Using CSR to mitigate information asymmetry in the banking sector

• Authors: Andreea Semenescu , Cătălin Valeriu Curmei
• Languages of publication: EN

Abstracts

EN

The paper examines the power of corporate social responsibility to reduce information asymmetry and to act as a marketing instrument in the banking sector. Trust is the most important asset of a bank. Therefore, banks are motivated to use the most effective instruments to diminish information asymmetry with their stakeholders. The fact that cash disbursements in CSR actions are not directed towards shareholders makes them more valuable signals to other stakeholders regarding the financial soundness of the bank. The empirical study conducted based on limited dependent variable models supports the effectiveness of the CSR as marketing instrument in banking. It reveals the circumstances associated to a higher probability of an active CSR policy conducted by a banking institution. The results support the hypothesis that in the banking sector CSR is perceived as an instrument which helps stakeholders reduce information asymmetry. As marketing instrument, CSR contributes to increasing the tangibility of the banking products, decreasing their perceived variability and thus making them more attractive for the clients and allowing for differentiation between competitors.

Keywords

EN

corporate social responsibility; banking; information asymmetry; marketing instrument

• Publisher: Sciendo
• Journal: Management & Marketing
• Year: 2015
• Volume: 10
• Issue: 4
• Pages: 316-329

Dates

published

2015-12-01

online

2016-03-19

Contributors

author

Andreea Semenescu

• The Bucharest University of Economic Studies, Bucharest, Romania

author

Cătălin Valeriu Curmei

• The Bucharest University of Economic Studies, Bucharest, Romania

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Identifiers

DOI

10.1515/mmcks-2015-0021