***	–	–	–	–	–	–	–	–	–
Modified inv. chi-squared	Pm	5.8803***	–	–	–	–	–	–	–	–	–

*** represents 1% significance level.

Table 4. Variable correlation matrix and results of multi-collinearity test using VIF

	ROA	CSRE	CHA	TAX	EMP	NPL	LQR	TIA	CIR	SIZE	GDP	INF	VIF
ROA	1												–
CSRE	−0.1088**	1											0.00
COM	0.0384	−0.0219	1										0.00
GOV	0.5216**	0.2430**	0.0803	1									0.00
EMP	−0.1958***	0.6873**	−0.0608	0.0877	1								0.00
NPL	−0.072	0.052	−0.1298*	−0.0335	0.062	1							1.26
LQR	0.0667	0.0635	−0.0026	0.3254***	0.0133	−0.0167	1						1.41
TIA	−0.0346	−0.0658	−0.0987	−0.1188*	−0.046	0.0092	−0.1238**	1					1.08
CIR	−0.3530**	0.5463**	−0.1762**	−0.1200**	0.5839***	0.1079**	0.0692	0.102	1				1.84
SIZE	0.1512***	−0.0899	0.2974**	0.0716	−0.1112**	−0.2710***	−0.2030***	−0.0917	−0.3056***	1			1.45
GDP	0.0548	−0.0698	−0.0976	−0.1891**	−0.0389	−0.3687***	−0.0902	−0.0994	−0.0829	0.2721***	1		1.48
INF	0.2662***	−0.0065	0.0269	0.4259*	−0.0753	0.2033**	0.4523**	−0.0747	−0.069	−0.2255**	−0.3921***	1	1.74
												Mean VIF	1.00

*, **, *** represents 10%, 5%, and 1% significance level.

Table 5. Estimation results of the impacts of CSR expenditure on FP

Dependent Var: ROA	Model 1		Model 2
	Coef.	P.value	Coef.	P.value
L1.ROA	0.4642***	0.000	0.4839***	0.000
CSRE	−0.0176***	0.000
COM			0.1914*	0.057
GOV			0.0107	0.268
EMP			−0.0080***	0.000
NPL	−0.0941***	0.008	−0.0860	0.147
LQR	−0.0097***	0.001	−0.0082*	0.058
TIA	−0.0230***	0.000	−0.0109*	0.090
CIR	0.0043***	0.026	0.0042**	0.042
SIZE	0.0064***	0.008	0.0075***	0.004
GDP	0.0602	0.117	0.1357**	0.012
INF	0.0502***	0.000	0.0558***	0.001
_cons	−0.0458**	0.013	−0.0630***	0.002
Number of obs	218		218
Instruments	27		27
Groups	28		28
F test	0.0000		0.0000
AR(2) test	0.420		0.975
Sargan test	0.925		0.887
Hansen test	0.679		0.785

ROA= Return On Asset, COM = Community Responsibility, GOV = Government Responsibility, EMP = Employee Responsibility, CSRE = Total corporate social responsibility expenditure, SIZE = Scale of bank, TIA = Investment in fixed assets, CIR = Management efficiency, LQR = Liquidity, NPL = Non-performing loan, GDP= GDP growth rate, INF = Inflation rate.

*, **, *** represents 10%, 5%, and 1% significance level.

Table 6. ROA and CSR expenditures between listed banks and unlisted banks

	2017		2018		2019
	Listed Bank	Unlisted Bank	Listed Bank	Unlisted Bank	Listed Bank	Unlisted Bank
ROA	0.81%	0.75%	1.11%	0.79%	1.17%	0.92%
CSRE	14.08%	13.74%	14.49%	14.34%	14.91%	14.18%
COM	0.27%	0.24%	0.41%	0.31%	0.23%	0.17%
GOV	5.69%	5.11%	7.78%	5.73%	9.65%	6.45%
EMP	37.29%	35.88%	35.47%	36%	34.86%	35.92%

Table 7. Estimating the impact of CSR expenditures on FP: listed banks and unlisted banks

Dependent Variable: ROA	Model 3		Model 4		Model 5		Model 6
	Coef.	P.value	Coef.	P.value	Coef.	P.value	Coef.	P.value
L1.ROA	0.2876***	0.003	0.0308	0.911	0.3988	0.195	0.3462***	0.010
CSRE	−0.0221***	0.005
CSRE.LB	0.0166***	0.003
COM			−0.1419	0.190	0.1784*	0.095	0.0723	0.467
COM.LB			0.6761*	0.058
GOV			0.1001***	0.003	0.0173	0.490	0.0536***	0.000
GOV.LB					0.0471***	0.002
EMP			−0.0200***	0.001	−0.0156**	0.016	−0.0054**	0.026
EMP.LB							0.0105***	0.001
NPL	−0.1544**	0.021	−0.1774***	0.004	−0.0208	0.773	−0.2135***	0.009
LQD	−0.0096*	0.066	0.0018	0.766	−0.0077	0.306	−0.0140**	0.023
TIA	−0.0220**	0.015	0.0072	0.226	0.0118	0.136	0.0019	0.825
CIR	0.0013	0.543	0.0186***	0.000	0.0177***	0.000	0.0031	0.328
SIZE	0.0073*	0.051	0.0076***	0.000	0.0076***	0.000	0.0073***	0.008
GDP	0.0109	0.841	0.2007**	0.048	0.3273***	0.001	0.0463	0.476
INF	0.0650***	0.000	0.0680***	0.005	0.0882***	0.001	0.0601***	0.000
_cons	−0.0459	0.118	−0.0767***	0.000	−0.0890***	0.000	−0.0572***	0.009
Number of obs	218		218		218		218
Group	28		28		28		28
Instruments	23		24		23		23
F test	0.000		0.000		0.000		0.000
AR(2) test	0.299		0.471		0.472		0.426
Sargan test	0.860		0.998		0.929		0.753
Hansen test	0.445		0.678		0.759		0.615

ROA= Return On Asset, COM = Community Responsibility, GOV = Government Responsibility, EMP = Employee Responsibility, CSRE = Total corporate social responsibility expenditure, SIZE = Scale of bank, TIA = Investment in fixed assets, CIR = Management efficiency, LQR = Liquidity, NPL = Non-performing loan, GDP= GDP growth rate, INF = Inflation rate.

LB= listed status of bank, take 1 if listed bank, 0 for otherwise.

*, **, *** represents 10%, 5%, and 1% significance level.

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