Corporate social responsibility and bank risk: theory and empirical evidence

Abstract

Social responsibility is an important matter that business owners should prioritize. This study analyses data from commercial banks in Vietnam between 2015 and 2024 to examine the impact of corporate social responsibility (CSR) on bank risk. The analysis employs models: The analysis employs Generalized Model of Moment (GMM) and Feasible Generalized GLeast Squares (FGLS) with an unbalanced panel dataset comprising 19 commercial banks. The findings show that CSR contributes to reducing bank risk. The study also provides the theoretical basis for CSR by identifying the influence of each CSR factor on different business risks. Furthermore, it also strengthens the relationship between risk and safe banking practices. The foundation for suggesting practical management implications for risk management in the context of sustainable development.