Does being a responsible bank pay off? Evidence from the COVID-19 pandemic
Year: 2024
Type: article
Abstract: We investigate whether banks’ initial responses during the first wave of the COVID-19 pandemic in supporting their customers, communities, and governments were perceived as value-enhancing by investors. Using a unique responsible banking measure for a sample of the largest US and European commercial banks, we find a negative relationship between responsible bank behavior and stock market performance, particularly in the first wave of the pandemic. We also find that riskier banks were affected more negatively if they behaved responsibly. Overall, our findings show that banks’ responsible behavior during a crisis reduces, or at best is not relevant to, shareholder value.
Source: Journal of Financial Stability
Authors: Alper Kara, Steven Ongena, Yilmaz Yildiz
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $3,370
OpenAlex ID: W4401626615