The study focus on joint-stock commercial banks operating at Mekong Delta. Secondary data was collected from 2011-2018. Primary data is collected by in-depth interviews of experts working in banking industry and interviewing by questionnaires from January 2018 to August 2018. The object of this study is the relationship between corporate social responsibility, brand equity and financial performance of commercial banks. Interviewers are customers, employees and managers who are currently working in joint-stock commercial banks.
MINISTRY OF EDUCATION AND TRAINING CAN THO UNIVERSITY SUMMARY OF THE THESIS Major: Business administration Code: 62340102 LE PHUOC HUONG THE RELATIONSHIP BETWEEN CORPORATE SOCIAL RESPONSIBILITY, BRAND EQUITY AND FINANCIAL PERFORMANCE OF JOINT-STOCK COMMERCIAL BANKS IN MEKONG DELTA Can Tho, 2020 THE THESIS ARE COMPLETED AT CAN THO UNIVERSITY Supervisors: - Luu Tien Thuan, Ph.D - Huynh Quang Linh, Ph.D The dissertation is defended in front of the doctoral thesis committee at university level Meeting at: At hour day month year PhD dissertation reviewer 1: PhD dissertation reviewer 2: The dissertation can be found at the library: Learning Resource Center, Can Tho University Vietnam National Library LIST OF PUBLISHED ARTICLES Le Phuoc Huong, Luu Tien Thuan 2017 Corporate social responsibility - a literature review and future research directions Can Tho University Journal of Science Vol 50 19-33 Le Phuoc Huong, Luu Tien Thuan 2017 Corporate social responsibility of joint stock commercial banks: a study of some dimensions Journal Economics - Technology Bình Dương University No19 83-94 Le Phuoc Huong, Luu Tien Thuan 2017 Corporate social responsibility – A literature review and future research directions UHD-CTU Annual economics and business conference, 13-14/1/2017, Can Tho University Le Phuoc Huong, Luu Tien Thuan 2018 Corporate Social Responsibility in Banking Banking Technology Review 148 48-67 Le Phuoc Huong, Luu Tien Thuan 2018 The effects of Corporate social responsibility on brand equity and financial performance: The case of commercial banks in Mekong Delta Proceedings of National Scientific Workshop: Economic and business development in Vietnam in the context of globalization Can Tho University 414 – 437 Le Phuoc Huong, Luu Tien Thuan and Nguyen Hai Trung 2018 Impacts of social responsibilities to the awareness of bank employees in the Mekong Delta Review of Regional Sustainable Development 8/3 105-115 Le Phuoc Huong, Luu Tien Thuan and Hua Ngoc Le 2019 Corporate social responsibility and customer loyalty: case of joint-stock commercial banks Journal Economics - Technology Bình Dương University No 26 46-56 Le Phuoc Huong, Luu Tien Thuan 2019 The impact of corporate social responsibility and brand equity on financial performance: The case of banking employees Journal of Science Ho Chi Minh City Open University Vol 14 41-53 Le Phuoc Huong, Luu Tien Thuan 2019 The relationship between corporate social responsibility, brand equity and financial performance: The case of commercial banks in Mekong Delta Can Tho University Journal of Science Vol 55 85-94 10 Le Phuoc Huong, Luu Tien Thuan 2019 The impact of corporate social responsibility on financial performance: Case of Vietnam joint stock commercial banks Banking Science & Training Review Vol 211 12-24 CHAPTER 1: INTRODUCTION 1.1 BACKGROUND Banking institutions have played an important role in connecting the economy and pioneering the implementation of global trends such as corporate social responsibility (CSR) Commercial banks are trying to exploit the positive aspects of CSR’s activities to maximize the benefits associated with increasing brand equity and financial performance (Saeidi et al., 2015) Some managers believe that CSR is simply charity work while CSR includes internal factors, other managers think that barrier of implementing CSR’s practices is due to lack of human resources, financial resources and implementation techniques (Nguyen Dinh Tai, 2010) According to Sprinkle and Maines (2010), any organizations must pay attention to its impacts on environment and social security Although understanding social needs, banks or enterprises can hardly give up their goal of maximizing profits (Sprinkle & Maines, 2010) Therefore, the harmony between CSR’s activities and financial performance, that is good for society and benefits for organizations are absolutely legitimate and necessary According to Fatma et al (2016a), each industry needs reliable measurement tools for evaluating stakeholders’ perpection In addition, few CSR’s studies in the Asian context (Chapple & Moon, 2005; Fatma et al., 2014) Compared to other industries, banking industry is effected by brand, reputations and negative information about reputation that will lead to negative actions of stakeholders (Thompson & Cowton, 2004) Retail banks spent a lot of money on CSR’s programs to strengthen brands (McDonald & Rundle-Thiele, 2008) The importance of brand equity in the service sectors is crucial because their products and services are intangible, so the trust of stakeholders is needed (Pérez et al., 2013) In the context of restructuring Vietnamese banking system, in order to enhancing brand equity and financial performance through CSR’s programs of JSBs in Mekong Delta, the issues to be addressed are measuring the impacts of CSR’s perception of customers, employees and managers From the above reasons, the study "The relationship between corporate social responsibility, brand equity and financial performance of joint-stock commercial banks in Mekong Delta" is a controversial topic 1.2 THE PURPOSE OF THIS STUDY (1) To measure the impact of CSR’s perception on financial performance of joint stock commercial banks (2) To measure the impact of CSR’s perception on brand equity of joint stock commercial banks (3) To measure the impact of CSR’s perception and brand equity on financial performance of joint stck commercial banks (4) To propose some managerial implications for banking