企業社會責任與成本效率之關係-隨機成本邊界法 - 政大學術集成

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(1)國立政治大學金融學(系)研究所碩士學位論文. 企業社會責任與成本效率之關係-隨機成本邊界法 Does CSR Influence The Efficiency治 of Banking Industry?. 政. 大. 立 Cost Frontier Approach The Stochastic ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. 指導教授:黃台心博士研究生:張穎中撰. 中華民國 106 年 7 月.

(2) Abstract This paper attempts to examine the effect of corporate social responsibility on cost efficiency, using OrbisBank database and CSR index from EIRIS database. Previous studies are all focused on the efficiency with different environmental variables, excluding corporate social responsibility nor do those studies elaborate the effect of CSR on cost efficiency by using stochastic frontier approach. Instead, existing literatures are all regards to the relation to financial performance and CSR. Therefore, we get the gold. 政治大 The empirical results we extract 立 from the paper give us some perspectives on opportunity to shed the light on the correlation with CSR and cost efficiency.. ‧ 國. 學. CSR. CSR engagement takes time to have influence on efficiency and it does vary from different countries; therefore, taking country-variation into. ‧. consideration is essential when estimating efficiency. What’s more, we. sit. n. al. er. io. long-term investment.. y. Nat. shouldn’t expect the involvement of CSR is short-term effect instead it’s a. Ch. engchi. i n U. v. Key word: corporate social responsibility, cost efficiency, stochastic frontier approach, EIRIS, CSR I.

(3) Content 1. Introduction .................................................................................................... 1 2. Literature Review ................................................................................................... 3 3. Methodology ........................................................................................................... 7 3.1 Translog cost function ............................................................................... 7 3.2 CSR hypothesis ......................................................................................... 9 3.3 Economies of scale (SE) ........................................................................... 9 3.4 Cost efficiency......................................................................................... 10. 政治大. 4. Data description .................................................................................................... 10. 立. 4.1 Data sources ............................................................................................ 10. ‧ 國. 學. 5. Empirical results ................................................................................................... 18. ‧. 6. Conclusion ............................................................................................................. 23. sit. y. Nat. 7.Reference……………………………………………… …………………. 29. n. al. er. io. 8.Appendix ................................................................................................................. 28. Ch. engchi. II. i n U. v.

(4) Table Table 4. 1 Bank distribution across countries and over time ( Group 1)……...11 Table 4. 2 Bank distribution across regions and over time ( Group 1)………..12 Table 4. 3 Bank distribution across countries and over time ( Group 2)……...12 Table 4. 4 Bank distribution across regions and over time ( Group 2)………..13 Table 4. 5Variable definitions ………………………………………………...14 Table 4. 6 Sample statistics for thentire sample………………………………17 Table 4. 7 CSR index cluster of overall samples……………………………...17. 政治大 Table 5.1Parameter estimates立 of the translog cost function…………………..19. Table 4. 8 CSR index statistic description of overall sales……………………17. ‧ 國. 學. Table 5. 2 CSR index cluster with Efficiency Score………………………….20 Table 5. 3 Average cost efficiency across in different regions………………..21. ‧. Table 5. 4 Cost share of labor (S1), capital (S2), and funds (S3) of overall. sit. y. Nat. sample…………………………………………………………………………22. n. al. er. io. Table 5. 5 Average of Economic of Scale for overall sample………………...22. Ch. engchi. III. i n U. v.

(5) 1. Introduction. Nowadays, the environment of banking industry is hard to make profits due to shrinking spread in developed countries, which may result from keen competition among domestic and foreign banks. Since 1990, Taiwanese government has taken step to deregulate its financial market. As a result, many new domestic commercial banks bloomed and at the same time branches of foreign banks entered our land, waiting to be in on the action. Overbanking has led Taiwan’s banking sector be close to perfect competition resulting in narrow net interest margin in the market, falling below 1.5% after 2008 (source:中央銀行). We all acknowledge that the banking system plays a critical role in an economy (Levine, 2005; Shen and Lee,. 政治大. 2005) not only because the safe and sound services it provides, but also many. 立. people are involved in the service chain. Once it goes bankrupt, people are affected. ‧ 國. 學. heavily due to the dependence on banking sector for liquidating money and scarce loanable funds fail to be allocated efficiently to alternative projects. That is, financial institutions are sometimes said to be “too big to fail”. The financial crisis,. ‧. occurred in 2008, made the banking system chaotic in the U.S. and many other. y. Nat. countries. The irresponsible behaviors of some banks gave rise to bankruptcy and. io. sit. failing. Owing to those financial catastrophes, regulators and supervisors have. n. al. er. started to fix the chaos and reorganize the structure of financial industry ever since. i n U. v. then. Obviously, facing with such a challenging environment, banks are desperate. Ch. engchi. to find the other ways out to implement to see if they can turn the tide. Besides, external cost and exploited resources from the society should be considered as another issue when banks are running their businesses; hence, feedbacks or compensation is necessarily to be put into considerations for banks. Due to the narrowing interest spread and the external costs made by financial institution, here we would like to provide an alternative trying to amend the possible disaster owing to careless or irresponsible behavior and simultaneously assist banks to rethink the profit model. As we know, corporate social responsibility (CSR) is prevalent to different spectrum of industries, it is probably worthwhile for banks to give it a try and rethink the profiting doctrine they follow to compensate the society. However, why should banking sector take initiative to carry out CSR? Does it pay to be good? These are the questions we attempt to dissolve in this study. 1.

(6) So far, there is no appropriate definition of CSR. Milton Friedman’s wellknown response of what are corporate social responsibilities is: ”a corporation’s responsibility is to make as much money for stockholders as possible.” It may sound uncivil or cruel. But Friedman has his own admonition that pursing profits leads to social good (Milton Friedman, 1970). It can also be identified as “the managerial obligation to take action to protect and improve both the welfare of society as a whole and the interest of organizations” (Davis and Blomstrom, 1975). An alternative definition is “proactive social responsiveness view” that emphasizes a company’s long-term role. Nevertheless, we support the broad explanation of CSR as creating shared value (CSV), first proposed by Porter and Kramer (2011). To be more specific, the concept of CSV focuses on the connection between societal and economic progress and prosperity. Firms are not only doing good,. 政治大 society while providing services. It is a brand-new concept for banking sectors to 立 apply in reality. Socially Responsible Investment (SRI) is one of the principles that. which is the doctrine of CSR, but also doing good to create shared value for the. ‧ 國. 學. for firms to abide by when investing, which can be dated back to hundreds of years ago. While complying with SRI, environment, social and governance (ESG) are. ‧. three elements for firms to follow. And in this study, we intend to use the CSR. y. Nat. index from EIRIS database which covers the domain in human rights, human. al. er. io. governance.. sit. resources, environment, community involvement, business behavior and corporate. iv n mention U couples. n. Furthermore, there are numerous studies showing the correlation between CSR. Ch. and financial performance. (Kelly, 2004). We will. engchi. of related. studies so we can compare with those results in the end. Some of previous studies suggest that there is a positive relationship between CSR involvement and consumers’ attitude, e.g., Brown and Dacin (1997), Creyer and Ross (1997), Ellen, Mohr , and Webb (2000), to mention a few. The stakeholder theory of Freeman (1984) stresses that consumers are one of the important stakeholder groups. Therefore, if consumers are more than willing to pay higher price, then they contribute to higher revenue to the firm, which is able to compensate the added costs entailed by CSR. There are few studies related to corporate social responsibility impact on banking industry efficiency by using stochastic frontier approach (SFA) to estimate a cost frontier, this paper is contributed to this field by examining the effect and provides an alternative channel 2.

