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| Author: | Callado-Munoz, F.J. Utrero-Gonzalez, N. |
| Title: | Does it pay to be socially responsible? Evidence from Spain's retail banking sector |
| Journal: | European Financial Management
2011 : SEP, VOL. 17:4, p. 755-787 |
| Index terms: | financial performance banking competition corporate responsibility social responsibility consumer behaviour models Spain |
| Freeterms: | CSR |
| Language: | eng |
| Abstract: | In this paper, the research on the relation btw. financial performance and corporate social responsibility (CSR) is extended in two respects: 1. developed is a model of strategic competition including consumer perceptions as for firm social performance. It is shown that in the presence of a positive valuation of SR practices by consumers, a firm supporting the responsible behaviour may get a better strategic position in the market, along with higher margin, demand, and profit. 2. the model's predictions are tested using a sample of Spanish banking firms. The empirical analysis confirms that consumers markedly value other features apart from price in making deposit and mortgage decisions, especially a financial institution's SR. A further analysis shows that 1. not every CSR dimension has relevance for consumers, and 2. customers equally value activities with a possible direct impact on their well-being, for example culture and leisure, as well as other activities that can be seen more generally as public goods, e.g. environment. It is also shown that firms can improve their competitive position in the market and their profits by behaving in a SR manner, provided that consumers value CSR activities. |
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