Corporate Social Responsibility, Corporate Governance, and Banking Performance in the CEMAC Region

Abstract

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This paper examines how corporate governance and corporate social responsibility affect banking performance in the Central African Economic and Monetary Community (CEMAC) region. The sample is obtained from the Worldwide Governance and the World Bank Environment Social Governance (ESG) database from 2003 to 2018. It employs the Z-score to proxy the corporate social responsibility factors such as labour force participation rate, population density, and renewable energy. The results reveal that a better corporate social responsibility and corporate governance environment could improve banking performance, thereby maximising shareholders’ wealth in the CEMAC region. The results support a similar suggestion by the International Monetary Fund (IMF) which asserts that the CEMAC region must strengthen its code of good governance and transparency in public resources management. Therefore, implementing corporate social responsibility strategies and improving corporate governance practices may be crucial in attracting and improving direct foreign investment for a strong capital market, restoring investors’ confidence in the CEMAC region.

Keywords: Corporate Social Responsibility, Corporate Governance, Banking Performance, The Central African Economic and Monetary Community

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