The effect of national culture and social capital on banking ESG performance: Evidence from Europe

IF 7.5 1区经济学 Q1 BUSINESS, FINANCE

International Review of Financial Analysis Pub Date : 2025-03-12 DOI:10.1016/j.irfa.2025.104084

Filippos Ioannidis , Kyriaki Kosmidou , Constantin Zopounidis

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Abstract

This study explores the role of a country's culture and social capital in the performance of European banks concerning Environmental, Social, and Governance (ESG) factors. We applied a random effects model using ESG data of 112 banks from 25 countries for 7 years (2017–2023). Our empirical findings suggest that the dimensions of national culture have a statistically significant impact on the ESG performance of European banks. Specifically, power distance and uncertainty avoidance have a positive association with banking ESG scores. However, empirical findings indicate that individualism, indulgence and social capital have a statistically significant negative impact on the ESG performance of European banks. Our findings related to masculinity and long-term orientation show that those dimensions do not affect the ESG scores of European banks. Finally, we found no significant impact of cultural dimensions and social capital on the performance of the environmental and governance sub-pillars when solely examined.

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来源期刊

International Review of Financial Analysis BUSINESS, FINANCE-

CiteScore

10.30

自引率

9.80%

发文量

366

期刊介绍： The International Review of Financial Analysis (IRFA) is an impartial refereed journal designed to serve as a platform for high-quality financial research. It welcomes a diverse range of financial research topics and maintains an unbiased selection process. While not limited to U.S.-centric subjects, IRFA, as its title suggests, is open to valuable research contributions from around the world.