managers to conduct effectively CSR’s practices for enhancing brand equity and financial performance 1.3 SCOPE OF STUDY The study focus on joint-stock commercial banks operating at Mekong Delta Secondary data was collected from 2011-2018 Primary data is collected by in-depth interviews of experts working in banking industry and interviewing by questionnaires from January 2018 to August 2018 The object of this study is the relationship between corporate social responsibility, brand equity and financial performance of commercial banks Interviewers are customers, employees and managers who are currently working in joint-stock commercial banks 1.4 THEORETICAL AND PRACTICAL CONTRIBUTIONS Theoretical Contributions The findings of this research contribute to the field of CSR, which are meaningful for researchers, lecturers and managers, but also propose directions for further researches on the interaction between CSR, brand equity and financial performance In particular, according to the literature review, the author has not found any researches on the impact of five perceived CSR’s dimensions and brand equity in two aspects: customer-based brand equity and employee-based brand equity on financial performance in banking industry Therefore, this study contributes to CSR perception and its academic marketing outcomes in several ways: (1) contributing to supplement scientific knowledge to the field of marketing and management, thereby enriching the sources of references in the field of marketing and management (2) constructing and testing to the CSR’s scale for banking industry, customer-based brand equity and employee-based brand equity, after verifying this reliability can be used for the future research In addition, this study is one of the pioneering studies that determine the impact of CSR’s dimensions, brand equity on financial performance by primary data and quantitative research (3) The findings propose many orientations for further studies to construct more tests to generalize deeply about the relationships of perceived CSR, brand equity and financial performance in Vietnamese banking industry, and trying to apply the theoretical framework In addition, the process and methodology are considered as a reference for future researches Practical contributions The research results have practical contributions for banking industry in Mekong Delta as well as Vietnam as follows: (1) Provide a scientific basis for banking managers to decide on the implementation of CSR’s activities and allocating resources on each dimensions to improve financial performance and enhance brand equity for gaining competitive advantage (2) Provide evidences to show the difference between staffs and managers, male and female customers in each CSR’s dimension So that, banking managers can apply suitable strategies for each group (3) Testing customer-based brand equity and employee-based brand equity and (4) The findings of this research and managerial implications as a meaningful reference for banking industry 1.5 THE STRUCTURE OF THESIS The thesis consists of 151 pages with chapters as follows: Introduction; Literature review and research model; Research design; Results and discussion; Conclusions and managerial implications CHAPTER 2: LITERATURE REVIEW AND RESEARCH MODEL 2.1 STAKEHOLDER THEORY The term "stakeholders" first appeared in 1963 to present business ethics (Freeman, 1984) Stakeholders are participants, influencing or benefiting from CSR’s activities including shareholders/owners, community, customers, partners and staffs CSR’s practices should bring the highest benefits to stakeholders Wang et al (2015) confirms the theory of fulcrum to draw conclusions about CSR - financial performance relationship There are many theories used in CSR studies, but stakeholder theory is still the most reasonable theory and popular choice According to stakeholder theory, organizations aim to balance the expectations of all stakeholder groups through their activities Managers should consider and maintain the expectations of all stakeholder groups when they make decisions to disclosure relevant CSR’s information Inheriting previous studies, this thesis also applies stakeholder theory to approach CSR according to the dimensions of customers, employees, community, shareholders, legal and ethical requirement According to Retolaza et al (2009), the stakeholder theory is the most relevant theory to study CSR in banking industry 2.2 CORPORATE SOCIAL RESPONSIBILITY The CSR’s definition of the European Commission (2001) is that enterprises should integrate social and environmental concerns into their business; interact with stakeholders on a voluntary basis CSR is a broad concept and is expressed in the view of individual researchers, depend on the context of the study (Dahlsrud, 2008) Researching the relationship between CSR, brand equity and financial performance, this thesis uses the CSR’s definition of European Commission (2001) and Carroll (1979) This concept covers the voluntary, social aspect, environmental aspect, economic aspect, and stakeholders According to Dahlsrud (2008), this CSR’s definition has the highest Google search frequency among the 37 definitions studied Currently, there is no legal document related to CSR in Vietnamese banking industry 2.3 BRAND EQUITY Customer-based brand equity: There are many different views on brand equity model, but Aaker’s model (1991) is often cited by most academic researchers (Atilgan et al., 2005) According to Kayaman & Arasli (2007), the brand equity components are closely related, in which the higher perceived quality leads to the better brand awareness and increased brand loyalty Yoo & Donthu (2001) was implemented to develop a scale for evaluating customer-based brand equity The results have developed and validated multi-dimensional customer-based brand equity scales drawn from the concepts of Aaker and Keller’s brand equity Multi-step psychological tests proved that new brand equity scale is reliable, valid, analytical