(7) for banks to contemplate. The thesis is organized as follows. In Chapter 2, we present a brief review of existing literature in regards to the assessment of bank’s efficiency and the relationship between CSR and CFP 1 . Chapter 3 introduces the stochastic cost frontier approach. Chapter 4 depicts data collection, defines variables, and presents descriptive statistics. We explain how to construct the CSR index in details. Chapter 5 conducts our empirical study and analyzes the results, while the last chapter concludes the thesis and claims some limitations of the research. The thesis follows suit.. 2. Literature Review. 立. 政治大. When estimating the efficiency of banking industry, there are various. ‧ 國. 學. approaches and wide spectrum of independent variables can be nominees to assess efficiency. Efficiency can be estimated either by production frontier, or cost. ‧. frontier, or profit frontier. The production function can be specified as CobbDouglas, CES (constant elasticity of substitution), and translog forms. A cost or. sit. y. Nat. profit function can also be specified as translog and Fourier flexible forms (see. io. er. Gallant, 1981 and 1982), which requires the use of input and output prices. Most frequently used model in banking industry is the translog cost function, which is. n. al. i n U. v. known as being flexible and allows for an interpretation on the marginal cost of. Ch. engchi. production for banks (Clark and Speaker, 1994; Weil, 2013). The Fourier flexible functional form combines a standard translog function with additional terms that are linear combinations of sine and cosine functions, also referred to as Fourier series (Huang and Wang; 2003, 2004). There are already tons of existing works that apply either a parametric or non-parametric approaches. The stochastic frontier approach belongs to a parametric approach and the data envelopment analysis (DEA) belongs to a non-parametric approach. The SFA as mentioned in the first chapter is the main method of this thesis, which was initially developed by Aigner et al. (1997) and Meeusen and van den Broeck (1997) endeavored in cross-section. 1. Here we define CFP as corporate financial performance in terms of either financial ratio, return on assets, return on equity, or the efficiency on banking scope by using net interest margin and technical efficiency. 3.

(8) data when utilizing SFA to estimate efficiency. Later, panel data is recommended by Schmidt and Sickles (1984) to estimate technical efficiency (TE) for firms. Nonetheless, earlier panel data models all counted on the assumption of timeinvariant efficiency, which is likely inconsistent with the reality. Not until Cornwell et al (1990) and Battese and Coelli(1992) relieved this assumption. Most researchers utilize maximum likelihood (ML) to estimate the parameters of interest. The variable of CSR is treated as one of the environmental variables. We then investigate the impact of CSR on banks’ efficiency. It is interested to know whether CSR positively or negatively affects the cost efficiency of banks. Since there is little study regarding to CSR and efficiency, here we will mention some studies in regards to CSR with financial performance covering different industry. There are several papers analyzing the relationship between CSR and financial performance,. 政治大 so on. Unfortunately, mixed results are found. We will briefly review some of them. 立 First, some scholars claim that conducting CSR incurs extra costs for firms (Vance,. including return on assets (ROA), return on equity (ROE), technical efficiency, and. ‧ 國. 學. 1975), since firms would have to employ additional resources that would be otherwise used to produce goods and services in pursuit of maximizing economic. ‧. profits (or minimizing production costs). Anginer et al. (2008), Brammer et al.. y. Nat. (2005), and Nejati and Ghasemi (2012) argue that CSR is a misuse of allocating. sit. corporate resource, because the deployment of resources on CSR will put firms in a. al. er. io. relatively economic disadvantage at the same time. Walley and Whitehead (1994). v i n meta-analysis, i.e., Margolis and C Walsh and Orlitzky, Schmidt, and Rynes h e(2003) ngchi U n. demonstrate a limited return on CSR engagement. Contrarily, two studies related to (2003), reveal the positive relationship between CSR and CFP in a modest level. Alexander and Buchholz (1978), Aupperle et al. (1985), and Shane and Spicer (1983) fail to find the association of CSR with CFP. Meanwhile, positive relationship between CSR, ROA, and ROE is documented by Tsoutsoura (2004) by using Kinder, Lyndenberg and Domini (KLD)2 so do Orlitzky et al.’s (2003) and Rettab et al (2009) conduct same positive result of CSR in financial performance, personnel commitment, and corporate integrity. Barnett and Salomon (2006) further indicate that CSR and financial performance share the curvilinear relation which gives us the other idea to define the association of CSR with efficiency.. 2. Kinder, Lydenberg and Domini & Co. (KLD), a social choice investment advisory firm which has made available their social performance database. 4.

(9) On the other hand, if we only look into the specific industry, banking industry, the results shown in those theories are much more consistent. When digging into the socially financial performance of banking sector, researchers solidly support the hypothesis that the link between social and financial performance is positive (W. Gary ; Simpson;Theodor Kohers, 2004). Additionally, when it comes to the CSR and efficiency in a single country, Ohene-Asare and Asmild (2011) are the scholars who contribute to this field greatly. They examine the efficiency of Ghanaian banks with CSR as one of the environmental variables and conclude that banks that are socially responsible may have economic advantages on profitability and efficiency. They no more view CSR as conceptual grounds. Keffas and Olulu-Briggs (2011) confirm the correlation between CSR and financial performance in the U.S., UK and Japan. In their studies, there are two groups, one declares the presence of CSR,. 政治大 not only benefits bank’s capital adequacy but also accumulates the competitive 立 advantages in the long-run. The positive and strong relevance of CSR and firm. and the other group of CSR is absent. The authors come to the conclusion that CSR. ‧ 國. 學. performance is agreed by the findings of Alafi and Hasoneh (2012), which are based on housing banks in Jordan.. ‧. The foregoing inconsistent results may be interpreted by, e.g., Baron (2001). y. Nat. and Dam et al (2009), who affirm that different motives of corporation initiating. sit. CSR result in dissimilar relationship between CSR and financial performance.. al. er. io. Distinct motives include altruism, strategic choices, and green washing 3 . The. v i n in terms of non-performing loans.CStrategic choices support positively association U heng i h c n. motivation of altruism usually predicts negative correlation between CSR and CFP between CSR and financial performance, including ROA, ROE, net interest income, and non-interest income. Greenwashing presents no significant effect of CSR on FP (Wu and Shen, 2014). Despite of the motivation differences that contribute to the conflicting result of CSR impact, some researchers deem the effect of CSR may be influenced by other exogenous factors, e.g., the growth of an industry that will positively mitigate the connection between application of CSR and CFP (Russo and Fouts, 1997). This 3. The altruism motive indicates that companies conduct CSR activities for their own sake. Recent theories of CSR (see McWilliams and Siegel, 2000, 2001; Baron, 2001; Hillman and Keim, 2001; Bagnoli and Watts, 2003) assert that firms especially engage in CSR for 'strategic' or 'protmaximizing'. According to Dam et al. (2009), if no clear cost difference are observed between responsible and irresponsible corporations, then these firms are merely greenwashing hence no effects will become evident in their earnings. 5.

(10) implies that non-systematic risk and macroeconomic condition should also be considered at the same time. According to Barros et al. (2007), the efficiency scores estimated from the common frontier4 model are apt to be influenced by individual countries conditions. This implies that the omission of cross-country differences, such as demographic and economic and political systems, might lead to biased efficiency measures. Allen and Rai (1996) and Altunbas et.al (2001) estimate global cost frontiers for all banks from different countries, assuming common production technology across nations. There is a growing consensus on the importance of environmental variables played in efficiency estimation. Those environmental factors are not controlled by managers and must be treated as exogenous variables. See, for example, Battese and Coelli (1995), Dietsch and Lozano-Vivas (2000), and Kumbhakar and Wang (2007). In this thesis we consider several of such variables. 政治大 well as those relevant to cost function. 立 In spite of the discussions of CSR influence, there is another interest issue that are associated with efficiency scores. Chapter 4 describes those variables, as. ‧ 國. 學. having been examined, i.e., the cushion effect of CSR engagement on stock price and bond price, when firms happen to face negative events. Yang and Shiu (2016). ‧. collect 399 sample points, consisting of 55 financial and 344 non-financial firms.. y. Nat. Their results suggest that the CSR engagement does help firms exempt from the. sit. decrease in bond or stock price, when negative events occur. However, the. al. er. io. insurance-like effect only exists with continuous involvement in CSR and will. v. n. vanish within a short time following the occurrences of a second or subsequent, negative event.. Ch. engchi. i n U. To sum up, one should not expect CSR engagement can benefit firms within a short time period, say, one or two years. Mullen (1997) and Yang (2015) state that CSR programs usually require lasting 3-5 years to gain the firms. Moreover, Longterm CSR engagement not only benefits the efficiency of firm itself, but also decreases the effect of competitor’s long-term CSR by increasing its own long-term CSR engagement. There are few studies investigating the direct impact of CSR on bank’s efficiency in the context of SFA. For this study, since input prices are available from the Bankscope databank, we suggest the use of the cost frontier to estimate the cost efficiency of the sample 4. Cost efficiency and alternative profit efficiency are estimated separately from best practice frontiers using panel data methods. A common frontier is specified due to similarities in regulation and technology across markets 6.

