Corporate Social Responsibility and Bank Performance: The Moderating Role of CEO Tenure in Vietnam

Banks have increasingly been aware of their responsibility to adhere to the sustainable development requirements. It is important to examine the impact of CSR activities on the performance of commercial banks in Vietnam, a developing country where the banking system plays a significant intermediary role and there is a need to enhance the transparency in the way they operate. The extant studies are limited on the effect of CSR on bank performance in Vietnam, and there have been no studies on the moderating effect of CEO tenure on this link. The study utilizes a sample of 30 commercial banks from 2010 to 2022, and finds that CSR can pose different impacts, depending on the aspect. Generally, CSR in terms of partners and suppliers tends to be worthwhile investments, while CSR on employees, communities and customers is less valuable. The results for other types of CSR are not robust. We also find that CEO tenure consistently moderates the effectiveness of CSR favorably. Even though CSR could exert different effects depending on the aspect, when it is combined with managerial tenure, most appear to exert a favorable effect on bank performance, highlighting the value of the seniority of CEOs.