This study empirically investigates the link between competition (measured by the Lerner index) and banks’ Environmental, Social, and Governance Controversies (ESGC). Using a logit regression analysis on a sample of European banks over the period 2010–2020, we find that banks respond to increased competitive pressure from consumers and competitors by avoiding their engagement in ESG controversies that can undermine their reputation. Overall, these results highlight that competition is an important factor that stimulates banks’ sustainability practices in order to preserve their competitive advantage. These findings are robust and hold for alternative measures of market competition and ESG controversies.

Cicchiello, A. F., Cotugno, M., Foroni, C., Does competition affect ESG controversies? Evidence from the banking industry, <<FINANCE RESEARCH LETTERS>>, 2023; 2023 (55): N/A-N/A. [doi:10.1016/j.frl.2023.103972] [https://hdl.handle.net/10807/234871]

Does competition affect ESG controversies? Evidence from the banking industry

Cicchiello, Antonella Francesca
;
Cotugno, Matteo;
2023

Abstract

This study empirically investigates the link between competition (measured by the Lerner index) and banks’ Environmental, Social, and Governance Controversies (ESGC). Using a logit regression analysis on a sample of European banks over the period 2010–2020, we find that banks respond to increased competitive pressure from consumers and competitors by avoiding their engagement in ESG controversies that can undermine their reputation. Overall, these results highlight that competition is an important factor that stimulates banks’ sustainability practices in order to preserve their competitive advantage. These findings are robust and hold for alternative measures of market competition and ESG controversies.
2023
Inglese
Cicchiello, A. F., Cotugno, M., Foroni, C., Does competition affect ESG controversies? Evidence from the banking industry, <<FINANCE RESEARCH LETTERS>>, 2023; 2023 (55): N/A-N/A. [doi:10.1016/j.frl.2023.103972] [https://hdl.handle.net/10807/234871]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10807/234871
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