Do Depositors Respond to Banks’ Social Performance?

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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Author(s)

Detail(s)

Original languageEnglish
Pages (from-to)89–114
Journal / PublicationThe Accounting Review
Volume98
Issue number4
Publication statusPublished - Jul 2023

Abstract

We study whether and how banks’ social performance affects depositors, who hold demandable debt with pervasive government protection. Exploiting the regulatory releases of bank performance ratings for community development and a difference-in-differences design, we find a decline in deposit growth after the release of negative bank social performance. In addition, deposits that are impacted by the negative events flow to nearby banks with high social performance. Further analyses find that the results hold similarly among insured and uninsured deposits and are primarily driven by banks with a large proportion of deposits from high-trust and pro-social counties, and in poor information environments. Overall, we contribute to the literature by documenting the importance of social performance to nonshareholder stakeholders and providing implications for bank stability. © 2023 American Accounting Association. All rights reserved.

Research Area(s)

  • bank social performance, deposit flows, trust

Citation Format(s)

Do Depositors Respond to Banks’ Social Performance? / Chen, Yi-Chun; Hung, Mingyi; Wang, Lynn Linghuan.
In: The Accounting Review, Vol. 98, No. 4, 07.2023, p. 89–114.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review