and generalized across many cultures and product categories including brand loyalty, perceived quality and brand image Similarly, in this study, the author contacted interviewers at branches, should ignore brand awareness, customer-based brand equity including brand loyalty, perceived quality and brand image Employee-based brand equity: be measured through some dimensions are brand citizenship behaviour, employee satisfaction, employee intention to stay and positive employee word-of-mouth (King & Grace, 2010) Employee satisfaction is considered an important dimension of employee-based brand equity and is related to employee engagement (Boselie & van der Wiele, 2002) and active communication (Shinnar et al., 2004) Brand citizenship behavior is the behavior of employees according to standards consistent with the brand equity (Burmann & Zeplin, 2005) Employee satisfaction is the level of employee satisfaction received from their job and is the result of doing what they want and the value of that job (King & Grace, 2010) The employee intention to stay is the future intention of employees to continue their current work (Good et al., 1996) Positive employee word-of-mouth is the level at which an employee is willing to say positive things about the business and is ready to introduce the business to others (King & Grace, 2010) 2.4 FINANCIAL PERFORMANCE Financial performance can be assessed by many criterias In this study, the author uses the ratio of return on total assets (ROA) and return on equity (ROE) to measure financial performance of joint-stock commercial banks because two ratios are popular in studies such as Boaventura et al (2012), Robin et al (2018) In addition, two ratios are widely publicized by joint-stock commercial banks through audited financial statements to confirm the truthfulness and reasonableness Moreover, ROE and ROA measures the income ratio, reflecting the actual situation of banks in an accounting period, in order to see more clearly the relationship between CSR, brand equity and financial performance 2.5 LITERATURE REVIEW Chomvilailuk & Butcher (2010) tested the positive impact of CSR on brand preference and perceived quality Thailand banking industry Banking industry is considered to be the most competitive industry in Brazil, Scharf & Fernandes (2013) using secondary data can show the relationship between CSR and brand awareness Mirabi et al (2014) conducted research with Iranian banking industry context, Fatma et al (2015) with the context of Indian banks, Khan et al (2015) conducting research in the context of Pakistan banks In summary, CSR’s perception in banking industry of two internal and external entities gives different results on the impact of CSR on brand equity Experimental studies have demonstrated a causal relationship between CSR and bank performance such as Wu & Chen (2013), Adegbola (2014) and Iqbal et al (2014) In the context of Pakistan banks, Malik & Nadeem (2014) argued that banks have many limitations in implementing CSR’s activities, although CSR positively impact on financial performance Understanding the relationship between CSR and financial performance is really valuable for managers, shareholders and other stakeholders to help them making decisions on allocating resources, promoting CSR’s activities (Simpson & Kohers, 2002) However, the perceived of CSR is ambiguous and adapting to CSR is limited (Truong, 2016) After literature review, I have not found any research to study the relationship between CSR, brand equity and financial performance in banking industry and some issues have not been properly concerned Some gaps in the study of CSR’s topics are as follows: (1) Previous research focused on secondary data of listed companies on the stock exchange CSR’s perception is ambiguous (2) Most of the CSR’s studies in the first period focused on developed countries (3) CSR’s research in Vietnamese banking industry has not used primary data as well as quantitative methods (4) Putting the brand equity to the intermediate component in CSR- financial performance relationship has not found any research done, especially the banking sector (5) Factors that are considered to have an impact on measuring brand equity from the perception of customers and employees is related to CSR So putting brand equity in the relationship between CSR and financial performance has special significance in banking industry 2.6 HYPOTHESIS DEVELOPMENT CSR and financial performance One of the most important goals of enterprises is to consider how the impact of CSR investment on financial performance (Pätäri et al., 2014) Friedman (1970) which argues that corporate responsibility is to add value to shareholders, regardless of social issues, while Narver (1971) argues that moderate businesses must maximize shareholders' benefits and should take voluntary actions for social issues, especially pollution According to Lee (2008), CSR’s studies have shifted from macro-level research to micro-level (enterprise) and shifted to studying the impact of CSR on profits Literature review showed that there are three groups of discussing the CSR - financial performance relationship including positive relationship, negative relationship and no relationship The second group based on stakeholder theory of Freeman (1984) argues that there exists a positive relationship between CSR and financial performance CSR will improve company value through cost savings, strengthening reputation However, a positive relationship is evident with some specific conditions According to Crifo et al (2016), many CSR’s dimensions combined together will positively impact on financial performance rather than approach only one dimension The positive direct relationship between CSR and financial performance is demonstrated by many empirical studies such as Kang et al (2010), Babalola (2012), Chetty et al (2015) Lee et al (2013) researched employees' awareness of CSR’s activities that showed that CSR’s perception has a positive impact on