Publication: CSR Disclosure and Firm Value: A Study on Gcc Islamic Banks
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Date
2023
Journal Title
Journal ISSN
Volume Title
Publisher
The Journal of Islamic, Social, Economics and Development (JISED)
Abstract
This study explores the CSR disclosure practices of the Islamic banks in the Gulf
Cooperation Council (GCC) countries during the period 2016 - 2020 and examines its effects
on firm value. Based on Accounting and Auditing Organization for Islamic Financial
Institutions (AAOIFI) Governance Standard No. 7 guidelines and using content analysis, the
paper develops a comprehensive CSR Disclosure index for GCC Islamic banks. The study
applies the ordinary least squares regression analysis for the hypothesis testing and for finding
its effect of respective dependent variables. The results show a very low level of CSR disclosure
among the sample Islamic banks in GCC countries. For the economic consequences of CSR
disclosure, the study documents an inverse performance effect of CSR Disclosure while board
size, board composition and CEO duality indicate significant positive effects on firm value. The
relatively small sample size of GCC Islamic banks may limit the application of the findings to
other Islamic Financial Institutions such as Takaful and the Islamic Unit Trust Company. The
findings of this study initiate the global debate on the need for corporate governance reform in
Islamic banks by providing insights on the role played by corporate governance mechanisms
in encouraging and enhancing CSR disclosure practices among Islamic banks. The findings
also have important implications for investors, managers, regulatory bodies, policy makers and
Islamic banks in the GCC countries. The results of the study do not support the idea that Islamic
banks operating on Islamic principles can meet their social responsibilities through promoting
CSR activities and by differentiating themselves from non-Islamic banks. This is the first study
to examine the CSR disclosure in GCC Islamic banks using comprehensive CSR disclosure and
corporate governance variables and, therefore, adds value to the existing CSR literature in
banking.
Description
Journal of Islamic, Social, Economics and Development (JISED)
Volume: 8 Issues: 56 [September, 2023] pp. 695 - 714
Keywords
: CSR Disclosure, Firm Value, AAOIFI, Gulf Cooperation Council, Islamic Banks
Citation
Mohd Shukor Harun, Muhamad Fikri Aziz, & Razli Ramli. (2023). CSR Disclosure and Firm Value: A Study on Gcc Islamic Banks. Journal of Islamic, Social, Economics and Development, 8(56), 695–714. https://doi.org/10.55573/JISED.085656