Abstract
This paper aims to measure the relationship between Corporate Social Responsibility (CSR), Corporate Governance (CG), and profitability in listed Egyptian banks. COVID-19 is expected to affect this relationship if the year 2020 is taken. Profitability is measured by earnings per share (EPS), return on equity (ROE), and return on assets (ROA). CSR is measured as a dummy variable and CG is measured by the chief executive officer (CEO) duality. There are three control variables, such as the Islamic variable, which classifies a bank into Islamic or conventional, bank age, and bank size. The paper uses multiple regression and logistic regression models. The final sample is 12 banks consisting of 9 conventional banks and 3 Islamic banks (IBS). The results show no impact of profitability on CSR. The results prove a significant positive impact of profitability on CG; there is a significant negative relationship between CEO duality and EPS at a 0.05 level. CSR has a significant impact on CG at a 0.001 level. The results show a clear impact of COVID-19 on the impact of CSR on profitability only when measured by ROA at 0.001 in the period 2014–2019.
Highlights
The global shift towards social and charity sustainability has encouraged financial firms and banks to adopt corporate social responsibility (CSR) practices in their strategies and operations to increase their reputation
The final sample is 12 banks consisting of 9 conventional banks – Commercial International bank (CIB), Credit Agricole (CAE), Egyptian gulf (EG), Export Development bank of Egypt (EDBE), Housing and developing (HDB), National Bank of Kuwait (NBK), Qatar National Bank (QNB), Société Arabe Internationale de Banque (SAIB), Suez Canal, Union National bank (NBE) and three Islamic banks (IBS); Faisal Islamic bank of Egypt (FIB), Abu-Dhabi Islamic bank (ADIB), and Al-Baraka (ABE)
Results from the multiple regression model 1 that cant negative relationship between chief executive officer (CEO) duality measured the impact of Corporate Social Responsibility (CSR) on earnings per share (EPS) find a signif- and CSR at 0.001 and 0.05 levels, respectively; icant negative relationship between CEO duality, when the CEO duality increases by one, CSR dewhich is considered an indicator for the absence clines by 3.357 and 2.936, respectively
Summary
The global shift towards social and charity sustainability has encouraged financial firms and banks to adopt corporate social responsibility (CSR) practices in their strategies and operations to increase their reputation. Banks are heavily regulated institutions that strive to ensure sustainability and build a better society through CSR to restore their reputation and moral success, especially after the 2008 global financial crisis (Tulcanaza-Prieto et al, 2020). CSR is a shield against financial scandals and a self-regulation process for the corporations to ensure their ethical business conduction. Under Egyptian Vision 2030, CSR is given much more attention to meet the sustainable development requirements of the Egyptian community. CSR should comply with environmental, social and governance (ESG) assessment criteria to achieve development, to highlight the role of all stakeholders, and to prepare responsible generations.
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