(11) banks, which may be a preferable measure for regulators and business consultants who attempt to gauge the costs and benefits to society from distinct policies to the conventional inefficiency measure based on a production frontier. It is known that a production function is suitable for a single output case without using the information on input prices which are key variables affecting the decision on inputs hiring. Therefore, the applying of cost frontier is recommended due to diversifying financial products banks provide (Huang,Chiang and Chen; 2011). Different from previous studies, we apply the SFA (SFA) to investigate the relationship between cost efficiency and CSR index that is compiled from EIRIS database.5. 3. Methodology 3.1 Translog cost function. 政治大 Unlike parametric methods, non-parametric DEA does not allow for random 立 error term in the model. That is, DEA presumes that there is no measurement error,. ‧ 國. 學. no inaccuracies related to accounting figures. Following Battese and Coelli (1995), we apply parametric approach, the SFA, to gauge cost efficiency scores, which. ‧. allows for random error and identifies the environmental factors related to cost. y. Nat. efficiency by a single-step. The SFA assumes the existence of composed errors. One. sit. of them is a non-negative random variable, representing technical inefficiency. This. al. er. io. one-sided error is assumed to have one of the following distributions: half-normal,. v i n error with a normal distribution. C Cost the distance between a h efficiency e n g c measures hi U n. truncated normal, exponential, and gamma distribution. The other is a two-sided bank’s actual costs and the efficient cost frontier. The estimated bank cost inefficiency is referred to as the difference between observed costs and predicted minimum costs for a given scale and mix of outputs, input prices and other countrylevel explanatory variables. ( Battaglia et al., 2010). However, when taking crosscountry comparisons into consideration, it is worth to note that environmental heterogeneity among countries play an important role on the determination of efficiency level. Country-specific factors, such as economic development can influence heavily on the level of technical efficiency. (Fries and Taci, 2005). Thus, 5. EIRIS is one of the largest independent SRI research organisations worldwide. Its core business is undertaking research into corporate environmental, social and governance (ESG) management and performance. It provides global coverage, offering data on more than 80 research areas for some 2,800 companies in Europe, North America and Asia Pacific. 7.

(12) the translog cost function is expressed as: yijt = α + X′ijt β + Z′jt γ + vijt + uijt and εijt = vijt + uijt. (1). where yijt is the (log) total cost of bank i in country j at period t, X′ijt is a vector of (log)outputs and of input prices, Z′jt is the vector of country level variables for country j at period t. Notation ε is the composite error term, where v is the twosided normally distributed error with mean zero and a constant variance, capturing random error, and uijt > 0 is the technical inefficiency term. The translog cost function is often used in the banking and finance literature to estimate the marginal costs of production and the output elasticities of input demand for banks. The following specific form is transformed from general form of the translog cost function [equation (1)].. 政治大 = α + ∑ α lnY ∑ β ln W + δ t 立. lnTC = lnTC∗ + ε. 3. 0. 3. j. 3. j+. j=1 3. i. i. 1. i=1. ‧ 國. 學. 1 + ∑ ∑ δjk lnYj lnYk 2 j=1 k=1 3 3. ‧. 1 1 + ∑ ∑ γik lnWi lnWk + δ2 t 2 2 2. y. Nat. i=1 k=1 3 3. n. al. 3. + ∑ θj lnYj t + ∑ λi lnWi t + ε j=1. C h i=1 engchi. er. io. i=1 j=1 3. sit. + ∑ ∑ ρij lnWi lnYj. i n U. v. Where lnTC is the natural logarithm of the actual expenditure, lnY𝑗 and ln𝑊𝑖 are the ith logarithmic output quantities and the jth logarithmic input prices, respectively. In order to satisfy the requirement of a cost function, we hereby standardize the input price of W1 to add first order homogenous condition into the functional form, i.e., TC, W2, and W3 will be normalized by dividing W1. 6. 6. Although we select W1 as the standardized variable, W2 or W3 can be alternatively chosen. 8.

(13) 3.2 CSR hypothesis As we stated in Chapter 2, the effect of CSR on corporate financial performance is controversial. The mixed result might be explained by the motives of a firm to conduct CSR. Therefore, here we propose three hypothesis. Hypothesis 1. For altruistic CSR bank, CSR negatively affects efficiency. The altruism motive indicates that banks conduct CSR initiatives for their own sake, thereby negatively affecting efficiency. Hypothesis 2. For strategic CSR bank, CSR positively affects efficiency. The strategic CSR banks are inclined to pursue profit maximization by. 政治大. enhancing their reputation and brand names through activities which include environment protection, charity behavior, integrity to customers, and maintenance. 立. the right for employees. According to Benabou and Tirole (2010), this perspective. ‧ 國. 學. demonstrates win-win vision of CSR and they believe that strategic CSR involves taking a socially responsible position to strength market position to increase profit.. ‧. Hypothesis 3. Greenwashing CSR exhibits no obvious effect on efficiency.. sit. y. Nat. Greenwashing refers to the disingenuous act of banks to spin their products and policies as environment-friendly, such as presenting cost cuts as reductions in. io. n. al. er. resource use (Frankental, 2001).. 3.3 Economies of scale (SE). Ch. engchi. i n U. v. When estimating the cost function, the issue of scale economies is worth assessing. If economies of scale do exist, then firms can take actions to expand the production scale in order to decrease their long-run average costs. However, if the reverse is true, reducing operation scale may help to lower down long-run average costs. The definition of SE is expressed as: 𝐶 ∗ (𝑌,𝑊) SE= 3 ∑𝑗=1 𝑌𝑗 𝐶𝑗∗ (𝑌,𝑊). Here 𝑇𝐶 ∗ (𝑌, 𝑊) is the translog cost function, and 𝑇𝐶𝑗∗ (𝑌, 𝑊) denotes the partial derivative of 𝑇𝐶 ∗ with respect to the jth output. If SE > (<) 1, then increasing (decreasing) returns to scale presents. If SE = 1, then constant returns to 9.

(14) scale prevails, meaning that the current production scale of the bank is optimal.. 3.4 Cost efficiency The ratio of the cost inefficiency for the i-th bank, relative to the potential cost, defined by the frontier function, given the output vector, xi, is used to define the cost efficiency of i-th bank: CE𝑖 =. 𝐶𝑖∗ 𝐶𝑖. exp(X′ijt 𝛽). = exp(X′. ijt 𝛽+𝑢𝑖 ). (2). = exp(−𝑢𝑖 ). Where Ci* is minimum cost and Ci is actual cost. The equation 2 is a measurement of cost efficiency, of which the value is equal or less than one after the ratio is reciprocal. Finally, we will apply cost efficiency method to analyze the difference of cost efficiency in distinct regions.. 立. 政治大. ‧. ‧ 國. 學. 4. Data description. 4.1 Data sources. y. Nat. sit. We first introduce how to construct the pivotal variable of the CSR index. er. io. obtained from EIRIS Sustainability survey, spanning 2010-2014. The survey covers. al. v i n investigating the involvement of C CSR for different firms. h e n g c h i U In EIRIS, the questions n. wide range of corporate social responsibility collected by questionnaire aiming at are customized to measure the risks and performances of companies in 41 sectors. on 38 ESG ( Environment, Social and Governance) criteria based on international standards, which are further divided into 6 domains of corporate social responsibility, including environment, human rights, human resources, community involvement, business behavior, and corporate governance. The response rate of the questionnaire differs across banks and years. According to Brammer and Pavelin (2004) and Brammer et al. (2006), this survey by EIRIS offers the largest and most sound multidimensional social performance coverage. In the questionnaire, there are lots of questions covering from the field of subsidiaries to the proportion of stocks owned by the employees etc. We use the criteria in Wu and Shen (2013) to categorize those questions. For qualitative questions, some are two-scale “yes” or 10.