company performance CSR and brand equity Studying the CSR - brand equity relationship often focuses on customer to operate managerial strategies Polonsky & Jevons (2009) believed that there is a relationship between CSR and brand equity, so managers should connect CSR’s activities and branding activities Empirical researches provided evidences of positive effects of CSR on components of brand equity (Lai et al., 2010; Hsu, 2012) In service sector, CSR impacts on brand equity directly (He & Li, 2011) CSR used all stakeholder’s approach has a positive impact on brand equity, especially customer (Torres et al., 2012) CSR is considered as a good tool to achieve brand image, perceived quality and customer loyalty (Martínez et al., 2014; Tingchi Liu et al., 2014; Hur et al., 2014; Enock & Basavaraj, 2014; Esmaeilpour & Barjoei, 2016) In summary, there is a relationship between CSR and brand equity with different levels when studying different industries Brand equity and financial performance There is a large number of studies about the positive relationship between brand equity and firm performance in different industries For example, the brand equity positively impacts on profitability (Park & Srinivasan, 1994; Aaker, 1996; Kim et al., 2003) Moreover, Srivastava & Shocker (1991) and Shocker et al (1994) demonstrated that brand equity influences on future profits and long-term cash flows According to customer approach, the components of brand equity such as brand loyalty, perceived quality, brand image have a positive effect on financial Ident Item Uses customers’ satisfaction as an indicator to improve the csr304 product/service marketing Make an effort to know customers’ csr305 needs Shareholder dimension csr401 Tries to maximize its profits csr402 Keep a strict control over its costs Tries to ensure its survival and csr403 long-term success References et al (2008), Fatma et al (2014), Zheng et al (2014), Tingchi Liu et al (2014), Fatma & Rahman (2016) Maignan et al (1999), Maignan (2001), Mercer (2003), Crespo & del Bosque (2005), Fatma et al (2014), Fatma & Rahman (2016) Legal and ethical requirement dimension Always respects rules and Maignan et al (1999), csr501 regulations defined by law Maignan (2001), Mercer Is concerned with fulfilling its (2003), Crespo & del obligations vis-a-vis its Bosque (2005), Tingchi shareholders, suppliers, Liu et al (2014), Khan et distributors, and other agents with al (2015) csr502 whom it deals Is committed to well-established csr503 ethic principles Customer-based brand equity scale consists of 11 items, modified by experts in banking industry is showed in Table 3.3 as follows: Table 3.3 Measurement scale for customer-based brand equity Ident Item References The appearance of counter and staff Yoo et al (2000), Yoo & Donth cbbe01 (clean, neat, appropriately dressed) (2001), Kim et al cbbe02 The bank has up-to-date equipment (2003), Kim & Kim This bank is a top brand cbbe03 (2005), Kayaman & Its personnel are knowledgeable about all Arasli (2007), He & cbbe04 areas of bank services and friendly Li (2011), Pinar et I can recognize this bank branding al.(2012), Martinez cbbe05 among other competitors et al (2014), Financial services of this bank are high Tingchi Liu et al cbbe06 quality (2014), Khan et cbbe07 This bank offers high level of services al.(2015), Fatma et cbbe08 This bank is my first choice al (2016), Khan et I am satisfied with the perceived quality al (2016) cbbe09 of this bank cbbe10 I recommend this bank to others cbbe11 I would not switch to other banks for the next time 12 From the scale of King & Grace (2010) and modified by experts in banking industry, the employee-based brand equity scale is showed in Table 3.4 as follows: Table 3.4 Measurement scale for employee-based brand equity Ident Item In my bank… ebbe01 Take responsibility for task outside of own area ebbe02 I always behave based on the brand's reputation ebbe03 Consider impact on brand before acting ebbe04 Regularly recommend brand as the best place for trading and working ebbe05 Interested to learn more about brand ebbe06 Employee satisfaction ebbe07 Employee intention to stay ebbe08 Positive employee word-of-mouth Source: King & Grace, 2010 Thus, the perceived of CSR is divided into five dimensions (employee, shareholder, legal and ethical requirement, customer, community); brand equity are measured based on customers and employees; Financial performance measures according to each bank Although there are many tools to measure financial performance, ROA and ROE are popular According to Boaventura et al (2012), 48% and 29% of the study respectively used ROA and ROE to measure financial performance, the highest among other measures of financial performance such as revenue growth (22%), ROS (16%), profit margin (15%), Tobins'Q (10%) ROA and ROE are directly related to customer profits and management strategies With the majority of studies using ROA and ROE, the thesis continues to use two indicators to measure financial performance The thesis uses points Likert scale to measure concepts, this is the most common measurement and used by previous studies Sampling for quantitative research: Primary data was collected from interviews directly with questionnaires Respondents are customers, employees and managers who are trading and working at joint stock commercial banks in Mekong Delta Samples collected by nonprobability method Sample actual size is n1 = 356 customers and n2 = 344 staffs The thesis focuses on studying 29/31 joint stock commercial banks (there are two banks namely Dong A and Ban Viet in the period of special control from the State Bank of Vietnam) 13 Quantitative research methods: data are analyzed according to different methods and tools depending on the research objectives such as descriptive statistics, Cronbach’s Alpha analysis, Exploratory factor analysis EFA, Confirmatory factor analysis CFA and Structural equation modeling SEM CHAPTER 4: RESULTS AND DISCUSSION 4.1 THE SITUATION OF CORPORATE