Legal Origins and Corporate Social Responsibility (CSR) in Banking

Mohammad Bitar (), Aristeidis Dadoukis and Amine Tarazi
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Amine Tarazi: UNILIM - Université de Limoges, LAPE - Laboratoire d'Analyse et de Prospective Economique - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges, IUF - Institut universitaire de France - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche

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Abstract: We investigate whether and how a country's legal origins influence bank engagement in CSR. Using data from 40 countries, we find that banks in civil law countries are more involved in CSR than those in common law countries. Governments in civil law countries enforce strict regulations prompting banks to adopt CSR to achieve broader societal and environmental goals than solely prioritizing the interests of shareholders. Channel analyses show that legal origins shape CSR through key mechanisms, including strong stakeholder protection, rigorous regulatory oversight, and effective bank-level compliance.

Keywords: Banking; CSR; Legal origins; Culture; Formal institutional environment (search for similar items in EconPapers)
Date: 2025-03-17
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