Bank lending cyclicality and ESG activities: Global evidence

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

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.

Citation

Abdelsalam, O., Azmi, W., Disli, M., & Kowsalya, V. (2023). Bank lending cyclicality and ESG activities: Global evidence. Finance Research Letters, 58(Part D), Article 104541. https://doi.org/10.1016/j.frl.2023.104541

• Journal Article Type: Article
• Acceptance Date: Sep 30, 2023
• Online Publication Date: Nov 7, 2023
• Publication Date: 2023-12
• Deposit Date: Nov 15, 2023
• Publicly Available Date: Nov 8, 2024
• Journal: Finance Research Letters
• Print ISSN: 1544-6123
• Electronic ISSN: 1544-6131
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 58
• Issue: Part D
• Article Number: 104541
• DOI: https://doi.org/10.1016/j.frl.2023.104541
• Public URL: https://durham-repository.worktribe.com/output/1904661