Social Responsibility And Bank Efficiency

Banking industry plays a valuable role in our national economy, and has the functions of resource allocation, risk management and so on. Generally speaking, taking social responsibility helps to improve the efficiency of commercial banks and vice versa. Therefore, it’s of great significance to study the relationship between the social responsibility and operating efficiency in commercial banks for better development.First of all, this paper derives an infinitely repeated game model based on the stakeholder theory and transaction cost theory to analyze the intrinsic motivation of banks taking corporate social responsibility. Secondly, this paper builds a social responsibility evaluation system of commercial banks including management performance, economic performance and social performance, which refers to the report of China Banking Association. Thirdly, this paper measures the cost efficiency of 16 listed commercial banks during 2007-2013 with the method of Stochastic Frontier Analysis(SFA). Finally, the empirical results of the relationship between the social responsibility and operating efficiency in commercial banks shows that taking social responsibility can lead to higher operating efficiency after controlling other variables such as scale, ownership property and corporate governance.This paper provides new theoretical and empirical evidence for commercial banks to establish a human-oriented management concept and to maximize the social welfare. Accordingly, it provided some related policy proposal for the development of commercial banks.