Title: Investment in ESG activities and bank performance: does bank ownership matter?

Authors: Marc Kouzez; Ji-Yong Lee; Jomana Mahfod-Leroux

Addresses: ICN Business School, CEREFIGE, Université de Lorraine, Les Collines de l'Arche, 76 Route de la Demi-lune, 92800 Puteaux, France ' Audencia Business School, 8 Rte de la Jonelière, 44300 Nantes, France ' VALLOREM, Université d'Orléans, 135 Rue de Blois BP 26739 45067 Orléans Cedex 2, France

Abstract: In this paper, we investigate the relation between environmental, social and governance (ESG) activities and bank performance in European markets. Different from existing literature, we also explore whether ESG activities differently affect the performance of foreign-owned banks and domestic-owned banks. The results show that higher involvement in ESG activities is associated with better performance only for foreign-owned banks, and suggest that investment in ESG activities is relevant for foreign banks since it helps to obtain legitimacy in foreign markets, and enhance their reputation on international level. Our findings provide a better understanding of whether a bank's ESG activities are in the interest of shareholders, and partially explain the contradictory results in previous studies.

Keywords: bank performance; ESG; foreign banks.

DOI: 10.1504/IJBGE.2024.139628

International Journal of Business Governance and Ethics, 2024 Vol.18 No.4/5, pp.357 - 374

Received: 07 Jun 2022
Accepted: 20 Oct 2022
Published online: 05 Jul 2024 *

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