Do corporate social responsibility and bank performance matter for financial inclusion in Vietnam?
| DOI | https://doi.org/10.1108/JABS-11-2020-0462 |
| Published date | 11 August 2021 |
| Date | 11 August 2021 |
| Pages | 639-651 |
| Subject Matter | Strategy,International business |
| Author | Duc Hong Vo,Ngoc Phu Tran,Hien Thi-Thu Hoang,Loan Thi-Hong Van |
Do corporate social responsibility and
bank performance matter for financial
inclusion in Vietnam?
Duc Hong Vo, Ngoc Phu Tran, Hien Thi-Thu Hoang and Loan Thi-Hong Van
Abstract
Purpose –This paper aims to provide empirical evidence and policy implications on the linkbetween
corporate social responsibility, financial inclusionand financial performance of the banking sector in an
emergingmarket.
Design/methodology/approach –This study uses data collected from the annual reports of 13 listed
banks in Vietnam from 2011 to 2019. CSR is proxied by the ratiobetween charitable contributions and
bank profits. Besides, thisstudy uses the number of branches and the number of agents as the proxies
for a level of financialinclusion. The generalized methodof moments and various tests are used to ensure
the robustnessof the findings.
Findings –Findings in this study indicatethat CSR activities do matter, and they contribute positively to
financial inclusion. In addition, the bank’s size is also associated with an increased level of financial
inclusion.
Practical implications –Findings from this study provide important implications for bank executives
and policymakers in Vietnam in managingand extending CSR activities with the view of supporting and
enhancingfinancial inclusion.
Originality/value –To the best of the author’sknowledge, this is the first empirical studyin the context of
the banking sector in Vietnam in which the impact of CSR activities and financial performance of the
bankingsector on financial inclusion at thebank level is examined.
Keywords Vietnam, Corporate social responsibility, Bank performance, Banking sector,
Financial inclusion
Paper type Research paper
1. Introduction
In the past three decades, Vietnam has made a greateffort in providing financial services to
firms and individuals, especially to small and medium enterprises (SMEs) and the
underprivileged groups of people in the community. With increasingly fierce competition,
banks have made changes to improve service accessibility for customers and firms.
Extending a network of providing financial services is generally considered as financial
inclusion in which firms and individuals are entirely inclusive. Financial inclusion is defined
as a process in which financial services are provided widely and conveniently to clients. In
this process, customers can easily access financial resources to promote an effective
distribution and use of corporate resources, contributing to the financial stability of the
banking system and the economy (Han and Melecky, 2013).The Global Findex data (World
Bank, 2020) shows that the proportion of adult people with a separate bank account in
Vietnam in 2014 was 30.9%, which is much lower than the world average of 60.7%. In the
Association of Southeast AsianNations, the coverage of financial inclusion in Vietnam is well
below other countries, such as Singapore, Thailand, Indonesia and Malaysia. The gross
domestic product of Vietnam is now ranked fourth in the region in 2020 (IMF, 2020). The
Duc Hong Vo, Ngoc Phu
Tran and Hien Thi-Thu
Hoang are based at the
CBER –Research Center in
Business, Economics and
Resources, Ho Chi Minh
City Open University, Ho
Chi Minh City, Vietnam.
Loan Thi-Hong Van is
based at the School of
Advanced Study, Ho Chi
Minh City Open University,
Ho Chi Minh City, Vietnam.
Received 29 November 2020
Revised 16 April 2021
Accepted 18 June 2021
Funding: This research is
funded by Vietnam National
Foundation for Science and
Technology Development
(NAFOSTED) under grant
number 502.01-2019.18.
DOI 10.1108/JABS-11-2020-0462 VOL. 16 NO. 4 2022, pp. 639-651, ©Emerald Publishing Limited, ISSN 1558-7894 jJOURNAL OF ASIA BUSINESS STUDIES jPAGE 639
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