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Research On The Impact Of Bank ESG On Bank Performance

Posted on:2024-02-02Degree:MasterType:Thesis
Country:ChinaCandidate:Q L ChangFull Text:PDF
GTID:2569307073972849Subject:Financial
Abstract/Summary:PDF Full Text Request
Commercial banks are important financial institutions in China and are important hubs for achieving rational and optimal allocation of financial resources,and commercial bank performance is an important guarantee for their functions.However,with the deepening degree of competition in the financial market and the continuous impact of the emerging Internet finance on traditional banking business,the business performance of commercial banks is under serious threat.Commercial banks urgently need to find breakthroughs in financial performance growth to further enhance the safe and sound operation of commercial banks.In addition,with the growing threat of global warming to human sustainable development,international organizations and countries around the world have put forward the concept of ESG sustainable development.China is actively transforming into a low-carbon economy and promoting high-quality economic development.The financial sector,represented by banks,should actively fulfill its ESG responsibilities and play an irreplaceable key role in achieving the "double carbon" goal and high-quality economic development.How to balance the concept of sustainable development and improve bank performance has become an issue that commercial banks must face.Therefore,this paper analyzes the impact mechanism of ESG on bank performance,and helps to explore the intrinsic motivation of banks to fulfill their ESG responsibilities from the perspective of economic efficiency,so as to improve bank performance and promote sustainable development at the same time.This paper examines the impact of bank ESG on bank performance using data related to 16 listed banks from 2011 to 2020 as a sample.The sample bank performance is measured by using principal component analysis and empirical test analysis is conducted using generalized least squares method.The results of the study show that,first,bank ESG has a significant positive effect on bank performance through reputation spillover effect.The active fulfillment of ESG responsibilities by banks can alleviate the information asymmetry problem through the reputation spillover information effect,increase the risk tolerance of banks through the insurance effect,gain the trust and support of relevant interest groups through the psychological effect,and reduce the operating costs of banks through the cost effect,thus improving bank performance.Second,ESG of non-state commercial banks and small-scale banks has a significant positive effect on bank performance,and the reputation spillover effect is more obvious.The reputational spillover effect of ESG responsibility of non-state commercial banks is greater than their costs,and the reputational spillover effect of ESG responsibility of small-scale banks is greater than their green credit risks and the corporate governance structure optimization effect is more obvious,thus improving bank performance.Third,economic policy uncertainty can enhance the contribution of bank ESG to bank performance.In times of rising economic policy uncertainty,the reputational insurance effect of bank ESG increases bank risk tolerance and the psychological effect wins stakeholder groups’ trust in banks with higher ESG responsibility,thus enhancing the contribution of bank ESG to bank performance.Based on the findings of the empirical study,this paper puts forward relevant policy recommendations for commercial banks.Commercial banks should adhere to their ESG responsibilities in the long term,establish a sound ESG management system,improve the forward-looking identification of economic policy changes,and bring into play the ESG reputation spillover effect of banks to improve bank performance.The research in this paper provides some reference value for how commercial banks should improve their own financial performance levels while promoting high-quality economic development.
Keywords/Search Tags:Bank ESG, bank performance, economic policy uncertainty, generalized least squares
PDF Full Text Request
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