The result with the interaction terms
| Profitt | ROA | ROA | ROE | ROE |
|---|---|---|---|---|
| Profitt−1 | 0.468*** (0.123) | 0.554*** (0.163) | 0.539*** (0.082) | 0.51*** (0.084) |
| ESG | −0.021 (0.015) | −0.015 (0.016) | −0.193 (0.211) | 0.107 (0.269) |
| SQESG | 0.0001 (0.0001) | −0.00003 (0.0001) | 0.0004 (0.002) | −0.003 (0.003) |
| LA | −0.009 (0.013) | −0.012 (0.014) | −0.166 (0.153) | −0.254 (0.147) |
| DEPO | −0.006 (0.006) | −0.004 (0.006) | 0.004 (0.053) | 0.011 (0.061) |
| NPL | 0.016 (0.019) | 0.028 (0.022) | 0.026 (0.178) | 0.171 (0.228) |
| CAP | 0.032 (0.044) | 0.071 (0.045) | 0.635 (0.446) | 0.908* (0.521) |
| LNTA | 0.133** (0.057) | 0.14** (0.059) | 1.446*** (0.484) | 1.142** (0.496) |
| OPEN | 0.014** (0.006) | 0.029*** (0.011) | 0.175*** (0.055) | 0.177*** (0.057) |
| COV | −0.377** (0.174) | −0.525*** (0.186) | −5.813*** (1.724) | −8.379*** (2.133) |
| GFC | 17.431 (11.66) | −0.689 (9.742) | ||
| ESG*COV | 0.009** (0.004) | 0.01*** (0.004) | 0.119*** (0.037) | 0.162*** (0.046) |
| ESG*GFC | −0.369 (0.238) | −0.086 (0.177) | ||
| CONST | −1.994 (2.327) | −3.972 (2.85) | −31.606 (19.656) | −26.99 (22.784) |
| Observations | 3,376 | 3,376 | 3,376 | 3,376 |
| AR1 (p-value) | 0.000 | 0.014 | 0.000 | 0.000 |
| AR2 (p-value) | 0.103 | 0.296 | 0.167 | 0.278 |
| Hansen test (p-value) | 0.343 | 0.367 | 0.389 | 0.458 |
| Profit | ROA | ROA | ROE | ROE |
|---|---|---|---|---|
| 0.468*** (0.123) | 0.554*** (0.163) | 0.539*** (0.082) | 0.51*** (0.084) | |
| −0.021 (0.015) | −0.015 (0.016) | −0.193 (0.211) | 0.107 (0.269) | |
| 0.0001 (0.0001) | −0.00003 (0.0001) | 0.0004 (0.002) | −0.003 (0.003) | |
| −0.009 (0.013) | −0.012 (0.014) | −0.166 (0.153) | −0.254 (0.147) | |
| −0.006 (0.006) | −0.004 (0.006) | 0.004 (0.053) | 0.011 (0.061) | |
| 0.016 (0.019) | 0.028 (0.022) | 0.026 (0.178) | 0.171 (0.228) | |
| 0.032 (0.044) | 0.071 (0.045) | 0.635 (0.446) | 0.908* (0.521) | |
| 0.133** (0.057) | 0.14** (0.059) | 1.446*** (0.484) | 1.142** (0.496) | |
| OPEN | 0.014** (0.006) | 0.029*** (0.011) | 0.175*** (0.055) | 0.177*** (0.057) |
| COV | −0.377** (0.174) | −0.525*** (0.186) | −5.813*** (1.724) | −8.379*** (2.133) |
| GFC | 17.431 (11.66) | −0.689 (9.742) | ||
| ESG*COV | 0.009** (0.004) | 0.01*** (0.004) | 0.119*** (0.037) | 0.162*** (0.046) |
| ESG*GFC | −0.369 (0.238) | −0.086 (0.177) | ||
| CONST | −1.994 (2.327) | −3.972 (2.85) | −31.606 (19.656) | −26.99 (22.784) |
| Observations | 3,376 | 3,376 | 3,376 | 3,376 |
| AR1 ( | 0.000 | 0.014 | 0.000 | 0.000 |
| AR2 ( | 0.103 | 0.296 | 0.167 | 0.278 |
| Hansen test ( | 0.343 | 0.367 | 0.389 | 0.458 |
Note(s): ROA, pre-tax return on assets; ROE, pre-tax return on assets; ROE, pre-tax return on equity; ESG, the ESG combined score; SQESG, the squared value of ESG; LA, the ratio of total loans to total assets; DEPO, the ratio of total deposits to total loans; NPL, the ratio of non-performing loans to total loans; CAP, the ratio of total equity to total assets; LNTA, the natural logarithm of total assets; OPEN, the banking freedom index; GDP, the growth rate of GDP; INF, the inflation rate; COV, dummy variable for the COVID-19 period of 2020–2021; GFC, dummy variable for the global financial crisis period of 2007–2009. Variables in italics are instrumented through the GMM procedure following Arellano and Bover (1995). Robust standard errors are in parentheses. *, **, and *** denote significance at the 10%, 5%, and 1% levels, respectively
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