(15) “no”, while some are three scale (e.g, “many, some, or none”) and four to six scale choices. The more complicated thing is that some positive replies favor CSR, 7 whereas others imply oppositely.8 For convenience, we refer to these two kinds of questions as positive and negative attitude questions, respectively.. The. transformation of text answer in the survey into a single aggregate value is simple by adding all the transformed number. Appendix 1 shows the detailed conversion of CSR scores. After deleting incomplete data, we obtain 121 sample banks from 22 countries. We next collect accounting statements for those banks from Orbis Bank database, originally Bankscope. All dollar-valued variables are measured by millions of US dollars and deflated by the consumer price indices, extracted from the World Bank, of individual countries with base year 2010. Because some banks fail to disclose the. 政治大 groups. One of them includes NPL along with other exogenous variables, called 立 group1. The other group, called group 2, replaces NPL by loan to asset ratio,. item of non-performing loan (NPL), we separate our environmental factors into two. ‧ 國. 學. together with other exogenous variables. Group 1 has 114 sample banks from 19 countries with 423 bank-year observations, where most of the sample banks come. ‧. from Asia (Japan), North America (the United States), and Europe. Group 2 has 121. y. Nat. banks from 22 countries with 457 bank-year observations and the additional. n. al. er. io. across countries and over time is summarized in Tables 4.1-4.4. sit. observations are from Austria, Belgium, and Singapore. The distribution of banks. Ch. engchi. i n U. v. Table 4.1 Bank distribution across countries and over time (Group 1) Country 2010 2011 2012 2013 2014 Australia Canada Cyprus Denmark France Greece Hong kong Israel 7. 4 0 0 2 0 1 2 1. 6 6 1 2 3 2 6 3. 6 6 1 1 3 2 6 3. 6 6 0 2 3 3 6 3. 6 5 0 2 3 2 6 3. Total 28 23 2 9 12 10 26 13. For example, the question ”How clear is the company’s commitment to community and charitable work?” has the following reply choices: “Advanced”, ”Good”, ”Intermediate”, ”Basic”, ”Limited ”and “Little or no.” 8 For another example, the question “What is the level of potential exposure to bribery issues?” has the reply choices: “High”, “Medium”, and “Low.” 11.

(16) Japan Netherlands Norway Portugal South Korea Spain Sweden Switzerland Ukraine United Kingdom United States Total. 31 0 1 1 1 5 4 2 0 1 21 77. 23 1 1 0 3 3 4 2 1 2 18 87. 23 1 1 0 4 0 4 2 1 2 20 86. 23 1 1 1 4 3 4 2 0 2 19 89. 23 1 0 1 4 3 4 2 0 0 19 84. Table 4.2 Bank distribution across regions and over time (Group 1) Region 2010 2011 2012 2013 2014. 87. io. al. 86. 89. y. 2 3 25 7 7 6 0. 84. n. Table 4.3 Bank distribution across countries and over time (Group 2) Country 2010 2011 2012 2013 2014 Australia Austria Belgium Canada Cyprus Denmark France Greece Hong kong Israel Japan Netherlands Norway Portugal. 4 2 0 0 0 3 0 1 2 1 32 0 1 1. 165 28 7 13 120 33 27 28 2. 423. er. 77. 2 3 26 6 2 7 1. 33 6 0 3 24 6 6 6 0. sit. ‧ 國. 立. 政 33 治 33 大 6 6. ‧. 32 6 2 3 24 7 5 7 1. Total. 學. Total. 34 4 1 1 21 7 7 2 0. Nat. Asia Australia British Middle East Asia North America North Europe South Europe West Europe Other. 123 4 4 3 16 14 20 10 2 7 97 423. Ch. 6 2 0 6 1 3 3 2 6 3 24 1 1 0. e n6g c h i 6 2 0 6 1 2 3 2 6 3 24 1 1 0 12. i n U. 2 1 6 0 3 3 3 6 3 23 1 1 1. v. 6 2 0 5 0 3 3 2 6 3 23 1 0 1. Total 28 10 1 23 2 14 12 10 26 13 126 4 4 3.

(17) 1 1 5 4 4 0 1 21 84. 1 3 3 4 4 1 2 18 94. 1 4 3 4 4 0 0 19 90. 5 16 14 20 20 2 7 97 457. Table 4.4 Bank distribution across regions and over time (Group 2) Region 2010 2011 2012 2013 2014. Total. Asia Australia British Middle East Asia North America North Europe South Europe West Europe Other Total. 173 28 7 13 120 38 27 49 2 457. 立. 35 6 2 3 26 7 2 11 1 93. 1 4 3 4 4 0 2 19 96. 34 6 2 3 25 8 7 11 0 96. 政治大. 34 6 0 3 24 7 6 10 0 90. ‧. 34 6 2 3 24 8 5 11 1 94. 1 4 0 4 4 1 2 20 93. 學. 36 4 1 1 21 8 7 6 0 84. ‧ 國. Singapore South Korea Spain Sweden Switzerland Ukraine United Kingdom United States Total. y. Nat. As reported in Table 1 set, there are 114 different banks across 19 countries,. io. sit. with the majority coming from Asia (Japan), North America (United States) and. n. al. er. Europe. While group two covers 121 distinct banks across 22 countries with extra. i n U. v. sample banks from Austria, Belgium and Singapore. To sum up, there are 423 bank-. Ch. engchi. year observations in group one and 457 bank-year observations in group two. Later, we will show the empirical result of these two groups and then to select a better outcome as our determined model. Based on the intermediation approach, which regards a bank as a financial intermediary between depositors and borrowers and mirrors the familiar ”T” account model of banking used to explain the process of money creation. Accordingly, we identify three inputs and three outputs. The inputs categories are comprised of labor (X1), physical capital (X2), and borrowed funds (X3). Since the item of number of employees is missing for many banks, we instead use total assets net of fixed assets as the proxy. 9 Total loans (Y1) and investments (Y2) are two 9. As data on the number of employees are either missing or unavailable for many sample banks, the price of labor is defined as the ratio of personnel expenses to total assets. In other words, the item of 13.

(18) traditional outputs. It is noteworthy that non-interest income (Y3) is gradually growing essentially nowadays as it reveals a bank’s degree of product diversification and also constitutes critical sources of revenue it generates from non-traditional activities. Spreading out risk and decreasing production cost through resource sharing are two advantages brought by non-interest income. Hence, we define non-interest income as a type of output. Table 4. 5 shows all variable definitions. Table 4.5 Variable definitions Variable name. Description. Total loan (Y1). Short-term and long-term loans. Investments (Y2). Other earning asset, loans and advances to banks, reverse repos and cash collateral, all securities, investment in property and insurance asset. 立. 政治大. ‧ 國. ‧. n. al. er. io. sit. y. Nat. Labor (X1) Physical capital (X2) Funds (X3) Price of labor (W1) Price of physical capital (W2) Price of funds (W3) Total cost (TC) Cost share of labor (S1) Cost share of capital (S2) Cost share of funds (S3). Other operating income, total non-interest operating income equity-accounted profit/ loss - operating Total assets net of total fixed assets Total fixed assets (including property, plant and equipment) Deposits and short-term funding Total personnel expenses/ total assets Other operating expenses/ total fixed assets Total interest expenses/ total funds W1X1+W2X2+W3X3 W1X1/TC W2X2/TC W3X3/TC. 學. Non-interest income (Y3). Ch. engchi. i n U. v. As for the environmental variables, we consider those factors that affect the efficiency of a bank exogenously and are not traditional inputs as stated above. They are included to articulate the particular characteristics of each country’s financial industry, macroeconomic and regulatory conditions, as well as to reflect each bank’s traits. Unfortunately, there is no consensus on the selection of those variables and there are few theories for us to refer to when selecting environmental variables. Following Berger et al.(1993), Mester (1993), Allen and Rai (1996), Lozano-Vivas et al. (2001) and Lozano-Vivas et al.(2002), Huang et al. (2011), we total assets is used as the proxy to the number of employees. Altunbas et al. (2000, 2001), Weil (2004), Fries and Taci (2005), and others utilize the same approach. 14.