SOCIAL RESPONSIBILITY OF JOINT STOCK COMMERCIALS BANKS Corporate social responsibility is divided into customer, community, employee, shareholder and environment dimension The CSR’s dimensions are summarized in the following figure: 4.2 SAMPLE DESCRIPTION The survey area of the sample is Mekong Delta, Can Tho city is the most observed area, accounting for 32% of customer group and 40% of employee group Statistics by banks shown that VietinBank accounts for a high proportion in the sample with 14.9% of customer group and 9.3% of employee group The number of female is higher than male, but the difference between the gender is not much The survey sample has the lowest age of 20 years, the highest is 61 years old Through analysis by age, the group of interest in CSR’s activities in youth and reflect the 14 characteristics of young labor in banking industry Low-income customers accounted for 32.6% due to low age accounting for a high proportion In general, the income of customer group is lower than this of employee group Qualification of the respondents is quite high, mainly the bachelor degree Particularly, the employee group managing 99.7% of the respondents has a bachelor degree or higher This proves that when academic level is high, the respondents are more concerned about CSR and academic level of staff in banking industry is high Specifically, profile of the sample is presented in the following table: Table 4.1 Sample description Categor y Gender Age Income (monthly in VND) Qualific ation Male Female 20 – 29 30 – 39 40 – 49 0ver 50 Below 5.000.000 VND 5.000.000–7.000.000 VND 7.000.000–9.000.000 VND 9.000.000 VND and above High school Intermediate Bachelor degree Master degree Total Customer Group Sample % 164 46 192 54 240 67 85 24 24 7 116 33 89 25 103 28 48 13 38 11 272 76 39 11 356 100 Employee Group Sample % 141 41 203 59 203 59 109 32 25 7 120 35 115 33 100 29 0 0.29 318 92 25 344 100 Career of customer group divided into six groups, respondents are 27% officers, 21% business staff, 20% students Customer group with continuous trading time at branch is 3.7 years on average, ranging from to 18 years, with 93% of customers having years or less dealing with surveyed branch and the remaining (7%) have seniority transactions over years The staff has a number of consecutive years at the branch from to 34 years, concentrating most in groups of to years, accounting for 51% of respondents 4.3 ANALYSIS AND RESULTS FOR CUSTOMER GROUP Reliability and validity – Customer group The CSR scale includes five dimensions of customers, shareholders, employees, community, legal and ethical requirement This scale is taken from the study of Pérez et al (2013) (23 items), then translated and edited from the experts into 22 items The brand equity scale is also conducted 15 similar procedures and then measured through 11 items that reflect brand image, perceived quality and brand loyalty Cronbach’s Alpha coefficients are greater than 0.6, so all major constructs used in the main study achieved adequate levels of reliability All items have Item-to-total greater than 0.3 should be retained entirely Table 4.3 Reliability and validity – Customer group Construct Item Cronbach’s Alpha Factor loadings Corporate social responsibility (KMO = 0.867; Cumulative = 56.88%) Community dimension 0.800 0.644 – 0.760 Employment dimension 0.787 0.614 – 0.707 Customer dimension 0.652 0.605 – 0.774 Shareholder dimension 0.765 0.778 – 0.855 Legal and ethical 0.628 0.638 – 0.727 requirement dimension Brand equity (KMO = 0.942; Cumulative = 50.78%) + Brand equity 11 0.902 0.690 – 0.740 The convergent and discriminant validity – Customer group: The convergent, discriminant validity and content of the scale continue to be evaluated according to the results of the Exploratory factor analysis The CSR’s scale has five factors extracted The customer-based brand equity scale (CBBE) has one factor extracted, unchanged from the original proposal and satisfactory statistical parameters, showing that the Exploratory factor analysis is fit Measurement Scales by confirmatory factor analysis – Customer group: In the CFA model, the measurement model fit well with the data as seen in the fit statistics for the model with CMIN/DF = 1.8 < 3; CFI = 0,904; CFI = 0,914 > 0.9 The coefficients RMSEA = 0.048; SRMR = 0.047 < 0.06 so all measures of goodness of fit indicated a worse fit for the one-factor model for the original measurement model data The results of the weights of CFA model all have pvalue < 0.001 and the results of the weights are greater than 0.5, so providing evidence of convergent validity among our measures The scales all have good composite reliability (ρc ≥ α) From constructs with 35 items to be preliminarily evaluated, EFA analysis, CFA analysis was reduced to 31 items The correlation coefficients between the constructs are less than 0.9, indicating that concepts have discriminant validity and no autocorrelation between constructs Therefore, constructs are reasonably reliable and valid 16 Structural model testing – Customer group After testing the reliability and validity of the proposed measurement model, the relationships among all observed and latent variables in the proposed model were tested using structural equation modelling and testing hypotheses The results of estimation were showed in Figure 4.2 Results show a good fit to the data: CMIN/DF = 1.91 < 3, TLI = 0.904, CFI = 0.914 > 0.9 and RMSEA = 0.051< 0.06; SRMR = 0.073 < 0.08 Chi2-bs(418) = P= RMSEA = 799.955; 0.000; 0.051; CFI = 0.914 TLI = 0.904 SRMR = 0.073 Figure 4.2 SEM results for Customer group Solid-line arrows stand for significant relationships while dashed-line arrows stand for nonsignificant relationship The results of testing hypotheses are shown in the regression weight table as follows: 17 SEM results showed that five CSR’s dimensions affect on financial performance H1 and H4 show that the community and customer dimensions negatively effect on bank's financial performance Although