ESG activities and bank performance: does bank ownership matter ?

Marc Kouzez (), Ji-Yong Lee () and Jomana Leroux
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Marc Kouzez: CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine
Ji-Yong Lee: Audencia Business School
Jomana Leroux: UO - Université d'Orléans

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Abstract: In this paper, we investigate the relation between environmental, social and governance (ESG) activities and bank performance in European markets. Different from existing literature, we also explore whether ESG activities differently affect the performance of foreign-owned banks and domestic-owned banks. The results show that higher involvement in ESG activities is associated with better performance only for foreign-owned banks, and suggest that investment in ESG activities is relevant for foreign banks since it helps to obtain legitimacy in foreign markets, and enhance their reputation on international level. Our findings provide a better understanding of whether a banks ESG activities are in the interest of shareholders, and partially explain the contradictory results in previous studies.

Date: 2022-05-12
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Published in 4th Edition of Ethical Finance and Sustainability Conference, May 2022, Paris, France

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03859390

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