Bank lending cyclicality and ESG activities: Global evidence

Omneya Abdelsalam; Wajahat Azmi; Mustafa Disli; V. Kowsalya

doi:10.1016/j.frl.2023.104541

Bank lending cyclicality and ESG activities: Global evidence

Omneya Abdelsalam^*, Wajahat Azmi, Mustafa Disli, V. Kowsalya

^*Corresponding author for this work

Islamic Studies – Academic

Research output: Contribution to journal › Article › peer-review

1 Citation (Scopus)

Abstract

This paper examines how banks' lending behavior is influenced by their ESG activities. To achieve this objective, we use a global sample of 277 banks for the period 2012–2019. We find that banks that engage in ESGs are less prone to procyclical lending than those that do not. In the case of environmental activities, the results are more pronounced. In essence, we demonstrate that ESG activities, and in particular environmental activities, can serve as indicators to identify banks that stabilize credit during difficult times. This study has implications for policymakers as well as other stakeholders.

Original language	English
Article number	104541
Journal	Finance Research Letters
Volume	58
DOIs	https://doi.org/10.1016/j.frl.2023.104541
Publication status	Published - Dec 2023

Keywords

ESG activities
Lending behavior

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10.1016/j.frl.2023.104541

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title = "Bank lending cyclicality and ESG activities: Global evidence",

abstract = "This paper examines how banks' lending behavior is influenced by their ESG activities. To achieve this objective, we use a global sample of 277 banks for the period 2012–2019. We find that banks that engage in ESGs are less prone to procyclical lending than those that do not. In the case of environmental activities, the results are more pronounced. In essence, we demonstrate that ESG activities, and in particular environmental activities, can serve as indicators to identify banks that stabilize credit during difficult times. This study has implications for policymakers as well as other stakeholders.",

keywords = "ESG activities, Lending behavior",

author = "Omneya Abdelsalam and Wajahat Azmi and Mustafa Disli and V. Kowsalya",

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AU - Abdelsalam, Omneya

AU - Azmi, Wajahat

AU - Disli, Mustafa

AU - Kowsalya, V.

PY - 2023/12

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N2 - This paper examines how banks' lending behavior is influenced by their ESG activities. To achieve this objective, we use a global sample of 277 banks for the period 2012–2019. We find that banks that engage in ESGs are less prone to procyclical lending than those that do not. In the case of environmental activities, the results are more pronounced. In essence, we demonstrate that ESG activities, and in particular environmental activities, can serve as indicators to identify banks that stabilize credit during difficult times. This study has implications for policymakers as well as other stakeholders.

AB - This paper examines how banks' lending behavior is influenced by their ESG activities. To achieve this objective, we use a global sample of 277 banks for the period 2012–2019. We find that banks that engage in ESGs are less prone to procyclical lending than those that do not. In the case of environmental activities, the results are more pronounced. In essence, we demonstrate that ESG activities, and in particular environmental activities, can serve as indicators to identify banks that stabilize credit during difficult times. This study has implications for policymakers as well as other stakeholders.

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Bank lending cyclicality and ESG activities: Global evidence

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Keywords

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