(19) relate the inefficiency term u to eight environmental variables to account for the impact of the exogenous discrepancy among countries and banks on technical inefficiency. Besides, as this study focuses the effect of CSR on cost efficiency, CSR and its squared term are two of the environmental variables. Following Barnett and Salomon (2006), the squared term of CSR is considered to capture the possible non-linear relationship between CSR and efficiency. Environmental variables are summarized as follows. 1. Equity to asset ratio (ETA): The variable is referred to as an indicator of regulatory condition of a country’s banking industry. According to Hughes and Mester(1993), Mester (1996), Berger and Mester (1997), and Huang (2000), the variable is considered as fixed netput in either a cost or a profit function. Equity capital is also known as financial capital which offers a buffer against potential. 政治大 fund loans. There are always two types of bank managers’ attitude toward risk, 立 risk-averse and risk-neutral respectively. For risk-averse managers, they will try portfolio losses and acts as a substitute for deposits and borrowed money to. ‧ 國. 學. to mitigate the insolvency risk by enhancing the level of ETA. Meanwhile, financial soundness gets improved at the expense of compelling the chosen. ‧. level of equity to deviate from the one required by cost minimization. On the. y. Nat. other hand, a risk-neutral bank manager, running banks with lower ETA ratio,. sit. implying higher loan to equity leverage, is possibly more willing to implement. er. io. policies aiming at the promotion of production efficiency and financial. al. v i n C h which may be U risk-preferences of bank managers, e n g c h i correlated with production n. performance than a risk-averse manager. To sum up, since ETA can unveil the efficiency, we include it as one of the environmental variables. The expected sign of ETA is uncertain.. 2. ROA (return on assets): ROA is defined as average return over assets and is used as an indicator of profitability, which may relate to the competitiveness in each banking industry. Previous works show the predicted relationship between ROE (return on equity) and efficiency is positive in a competitive scenario, i.e., the higher the profits, the higher the efficiency. However, since return on equity can be manipulated by managers by distorting the financial leverage. Hence, we decide to use ROA to measure the profitability. We expect the effect would be positive as ROE. This variable is also examined with the same orientation by Berger et al. (1993), Mester (1993) and Allen and Rai (1996). 15.

(20) 3. Net interest margin: The net interest margin measures the difference between interest paid and interest received, divided by the amount of interest-generating assets. Although net interest margin somehow gauges the profitability of a bank, its association with efficiency remains ambiguous because of the broad product line that banks launch and provide nowadays. According to Lin et. Al (2012), banks that are diversified can lower down the fluctuation on net interest margin. Yet, the lower volatility of net interest margin does not guarantee the higher income or higher efficiency. Lepetit et al. (2005), show that higher income from other activities is associated with lower lending rates, which suggests that banks may actually use loans as a sacrifice to replace with loanable funds.Thus; the effect of net interest margin on efficiency is in-determinant. 4. Loan/Asset: This variable enables to assess the attitude of bank’s strategy. The. 政治大 consequently higher financial risk. However, higher level of loan to asset ratio 立 may contribute to more profits for banks if non-performing loans remain stable. higher the degree of the ratio, the more loans are lent out financial risk, and. ‧ 國. 學. So the correlation between loan to asset and cost efficiency remains blurring. 5. Real GDP growth rate: Real GDP growth rate is used to reflect the overall. ‧. economic conditions. The expected correlation of this variable with bank costs. y. Nat. is ambiguous since GDP interferes with the demand and supply factors of the. sit. banking production function at the same time (Perera, Skully, and. al. er. io. Wickramanayake, 2007) and there is no guarantee that higher GDP growth rate. v. n. result in higher demands for banking services. Hence, the sign of real GDP growth rate is not yet sure.. Ch. engchi. i n U. 6. (log)Real GDP per capita: It’s defined as the ratio of a nation’s real GDP to its population, transformed by taking the natural logarithm. This macroeconomic indicator represents the proxy to the overall economic condition, affecting both demand and supply sides of banking activities, including deposits and loans, which may impact the efficiency of banks. When real GDP per capita increases, the demand for banking services boost and so does the supply of loanable funds fueled by savings. Interest rates will increase, leading to higher profits and cost efficiency for banks. Thus, this variable is expected to be positively related to efficiency. Table 4. 6 shows the overall sample statistics for the cost function, while Table 4.7 represents the CSR score clusters of overall sample across regions in the sample 16.

(21) period. Table 4.9 shows that the mode of CSR scores is equal to 20 and the mean of CSR is 43.4. This implies that the CRS index distribution is skewed to the right. The separate CSR indices for individual years are present in Appendix 2.1-2.5 Table 4.6 Sample statistics for the entire sample Variable name Mean. Standard deviation. a. Total loans 89249.2 1524642 a Investments 57773.5 372457 a Non-interest income 643.453 6295.93 Price of labor 0.02126 0.16584 Price of physical capital 2.11774 13.3169 Price of funds 0.06209 0.59206 a Total costs 7186.17 132080 Number of observations: 457 a Measured in millions of real US dollars with base year 2010. 政治大 Table 4.7 CSR index cluster of 立overall samples. ‧ 國. 14 2 0. 16 8 0. 11 1 0. 21 1 0. 0. 3. 1. 1. 2. 2. 2. 2. 4. 23. 27. 16. 13. 19. 6. 9. 0. 0. 6. 13. 8. 0. 1. 1. 0. 0. 5. 4. 6. 7. 4. 0 15. 0 92. 0 75. 0 39. 0 59. 0 52. 0 3 2. 0. 0. 13. 6. 5. 1. 0. 120. v ni. 2. 0. 0. 0. 38. 4. 5. 1. 0. 27. 1. 1. 16. 5. 0. 49. 0 45. 2 34. 0 31. 0 14. 0 1. 2 457. y. 0. al. Ch. e7n g c2 h i 6U. sit. io 0. 8 9 0. 91- 101Total 101 111 0 0 173 3 0 28 4 1 7. er. 41 1 0. ‧. 60 0 0. n. 2 0 0. Nat. Asia Australia British Middle East Asia North America North Europe South Europe West Europe Other Total. 學. CSR Score 1-11 11-21 21-31 31-41 41-51 51-61 61-71 71-81 81-91. Table 4. 8 CSR index statistic description of overall samples Mean 43.40919. Standard Standard Median Mode Error deviation 1.164332 43 20 24.89057. 17. Number of observations 102 457. Variance kurtosis Skewness. Min Max. 619.5405 -0.91045 0.398423. 1.

(22) 5. Empirical results. Table 5.1 shows parameter estimates of the translog function for group 2 since the result of group 1 is unfavorable. But still we will insert the parameter estimates of group 1 in the Appendix 3. There are 18 out of 23 parameter estimates (excluding environment variables), or 73.9% of the total independent variables, achieving at least the 10% significance level. Except for the input price and output, the 8 environment variables are all significant at least at the 5% significance level. The translog function appears to describe the data quite well. As far as the environmental variables are concerned, the variable of ETA is. 政治大 more efficient a bank will be. The result is the as same as Huang (2011) who 立 estimates the Fourier flexible cost function. As for net interest margin (NIM), the negatively related to the inefficiency term, implying that the higher the ETA, the. ‧ 國. 學. influential direction of inefficiency is opposite to ETA, meaning that the increase in NIM tends to lower bank efficiency. The result is consistent with our expectation.. ‧. Diversification can be another essential factor to affect efficiency. Banks might face. y. Nat. with the overbanking situation; therefore, starting to take diversified strategy by. al. er. io. inefficiency(Lin et. Al, 2012; Lepetit et al., 2005).. sit. sacrificing the lending rate. As a consequence, cost increases, due to. v i n inefficiency, due possibly to the C scale effect. Once loans h e n g c h i U are lent out to certain scale, a bank can take the advantage of scale to hire professional employees to n. The variable of loan to asset ratio is found to have negative effect on cost. scrutinize potential loan customers so as to earn more interest revenue and to minimize loan defaults. The coefficient of ROA, an indicator of profitability, is negative, implying that it is positively associated with efficiency, as expected. Both CSR and its squared term are considered the translog cost function. Both coefficients are significantly estimated at the 5% level, indicating that the relationship between CSR and cost efficiency are not linear, consistent with Barnett and Salomon (2006). Similarly, Mullen (1997) and Yang (2015) suggest that we should expect CSR rather in a long-term period than short-run. Putting our focus on macroeconomic variables of GDP growth rate and real GDP per capita, we can tell from the results that these two variables have different 18.