H1 and H4 are supported but contrary to expectations This negative effect implies that these two CSR’s dimensions can be detrimental to maximizing profit in the short term This implication has been warned by Friedman (1970) that corporate resources should focus on increasing profits, instead of investing in CSR’s activities This result is similar to the experimental results of Kang et al (2010) of Airline industry and EstebanSanchez et al (2017) of banking industry also shown the negative relationship between CSR and financial performance In fact, in recent years, banks have spent a lot of resources for CSR’s activities in customers and community dimension and this investment has increased over the years, leading to improve customer perception in these dimensions even ROE and ROA decreased More specifically, from 20112016, VPbank's business results are better but investment costs for community responsibilities are declining H2, H3 and H5 showed that employee, shareholder, legal and ethical requirement dimensions positively impact on the bank's financial performance The quantitative research results are consistent with many previous studies such as Wu & Chen (2013) and Maqbool & Zameer (2018) using banking data with dependent variable ROA, ROE measuring financial performance In fact, commercial banks comply with laws, regulations, ethical standards, care for employees and good performance with shareholders make financial performance better 18 H6, H8, H9 said that the community, legal and ethical requirement and customer dimensions positively impact on bank's brand equity and are supported SEM results showed that some CSR’s dimensions have a positive impact on brand equity This result is consistent with the study of He & Li (2011) in Taiwan telecommunications industry; Torres et al (2012); Iglesias et al (2017) research customers in eight service areas Studies in banking industry such as Marin et al (2009), Martínez et al (2014), Fatma et al (2016b) also had similar results on positive impact of CSR on brand equity Employees, shareholders dimension impacted positively on brand equity but two hypothesises were rejected due to unsignificant This problem can be explained by the difference of perception While managers judged subjectively employee and shareholders dimension positively impact the brand equity, but the survey is customer's perception of these two CSR’s dimensions did not impact on brand equity Saeednia & Sohani (2013) also rejected the relationship between CSR and brand equity In fact, customers often care about other dimensions except employees and shareholders dimension, so two dimensions were not sufficient evidence to have an impact on brand equity Brand equity positively impact on bank's financial performance (H11) was supported, consistent with the study of Kim et al (2003) and Kim & Kim (2005) in hotel restaurant and Wang et al (2015) research high-tech companies in Taiwan Group analysis by gender: Group analysis is used to compare measurement models by qualitative variables (gender) The results of group analysis by gender gave results with 192 females, there was 9/11 relationships that are statistically significant; while 164 male had 5/11 statistically significant relationships To conclude the difference between male and female, the study used Wald Test The results found a gender difference in the relationship between legal and ethical requirement dimension, brand equity and financial performance; the relationship between customer dimension and brand equity; relationship between brand equity and financial performance Testing the mediating effects – Customer group: Because the theoretical model has three concepts that interact with each other, the author conducts direct and indirect analysis to conclude on intermediate variables (brand equity) in CSR - financial performance relationship Community dimension has a negative and direct impact on financial 19 performance but with the support of brand equity, this negative impact is reduced (-0.199 → -0.155) The employee dimension has a positive and direct impact on financial performance, but with the support of brand equity, this positive impact is increased (0.177 → 0.182) The legal and ethical requirement dimension positively impacts both directly and indirectly on financial performance through brand equity The customer dimension has a direct and indirect impact on financial performance, but with the support of brand equity, this negative impact is decreased (-0.358 → -0.215) The shareholder dimension has a direct positive impact on financial performance but with the support of brand equity, this positive impact is increased (0.108 → 0.126) 4.4 ANALYSIS AND RESULTS FOR EMPLOYEE GROUP Reliability and validity – Employee group: Cronbach’s Alpha coefficients of five CSR’s constructs and employee-based brand equity are greater than 0.6, so all major constructs used in the proposed measurement model achieved satisfactory construct reliability All items have Item-to-total greater than 0.3 threshold should be retained entirely Table 4.3 Reliability and validity – Employee group Construct Items Cronbach’s Alpha Factor loadings Corporate social responsibility (KMO = 0.896; Cumulative = 64.04%) Community dimension 0.838 0.747 – 0.811 Employment dimension 0.905 0.752 – 0.841 Customer dimension 0.730 0.631 – 0.789 Shareholder dimension 0.665 0.545 – 0.780 Legal and ethical 0.776 0.550 – 0.811 requirement dimension Brand equity (KMO = 0.901; Cumulative = 57.92%) Brand equity 0.894 0.697 – 0.839 The convergent and discriminant validity – Employee group The result of Exploratory factor analysis for CSR’s scale is to remove csr301 item due to loading factor < 0.5 threshold In terms of content of this item has no major impact on measuring the constructs Thus, the result of Exploratory factor analysis for scales ensure requirements and CSR’s scale has five factors extracted The employeebased brand equity scale (EBBE) has one factor extracted, unchanged 20 from the original