Effect of Corporate Social Responsibility on Pricing of Small Business Loans: Evidence From Finland

Markku Vieru, Janne Peltoniemi

Research output: Chapter in Book/Report/Conference proceedingChapterScientificpeer-review


This study analyzes corporate social responsibility (CSR) issues in small business finance in Finland, especially within relationship banking. The study combines credit-file data obtained from a large local Finnish bank with a CSR questionnaire conducted with the bank’s business loan managers. The credit-file data contain specific details of CSR characteristics, as well as relationship-, collateral-, firm-, and loan-specific characteristics. CSR, typically considered as a non-financial item, contains value-relevant financial information which affects the loan pricing level. The results show that both overinvestment in CSR and the value created by CSR are valid but connected to different CSR characteristics. Overinvestment is associated with the environment and value creation with diversity and employees. The results contribute to the understanding of the characteristics of CSR in the context of small business bank lending, as well as more generally to important implications for small firms, banks, and management practices.
Original languageEnglish
Title of host publication Sustainability Reporting, Ethics, and Strategic Management Strategies for Modern Organizations
EditorsIonica Oncioiu , Sorinel Căpușneanu, Dan Ioan Topor, Dana Maria (Oprea) Constantin
Place of PublicationHershey
PublisherIGI Global
Chapter 9
ISBN (Electronic)1799846377
ISBN (Print)9781799846376
Publication statusPublished - 31 Jul 2020
MoEC publication typeA3 Part of a book or another research book

Field of science

  • Business and management


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