Social Corporate Responsibility in Transition Countries.

Abstract

This article explores the determinants of corporate social responsibilities (CSR) in the banking sector of the transition countries of Central and Eastern Europe (CEE), as well as those of the former Soviet Union (FSU. Our panel fixed-logit results for 237 banks, covering the period 2000–2012,show that while financial performance is not associated with CSR, larger banks are more likely to engage in CSR. Additionally,a government’s effectiveness and its regulatory quality increase the likelihood that the banks will engage in social activities. A range of possible approaches that governments can take to encourage social activities in the banking sector of transition countries are provided. Overall, our results are consistent with the theory that the necessary conditions must be in place to support CSR, which seem to be absent in the countries under investigation