(23) impacts on efficiency. GDP growth rate negatively affects efficiency, while real GDP per capita has positive effect on efficiency. The reason might be that the GDP growth rate signifies overall economic conditions and its increase may not trigger people to have higher demand and supply for banking service; or the forces from the demand and supply sides offset each other. Instead, the increase in real GDP per capita raises the demand for an array of banking services and the supply of loanable funds fueled by savings. The effect of real GDP per capita is as expected and similar results are found, e.g., Huang (2011). Table 5.1 Parameter estimates of the translog cost function. 政治 ln(Y3)ln(W3/W1) t 大. 1.19E-01. -5.74E-02. 4.69E-02. 1.99E-01**** 9.32E-03 8.16E-03 -4.81E-02**** -3.44E-02*** 8.77E+00**** -1.04E+00**** 4.27E+00** -5.46E+00**** -1.23E+00**** 1.42E-02***. 2.63E-02 1.99E-02 2.05E-02 1.72E-02 1.61E-02 3.35E+00 3.98E-01 2.24E+00 8.27E-01 2.07E-01 6.40E-03. -1.28E-04***. 6.11E-05. 2.56E-01****. 4.35E-02. -6.71E-01***. 3.03E-01. 7.21E-01 8.80E-02. ln(Y2)ln(W3/W1). -3.85E-02****. 1.57E-02. ln(Y3)ln(W2/W1). -5.25E-02****. 1.85E-02. Log-likelohood. -3.32E+02. ‧ 國. 2.54E-01**** -8.37E-04 -2.49E-02*** -4.93E-03 1.05E+00**** 3.06E-01**** -1.40E-02**** 3.69E-04**** -8.32E-02**** 5.17E-02**** 6.99E-04. Nat. io. n. 1.13E-01 4.44E-03 1.21E-02 1.18E-02 1.07E-01 1.00E-01 2.42E-03 1.43E-04 1.10E-02 1.01E-02 1.64E-02. Ch. engchi. ‧. ln(Y3) 0.5ln(Y1)ln(Y1) 0.5ln(Y2)ln(Y2) 0.5ln(Y3)ln(Y3) ln(W2/W1) ln(W3/W1) 0.5ln(W2/W1)ln(W2/W1) 0.5ln(W3/W1)ln(W3/W1) ln(Y1)ln(W2/W1) ln(Y1)ln(W3/W1) ln(Y2)ln(W2/W1). 2 0.5t t x ln(Y1) t x ln(Y2) Tt x ln(Y3) t x ln(W2/W1) t x ln(W3/W1) Constant ETA NIM Loan/Asset ROA CSR 2 CSR GDP growth rate ln(real GDP per capita). 學. 1.68E-01*. y. 立. ln(Y2). al. Variable. sit. Constant ln(Y1). Parameter Standard estimates errors 2.88E-02** 1.72E-02 -9.16E-01**** 2.43E-01. Standard errors. er. Parameter estimates 1.60E+00*** 4.55E-01****. Variable. i n U. v. *Significant at the 10% level of significance ** Significant at the 5% level of significance ***Significant at the 2.5% level of significance ****Significant at the 1% level of significance. Here, we emphasize the effect of CSR in Table 5.2. As we stated in Chapter 4, the mode of CSR index is 20. Table 6 displays that the majority efficiency scores range from 0.6 to 0.8, where the corresponding sample banks have CSR indices 19.

(24) between 11 and 31. Taking the partial derivative of the cost inefficiency with respect to CSR, we obtain the turning point around 11. If CSR index is below 11, then the efficiency measure is decreasing with the increase in CSR, while the reverse is true when CSR index surpasses 11, i.e., the efficiency score is increasing when CSR grows. The finding enlightens us that the involvement of CSR for a bank should engage more than 11 such that the beneficiary effect on efficiency occurs. The higher CSR index usually takes more time to achieve, implying that the effect of CSR tends to be long-term instead of short-term (Mullen, 1997; Yang, 2015). Appendix 4 exhibits detailed distribution of CSR and efficiency scores across different regions. As far as the three hypotheses mentioned in Section 3.2, our results fail to support the greenwashing hypothesis, but partially support the. 政治大 engages CSR activities with the score less than 11, while a bank is said to be 立 strategic if it actively conducts CSR with the score above 11.. altruistic and strategic hypothesis. In particular, a bank is said to be altruistic if it. ‧ 國. 學. Besides the hypothesis we get enlightened from Baron (2001), Dam at al (2009) for three assumptions, we also try to figure out where benefits come from after banks. ‧. involve CSR more than 11. Because CSR investments lead to higher levels of. y. Nat. credibility (Lin, Chen, Chiu, & Lee, 2011), improved image or reputation (Tewari,. sit. 2011), higher employee retention (Kim and Park, 2011) and build customer. er. io. relationships (Peloza & Shang, 2011; Matute, Bravo, & Pina, 2010; Brown &. al. v i n C h11, customers areUmore willing to pay higher Once banks engage in CSR more than engchi n. Dacin, 1997), we think the benefits may come from the above mentioned reasons. price to get the services and at the same time banks can hire much more qualified workers to enhance the working efficiency and thus save costs. Perhaps, the benefits may reflect on higher profits for those banks with CSR scores in excess of 11. Since here we estimate the cost frontier, instead of the profit frontier, it’s difficult to relate profit efficiency to CSR activities. Table 5.2 CSR index cluster with Efficiency Score CSR 1-11 11-21 21-31 31-41 41-51 Efficiency Score 0.006-0.106 1 1 1 0.106-0.206 5 2 3 1 0.206-0.306 5 3 3 6 0.306-0.406 4 5 6 20. 51-61 1 5 4. 61-71 3 4 3. 71- 81- 91- 10181 91 101 111 3 2 5. 3 1 1. 2 1. Total 3 23 29 29.

(25) 0.406-0.506 0.506-0.606 0.606-0.706 0.706-0.806 0.806-0.906 0.906-1 Total. 1 1 2 9 2 15. 6 15 12 20 12. 6 14 15 31 10 1 92. 1 4 9 9 9. 75. 1 6 17 13 7 1 59. 39. 3 7 11 12 9. 2 6 6 13 8. 52. 1 3 2 12 6. 45. 2 4 6 8 6. 34. 31. 1 2 3 3 2 14. 1. 1. What’s more, the efficiency is also found different from distinct regions. In Table 5.3 presents the average efficiency across five years in different regions. Due to the missing data, there are some cells have no data filled in. However, Table 5.3 says the most stable of cost efficiency is in Asia, primarily Japan. And the most volatile cost efficiency is in North Europe. And there is no obvious trait between. 政治大. West Europe and South Europe. Highest cost efficiency appears in 2011.. 立. Table 5.3 Average cost efficiency across in different regions. ‧ 國. 2011. 2012. Standard deviation 0.62853 1.224%. 2013. 2014. 0.64560 0.61412. 0.629247. 0.61505. 0.56901 0.59465. 0.62632. 0.59331. n.a 0.67605 0.63556 0.63456. 0.77081 0.62470 0.71264 0.66455. 0.46879 0.60412 0.61189 0.58807. 0.61713 11.081% 0.51329 5.435% n.a 5.476% 0.58807. n. Ch. engchi. sit. y. 1.976%. er. io. al. 0.68723 0.57055 0.74605 0.64252. ‧. 0.61159. Nat. Asia North America North Europe West Europe South Europe Total. 2010. 學. Regions. i n U. v. In order to test the fitness of the cost function we estimated, we calculate the cost share of labor (S1), cost share of capital (S2), and cost share of funds (S3), respectively in Table 5.4. Theoretically, the cost share of those three inputs should be positive, otherwise it is meaningless. There are 301 out of 457 samples, 66% which the cost share of labor, capital and funds are positive. The results describe that the cost of funds accounts 43.17% of total costs, and cost of labor is 31.73% of total cost. However, the cost of capital is the least of three inputs. Thus, here we provide the insights for banks to reconsider the input price of funds which contributes over 40% to total costs when running a bank. Nonetheless, since banks run by loans lending out and deposits saving in, it’s reasonable that the majority 21. 24 62 84 130 69 4 457.