proposal and satisfactory statistical parameters, indicating that EFA analysis is fit Measurement scales by confirmatory factor analysis – Employee group: CFA analysis obtained results with CFI = 0.903 and TLI = 0.891, close to 0.9 threshold The coefficients RMSEA = 0.065; SRMR = 0.054 < 0.06 so all measures of goodness of fit The results of standardized weights of CFA models have pvalue < 0.001 and reliability validity indicators with standardized weights are greater than 0.5 threshold, so providing evidence of convergent validity among our measures The scales all have good composite reliability (ρc ≥ α) From seven constructs with 32 items, preliminary assessment, EFA, CFA was reduced to 31 items The correlation coefficient between concepts is from 0.144 to 0.854, showing that the correlation coefficients between the constructs are less than 0.9, indicating that concepts has discriminant validity There is no autocorrelation between constructs Therefore, constructs of interest are reasonably reliable and valid Structural model testing – Employee group: SEM results in Figure 4.3 show that TLI = 0.912, CFI = 0.922 are greater than 0.9 and RMSEA = 0,058 < 0,06; SRMR = 0.065 < 0.08 Thus, the model demonstrated good model fit Chi2-bs (435) = 6639,656; P = 0,000; RMSEA = 0,058; 21 CFI = 0,922 TLI = 0,912 SRMR = 0,065 Figure 4.3 SEM results for Employee group Solid-line arrows stand for significant relationships while dashed-line arrows stand for nonsignificant relationship After testing model fit, the results test the following hypotheses: The SEM results showed that: the community dimension impacts negatively on financial performance (H1) but had no statistically significant This result implied that employees' perception of community activities did not impact on the bank's financial performance This result was consistent with Lin et al (2009) studied in the context of Taiwanese enterprises to conclude CSR did not effect financial performance in short term Kang et al (2010) also concluded that there is no relationship between CSR and financial performance (Casino industry) Similarly, Nollet et al (2016) argued that there was no linear relationship between two concepts In fact, in some joint stock commercial banks, the CSR’s budget and CSR’s activities towards the community are stable over the years, according to the plan of head office According to the employees' perception, this dimension did not impact on bank's financial performance Employee dimension positively impact on financial performance (H2) was supported, which was consistent with Kim et al (2017) studied 442 staffs of hotel industry However, Ho Viet Tien and Ho Thi Van Anh (2017) studied listed companies for the results of employee dimension did not impact on financial performance The legal and ethical requirement dimension positively impacts on financial performance is not statistically significant, H3 was rejected Soana (2011) studied banking industry and there was no statistical evidence about CSR - financial performance 22 relationship Customer dimension positively impacts on financial performance, (H4) was supported, similar to Rhou et al (2016) studied restaurant industry Shareholder dimension negatively impacts on financial performance; means that the better employees perception about shareholder dimension is, the lower financial performance Negative impact of shareholder dimension on financial performance was consistent with Esteban-Sanchez et al (2017) of banking industry However, the data is momentary, so commercial banks should still invest in CSR to receive positive results in the long term Hypothesis H6 is rejected which means that community dimension did not effect on employee based brand equity Similar to Saeednia and Sohani (2013) studied 384 bank employees, which concluded CSR did not impact on brand equity Hypothesis H7, H8, H10 suggests that the employee, legal and ethical requirement, shareholders dimension positively impact on employee based brand equity were suported Torres et al (2012) studied CSR’s dimensions of 57 strong brands that positively impacted on brand equity Similarly, Fatma et al (2016) concluded that CSR positively impacts on brand loyalty In addition, Tao et al (2018) studied the impact of CSR’s perception on the intention of attachment and the relationship of employees and businesses of 660 employees also gave similar results Hypothesis H9 is rejected, statistical evidence had not been found While managers judge subjectively the customer side positively effects on brand equity, but the author's survey was employee's perception of this dimension did not effect on employee-based brand equity Hypothesis H11 is accepted, employee-based brand equity positively effects on financial performance, similar to Kim et al (2003) In addition, Saeidi et al (2015) studied 205 businesses showing the reputation of positive impact on financial performance Group analysis by working positions: Applying group analysis by staff and manager to test individual factors and working positions effecting on CSR’s perception and brand equity with differences between staffs and managers in the bank The results of group analysis showed that: with 253 staffs, 7/11 relationships are statistically significant; while 91 managers that there were 3/11 relationships with statistical significance To conclude the difference between staffs and managers, the study used Wald Test The results found differences in the relationship between employee and customer dimension and financial performance; 23 the relationship between employee dimension and brand equity; relationship between brand equity and financial performance Testing the mediating effects – Emlpoyee group: The employee dimension positively influences on financial performance directly as well as indirectly through intermediate variables - brand equity This result showed that the positive impact of legal and ethical requirement dimension on financial performance is indirectly through brand equity This