Corporate Social Responsibility and Bank Stability in Vietnam

Novel Insights from a Method of Moments Quantile Regression Approach

Abstract

This study investigates the relationship between corporate social responsibility (CSR) and bank stability in Vietnam from 2016 to 2022 using the method of moments quantile regression (MMQR). The results show a U-shaped relationship between CSR and bank stability at location-based and across quantiles; however, mixed findings are obtained for different CSR components at different quantiles. Specifically, responsibilities to customers and the environment first mitigate but later improve bank stability. However, the findings indicate an inverted U-shaped relationship between product and service responsibility and bank stability, implying that aggressive pursuits of sustainable products may increase bank instability. Our findings still hold under several robustness checks.