Bank lending cyclicality and ESG activities: Global evidence

Omneya Abdelsalam, Wajahat Azmi, Mustafa Disli and V. Kowsalya

Finance Research Letters, 2023, vol. 58, issue PD

Abstract: This paper examines how banks' lending behavior is influenced by their ESG activities. To achieve this objective, we use a global sample of 277 banks for the period 2012–2019. We find that banks that engage in ESGs are less prone to procyclical lending than those that do not. In the case of environmental activities, the results are more pronounced. In essence, we demonstrate that ESG activities, and in particular environmental activities, can serve as indicators to identify banks that stabilize credit during difficult times. This study has implications for policymakers as well as other stakeholders.

Keywords: ESG activities; Lending behavior (search for similar items in EconPapers)
JEL-codes: C23 D81 E50 G21 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pd:s1544612323009133

DOI: 10.1016/j.frl.2023.104541

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