result is similar to Saeidi et al (2015), which studied 205 enterprises found that CSR did not impact directly on performance Customer dimension positively impacts directly on financial performance Shareholder dimension had not enough statistical evidence to show an impact on financial performance CHAPTER 5: CONCLUSIONS AND MANAGERIAL IMPLICATIONS 5.1 MANAGERIAL IMPLICATIONS The results are empirical evidences to provide managerial implications for banking managers to develop strategies and decision making related to CSR’s programs From bank administration, the thesis has demonstrated the better CSR’s perception, the better brand equity and improved financial performance Therefore, banking managers and stakeholders should approach this point of view to develop CSR’s activities Owing to the above results, seven managerial implications are proposed to support bank managers in the process of developing and implementing CSR practices, including: (1) building a CSR’s strategies in the long term; (2) organizating CSR’s practices from Labor Union Organizations; (3) compliance regulations, ethical standards; (4) disclosuring relevant CSR’s information; (5) conducting CSR’s practices suitable for each customer’s group; (6) strengthening brand equity, and (7) focusing on each dismension in CSR’s programs to enhance brand equity and financial performance 24 5.2 CONCLUSIONS The thesis has developed a theoretical model to test the relationship between CSR’s perception of customer and employee in banking industry, brand equity and financial performance, based on stakeholder theory of Freeman (1984) Through literature review and empirical research to measure the relationship between CSR, brand equity and financial performance.The main findings of this study are as follows: To measure the impact of CSR on financial performance of banks, the results showed that according to customers' perceptions, five CSR’s dimension impact on financial performance In which, employee, shareholder, legal and ethical requirement dimensions positively impact on financial performance, in contrast to community and customers dimension negatively impact on financial performance In addition, the thesis finds statistical evidence about positive relationship of employee, customer dimensions and financial performance according to employees' perception, and negative relationships of shareholder dimension and financial performance To measure the impact of CSR’s dimensions on brand equity The result of hypothesis testing showed that legal and ethical requirement, customers and community dimensions have a positive impact on customer- based brand equity; while employee, shareholder and legal and ethical requirement dimensions positively impact on employee-based brand equity With the purpose of measuring the relationship between brand equity and financial performance, the results agreed that brand equity has a positive impact on financial performance This study shows that the more customers and employees are satisfied with CSR, the more they prefer the brand, which lead to higher financial performance Considering to the impact of CSR’s perception on financial performance, the results show some CSR’s dimensions had direct impact as well as indirect impact on financial performance through brand equity Based on the results of group analysis, bank managers can design CSR’s activities to each target customer’s group The banks should continue to propagandize and raise CSR’s perception In addition, the results emphasize customer, community, and legal and ethical requirement dimensions to improve customer-based brand equity Therefore, bank managers can effectively allocate resources to CSR’s activities Findings showed that the banking industry should strive to 25 enhance brand equity because it directly impacts on financial performance The research results showed the difference between employees and managers to make appropriate strategy Bank managers should focus on each CSR’s dimension to bring more benefits This study highlights an important role of brand equity in CSR - financial performance relationship From the results of the study on corporate social responsibility in Mekong Delta, the thesis has two recommendations: improving the legal documents on CSR in Vietnam and The State Bank of Vietnam should issue policies to encourage the implementation of CSR’s practices in jointed stock commercial banks 5.3 LIMITATIONS AND DIRECTION FOR FUTURE RESEARCH Apart from significant findings, some limitations have been acknowledged in this study: (1) The model focus on joined stock commercial banks, future studies should focus on other types of banks (2) The present model of the study has been tested in the banking industry, where the nature of services is so complex The authors suggest that the proposed model be tested in other industries and other areas (3) The thesis uses 5-point Likert scales, so future research can use other scales to verify (4) Few CSR’s dimensions were found to be an insignificant antecedent of brand equity and financial performance in this study To have a better understanding of this unexpected finding, future studies may focus on exploring the rejected hypothesis (5) The reverse relationship between CSR and financial performance is not included in the present study, future studies can check this relationship or use panel data to reaffirm these results 26 ... of brand equity and financial performance (Kim et al., 2003) The success of brand management comes from understanding brand equity and managing brand equity to increase financial performance (Kim... employee-based brand equity With the purpose of measuring the relationship between brand equity and financial performance, the results agreed that brand equity has a positive impact on financial performance. .. activities, the financial performance of joint-stock commercial banks The author aims to explore CSR’s dimensions, and whether these dimensions affect on brand equity and financial performance At the