This paper aims to provide empirical evidence and policy implications on the link between corporate social responsibility, financial inclusion and financial performance of the banking sector in an emerging market.
This study uses data collected from the annual reports of 13 listed banks in Vietnam from 2011 to 2019. CSR is proxied by the ratio between charitable contributions and bank profits. Besides, this study uses the number of branches and the number of agents as the proxies for a level of financial inclusion. The generalized method of moments and various tests are used to ensure the robustness of the findings.
Findings in this study indicate that CSR activities do matter, and they contribute positively to financial inclusion. In addition, the bank’s size is also associated with an increased level of financial inclusion.
Findings from this study provide important implications for bank executives and policymakers in Vietnam in managing and extending CSR activities with the view of supporting and enhancing financial inclusion.
To the best of the author’s knowledge, this is the first empirical study in the context of the banking sector in Vietnam in which the impact of CSR activities and financial performance of the banking sector on financial inclusion at the bank level is examined.
