What is it about?
This study assesses the impact of corporate social responsibility (CSR) practices on conventional and Islamic Egyptian banks' relative efficiency in the period 2012-2018. A three-stage approach is adopted. First, data envelopment analysis (DEA) is used to assess the relative efficiency of Egyptian banks. Second, a CSR index is designed and used to assess the extent of aggregate CSR practices in Egyptian banks, together with their sub- dimensions. Third, a Tobit regression model is used to examine CSR's impact on these banks' technical efficiency. There is no statistically significant difference between conventional and Islamic banks regarding their purely technical efficiency. On average, Egyptian banks have achieved a medium score in their CSR practices, and conventional and Islamic banks have not shown significant differences, except in 2018. Moreover, the aggregate CSR practices positively affect the technical efficiency of Egyptian banks. Apart from the community sub-dimension, CSR sub-dimensions practices also affect the banks’ technical efficiency.
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Why is it important?
The legislative institutions and the central bank should enhance CSR practices in Egyptian banks, particularly the practices related to customers and the community, to enhance these banks' purely technical efficiency.
Perspectives
The paper is original in investigating CSR's impact on banks' relative efficiency in Egypt.
Dr. Ahmed Mohamed Habib
Independent Research Unabhangige Finanzmarktanalyse GmbH
Read the Original
This page is a summary of: Do corporate social responsibility practices affect the relative efficiency of Egyptian conventional and Islamic banks?, International Journal of Emerging Markets, April 2021, Emerald,
DOI: 10.1108/ijoem-05-2020-0518.
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Do corporate social responsibility practices affect the relative efficiency of Egyptian conventional and Islamic banks?
Purpose – This study assesses the impact of corporate social responsibility (CSR) practices on conventional and Islamic Egyptian banks' relative efficiency in the period 2012-2018. Design/methodology/approach – A three-stage approach is adopted. First, data envelopment analysis (DEA) is used to assess the relative efficiency of Egyptian banks. Second, a CSR index is designed and used to assess the extent of aggregate CSR practices in Egyptian banks, together with their sub- dimensions. Third, a Tobit regression model is used to examine CSR's impact on these banks' technical efficiency. Findings – There is no statistically significant difference between conventional and Islamic banks regarding their purely technical efficiency. On average, Egyptian banks have achieved a medium score in their CSR practices, and conventional and Islamic banks have not shown significant differences, except in 2018. Moreover, the aggregate CSR practices positively affect the technical efficiency of Egyptian banks. Apart from the community sub-dimension, CSR sub-dimensions practices also affect the banks’ technical efficiency. Practical implications – The legislative institutions and the central bank should enhance CSR practices in Egyptian banks, particularly the practices related to customers and the community, to enhance these banks' purely technical efficiency. Originality/value – The paper is original in investigating CSR's impact on banks' relative efficiency in Egypt. Keywords: CSR; DEA; Conventional Banks; Islamic Banks; Emerging Markets.
Emerald Publishing Limited
Do corporate social responsibility practices affect the relative efficiency of Egyptian conventional and Islamic banks?
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