Table 7

Moderation of ESG by bank funding structure (BFS) on bank risk-taking (BRT)

VariablesFERESys-GMM
BRT it-1 (lagged only for GMM)0.501*** (0.006)
ESG it-1 (lagged only for GMM)−0.007** (0.028)−0.007** (0.035)−0.008** (0.030)
LC it-1 (lagged only for GMM)−0.004** (0.033)−0.004** (0.027)−0.005** (0.021)
BFS−0.003* (0.089)−0.003** (0.046)−0.003** (0.040)
ESG × BFS−0.000** (0.029)−0.000** (0.042)−0.000** (0.032)
SIZE0.681*** (0.005)0.731*** (0.002)0.700*** (0.004)
CAP−0.043* (0.079)−0.047** (0.026)−0.051** (0.018)
GDP−0.017 (0.339)−0.018 (0.311)−0.019 (0.293)
INF0.035*** (0.010)0.036*** (0.007)0.037*** (0.006)
BC−0.002 (0.730)−0.001 (0.944)−0.001 (0.885)
BNK−0.012 (0.354)−0.010 (0.443)−0.012 (0.321)
DCOVID−0.298* (0.093)−0.317* (0.076)−0.499** (0.038)
AR(1) p-value0.015
AR(2) p-value0.521
Hansen J (p-value)0.611

Note(s): Dependent variable is BRT. FE and RE estimations include ESG, LC, BFS, and controls. Sys-GMM treats ESG, LC, BFS, and the interaction ESG × BFS as endogenous, with lagged instruments collapsed and limited. Standard errors are robust; p-values in parentheses. *, **, *** denote significance at 10%, 5%, and 1% levels

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