The relationship between corporate social responsibility financial performance, financial inclusion and financial stability in developing countries: An empirical analysis

This study investigates the influence of corporate social responsibility (CSR) on financial performance, financial inclusion, and financial stability in the banking sector, using annual data from 30 financial institutions in Tunisia over the period 2007-2018. Employing a dynamic panel Generalized Method of Moments (GMM) estimation technique, the study accounts for endogeneity and dynamic relationships between variables. The findings reveal that CSR, alongside institutional factors such as age and size, positively impacts financial performance, inclusion, and stability. Conversely, high leverage adversely affects financial inclusion and stability, while asset tangibility is negatively associated with financial inclusion. These results underscore the strategic importance of CSR as a mechanism for enhancing financial sustainability and inclusiveness in emerging markets. The study contributes to the literature by offering empirical evidence on the interconnectedness of CSR and financial metrics in the context of the Tunisian banking sector, providing practical insights for policymakers and financial institutions.