(26) costs come from funds. What we have to notice is that are those expenses worthy to make enough profits. Table 5.4 Cost share of labor (S1), capital (S2), and funds (S3) S1a S2b S3c 31.73% 25.10% 43.17% a W1X1/TC b W2X2/TC C W3X3/TC. Recall that SE < (>) 1 means decreasing (increasing) returns to scale. However, as the time passes, the value of SE increases and achieves increasing returns to scale in 2014. From table 9, we can tell that the current production scale is closet to optimal When it comes to the standard deviation of five years,. 政治大 years, whereas each year has立 the mild volatile of estimated economies of scale.. the volatility of estimated economies of scale is not too volatile across five. SE Standard deviation. 0.0673 0.1814. 0.4468 0.1739. 0.6481 0.1847. 0.8566 0.1539. n. er. io. sit. y. Nat. al. Ch. engchi. 22. 2014. Total. 1.0515 0.1674. 0.6141 0.3750. 2013. ‧. ‧ 國. Table 5.3 Average Economies of Scale over Time 2010 2011 2012. 學. The phenomenon may be articulated by the heterogeneity of the sample banks.. i n U. v.

(27) 6. Conclusion. This paper attempts to examine the effect of corporate social responsibility on efficiency by using the translog cost function. As the prevalence of CSR, there are many existing literatures reviewing the effect of CSR on financial performance. However, the lack of study regarding the correlation of CSR with efficiency gives us the opportunity to conduct the research. In the study, we use stochastic frontier approach to estimate a cost function in order to test the efficiency of banks that are engaging in CSR with different extent. The results we get from the empirical study give us some perspectives on CSR which are distinct from previous study. Firstly, CSR is not linearly correlated with efficiency.. 治政大 we add the squared index. In attempt to analyze this paradoxical phenomenon, 立 term of CSR since the effect on efficiency might not be always linear. As we do Instead, it’s curvilinear relation to efficiency term which means the higher of CSR. ‧ 國. 學. partial derivative of the estimated cost function with respect to the term of CSR, we obtain the turning point at 11. This implies that banks would be benefited from. ‧. the involvement of CSR only when their CSR scores exceed 11. Since the engagement of CRS takes time to implement, long-term engagement of CSR does. Nat. sit. y. help banks to boost cost efficiency. The consequence is as same as the research. er. io. stated in Barnett and Salomon (2006).. When it comes to motive triggers, compared to Baron (2001) and Dam et al. n. al. Ch. i n U. v. (2009), our results fail to support the greenwashing hypothesis, but partially support. engchi. the altruistic and strategic hypotheses. In particular, a bank is said to be altruistic if it engages CSR activities with the score less than 11, while a bank is said to be strategic if it actively conduct CSR with the score above 11. Nonetheless, this paper sheds light on cost efficiency, it has its own limits. Since some of the effect of CSR will be reflected on profits due to stakeholder theory. This is the direction or field we and others can further endeavor in.. 23.

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(32) 8. Appendix. Appendix 1 題目. -. General. Strategic. Dual use military General or civilian Military specific Significant parts goods/services goods/services goods/services of weapons. Has not - addressed allegations. Assessment pending on allegations. Has addressed allegations. - Low. Medium. High. -. Conventional area. Major nuclear area. - No convictions. Fines in lower half. Fines in second quartile. Minor nuclear area - no. -. Non strategic parts for. 立. - Some evidence. Clear evidence. - Some exports. Major exports. 1,000 - 10,000 cubic metres. Nat. Between 5% and 10%. - Yes. Fines in top quartile. 0 0. + Advanced. Good. Intermediate Advanced overall + overall policy/system policy/system + All Some Clearly + communicates Has adopted policy policy + Exceptional. Good. + Final. Minimum. + + + +. Five or more Good policy In top 100 Less than 33% Major + improvement. Four or more Moderate policy In top 50 More than 33% Significant improvement. + Very clear. 5-8 points 50% - 75%. al. n. 1-4 points 25% - 50%. io. + 0 points + 10% - 25%. 100,000 - 1 10,000 - 100,000 million cubic cubic metres metres Between 10% Over 33% and 33%. Ch. Intermediate. Basic overall policy/system One Little or no evidence of policy Moderate Does not meet minimum One or more Basic policy In top 10. ‧. ‧ 國. Large. - Up to 5%. 1 1 1. 學. - Smaller. Under 1,000 cubic metres. 0. GRS(Global Resource Sector). Large. Over 1 million cubic metres. 9-12 points 75% - 90%. 13-16 points Over 90%. Basic. Limited. engchi. 2 - 23. - - - - 12345. 政治大. Strategic parts for Whole. - Services. -. Weapons systems or platforms. y. - Civilian. 1 1. Over 50%. sit. Between 25% and 50%. 給分. er. -. 答案. i n U. v. Little or no overall policy/system None. 1 1 1 1. - 12 2 2. 3 3. 1 1 2 2 2 2. - 23 2 3. - - - - 12345 1 1 0 1. - - 234. 1234 2345. No Little evidenc 5 4 3 2 1 0 or no e of 3210 3210 210. Weak. Inadequate. 3210. 1. 210 No indication of No policy. Minor improvement. No improvement. Clear. Some. Little or no evidence of. + Yes1 + Good. Moderate. + Clear evidence. Some evidence. Basic Little or no evidence. Limited. 3 3 1 1 No data or inadequate data. 210 210 23 2. 32100 3210. Little or no. 1 43210 210. 28.

(33) Has clear policy and procedures + Has identified + Best practice +. Has adopted a No policy policy disclosed Has not identified Meets Low impact for. 210. Appendix2.1 CSR index cluster in Year of 2010 CSR Index 1-11 11-21 21-31 31-41 41-51 Region 20 Asia 9 16 1 2 0 Australia 0 0 1 1 1 British 0 0 0 0 0 Middle East 0 1 0 0 0 Asia North America 1 4 7 6 2 North Europe 2 0 0 0 1 South Europe 0 1 1 0 0 West Europe 0 2 1 1 0 Total 5 17 26 9 6. 51-61 61-71 71-81 Total 3. 3. 0. 36. 1 0. 0 0. 0 0. 4 1. 0. 0. 0. 1. 0 2 1 0 7. 0 2 1 0 6. 0 1 0 0 1. 21 8 7 6 84. 政治大. 學. ‧ 國. 立. 10 3210. Does not meet. ‧. Appendix 2.2 CSR index cluster in Year of 2011 CSR Index 41- 51- 61- 71- 811-11 11-21 21-31 31-41 Region 51 61 71 81 91 Asia 15 5 2 5 1 4 2 Australia 1 1 1 1 British Middle East Asia 1 1 1 North 1 5 4 4 1 4 3 1 America North 2 3 1 2 Europe Other 1 South Europe 3 1 1 West Europe 2 1 2 1 1 Total 3 23 9 8 15 8 11 8. 91101. Nat. n. al. er. io. sit. y. Total. Ch. engchi. 29. i n U. 1 1. 1 1. v. 1. 34 6 2 3 24 8. 4 7. 2. 1 5 11 94.

(34) Appendix 2.3 CSR index cluster in Year of 2012 CSR Index 41- 51- 61- 71- 811-11 11-21 21-31 31-41 Region 51 61 71 81 91 Asia 13 7 3 3 3 5 1 Australia 2 3 British Middle East Asia 1 1 1 North 1 6 5 2 2 6 1 2 America North 1 2 3 1 Europe Other 1 South Europe 1 West Europe 1 1 2 1 1 Total 2 20 14 7 11 14 8 7. 學. 1. 7 1 5 7. 3. 91101 1 1. 1. n. engchi U. 25. y. 8. v ni. Appendix 2.5 CSR index cluster in Year of 2014 CSR Index 41- 51- 61- 71- 811-11 11-21 21-31 31-41 Region 51 61 71 81 91 Asia 11 7 4 3 2 4 3 Australia 2 2 Middle East Asia 1 1 1 North America 4 5 3 3 6 2 North 2 2 2 1 Europe South Europe 1 3 1 West Europe 1 1 2 1 總計 2 15 13 9 12 10 10 10. 30. 34 6 2 3. 2. er. io. Ch. 1 2 11 93. Total. sit. Nat. al. 35 6 2 3 26. ‧. ‧ 國. Total 1 2. 政治大. Appendix 2.4 CSR index cluster in Year of 2013 CSR Index 41- 51- 61- 71- 811-11 11-21 21-31 31-41 Region 51 61 71 81 91 Asia 12 6 4 3 2 5 2 Australia 2 3 British Middle East Asia 1 1 1 North 1 4 6 1 5 3 2 1 America North 2 5 1 Europe South Europe 2 1 1 2 West Europe 1 1 2 2 Total 3 17 13 6 15 13 10 8. 立. 91101. 1 3 7. 2 4. 91101. 7 11 96. Total 34 6 3 24. 2 1. 7 1 4 8. 1 1. 6 10 90.

(35) Appendix 3 Parameter estimates Costant -3.10E+00 ln(Y1) 1.21E+00 ln(Y2) 5.85E-03 ln(Y3) 5.09E-02 0.5ln(Y1)ln(Y1) 4.80E-02 0.5ln(Y2)ln(Y2) -4.50E-03 0.5ln(Y3)ln(Y3) -1.10E-02 ln(W2/W1) 1.86E+00 ln(W3/W1) 2.43E-01 0.5ln(W2/W1)ln(W2/W1) -1.01E-02 0.5ln(W3/W1)ln(W3/W1) -1.84E-03 ln(Y1)ln(W2/W1) -2.04E-01 ln(Y1)ln(W3/W1) 2.11E-02 ln(Y2)ln(W2/W1) -7.39E-03 ln(Y2)ln(W3/W1) -6.48E-03 ln(Y3)ln(W2/W1) -3.74E-02. Standard errors -9.36E-01 1.69E-01 1.24E-01 1.17E-01 6.86E-03 1.24E-02 1.23E-02 1.46E-01 1.34E-01 2.98E-03 1.55E-03 2.50E-02 2.39E-02 1.75E-02 1.64E-02 1.90E-02. Variable. 政治大. -0.27E+03. 學. Standard errors 1.76E-02 2.26E-01 4.43E-02 2.47E-02 2.00E-02 1.86E-02 1.83E-02 1.60E-02 1.03E+00 1.61E+00 1.88E+00 6.79E-04 1.73E-01 7.10E-03 6.27E-05 3.83E-02 9.92E-02. Appendix 4 CSR, Efficiency combined with regions 1-11 11-21 21-31 31-41 41-51 51-61 61-71 71-81 81-91 91-101 101-111. al. n. 1 1. io. 1 5 1. 2. 2. 3 1. Ch. 1 1 1 1. y. 1 1. sit. 1. 1 1. engchi U. er. Nat. 0.0061-0.106 Asia North America 0.106-0.206 Asia Australia British North America North Europe South Europe West Europe 0.206-0.306 Asia North America North Europe West Europe 0.3061-0.406 Asia Australia. ‧. CSR. ‧ 國. 立. Log-likelohood. Parameter estimates ln(Y3)ln(W3/W1) 4.22E-02 t -1.12E-01 0.5t^2 -4.53E-02 t*ln(Y1) 1.26E-02 t*ln(Y2) 4.19E-02 t*ln(Y3) 6.91E-02 t*ln(W2/W1) -5.31E-02 t*ln(W3/W1) -2.85E-02 Constant -1.46E+00 ETA -4.82E+00 NPL -3.21E+00 Loan/Asset -1.24E-03 ROA -1.10E-01 CSR -3.18E-04 CSR 3.60E-05 GDP growth rate 9.27E-02 ln(real GDP per 1.83E-01 capita) Variable. v ni 3 1 1. 3 3. 1. 3. 2. 1. 2. 1 2 5 2 3. 4 2. 3 1 2. 1 3 2 1. 6 3 2 1 6 2. 5 2 1 31. 5 1 3 1 4 2. 4 1. 2 1 1. 2 1. 3 3. 5 4. 1 1 1. 1. Total 3 1 2 23 8 1 1 7 1 2 3 29 11 12 4 2 29 13 1.

(36) 1. 1. 1. 1. 2. 1. 1 1. 1 1. 1 2 1. 1 1. 1 1. 3 2. 1. 立1. 5 12 5 1. 4 1. 9 5. 17 9 3. 1 20 6 1. 2 C h 2 9 7. 3. 4 2. 3 3 10. 2. 2. 2. 1 11 4. 2 6 1. 1 13 3. 1 4 1. 2. 2 1. 2 1. 3 6 2. 3. 3 1 2 1 12 5. v n2 i. 2 13 5. 4. 2. 8 4. 3. 1. 12 11. 2. 1 1. 5 2. 9 5. 7 3 32. 7 2 1 4 24 7 4 5 2 3 3 62 22 2 15 6 2 3 12 84 31 9 1 2. 3 7 2 3 1 12 4. 1. 1. engchi U. 5 9. 1. 1. al. 3 2. 政 2 治1 大. n. 2 31 7 3 1. 6 1 1. 1. io. 6. 7 4. er. 2 1 15 3 3 1. 9 4 1. 2 1 2. 6 4. ‧. 2 1 1. 14 2 1 8. 1 4 3. 1. 學. 1. 1 1 15 5. ‧ 國. 1. 1. 1. 1 1. 1. 2 1. y. 6 1 2 2. 2 1. sit. 1. 1 6 1 2 1. Nat. Middle East Asia North America North Europe South Europe West Europe 0.4061-0.506 Asia Australia North America North Europe South Europe West Europe 0.506-0.606 Asia British North America North Europe Other South Europe West Europe 0.606-0.706 Asia Australia British Middle East Asia North America North Europe South Europe West Europe 0.706-0.806 Asia Australia British Middle East Asia North America North Europe South Europe West Europe 0.806-0.906 Asia Australia. 1. 23 7 2 9 130 52 7 1 8. 4 1 2 9 4. 2 4 2 8 4. 1 1. 6 4. 3 6 3. 1. 30 8 13 11 69 27 4.

(37) 1. 1. 1. 2. 1. 3. 1 5. 2 1. 2. 1. 3. 2 3 1. 2. 1. 1. 1 1. 3. 3 1 1. 92. 75. 39. 立. 2. 1. 1 1 14. 59. 52. 45. 34. 政治大. 學 ‧. io. sit. y. Nat. n. al. er. 15. 1. ‧ 國. British Middle East Asia North America North Europe South Europe West Europe 0.906-1.0 Asia Australia North America Total. Ch. engchi. 33. i n U. v. 31. 1. 18 8 3 5 4 1 2 1 457.

(38) ( ). 金融學系研究所. 國立政治大學. ( ). 碩博士論文. n. 106 年 7 月 34. y. sit er. -. io. 張穎中撰. ‧. Nat. al. 政治大. 學. ‧ 國. 立. 企業社會責任與成本效率之關係隨 Ch 機 e成n g c h i 本邊界法. i n U. v.

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