Are the Social Concern Policies of Islamic Banks Caused by Economic Motives? Empirical Evidence on Islamic Banks in Indonesia

Mukhibad, Hasan; Prabowo, J; Anisykurlillah, Indah

doi:10.4108/eai.25-6-2019.2287983

Cited by 2 publications

(4 citation statements)

References 19 publications

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“…impacts economic performance after a long period. This finding is in line with Asrori et al (2023), Mukhibad et al (2020), Mukhibad et al (2019), Mallin et al (2014), and Mosaid & Boutti that the CSR performance of IBs has no impact on increasing financial performance.…”

Section: Jiafr | 221supporting

confidence: 85%

“…So, banks cannot use these zakah funds for bank social activities, which can have a positive impact on improving the reputation, customer loyalty, and financial performance of IBs, including reducing the cost of PSIA. Mukhibad et al (2019) reinforce this argument when their study reports that there is a minimal proof that the social and environmental concern policies of IBs are caused by economic motives. IBs have a motive related to catching the sharia role as the basis for implementing social and environmental concern activities.…”

Section: Jiafr | 219mentioning

confidence: 87%

“…However, several researchers report no economic consequence of CSR in IBs. Asrori et al (2023), Mukhibad et al (2020), Mukhibad et al (2019), Mallin et al (2014), and Mosaid & Boutti (2012) report that CSR disclosure of IBs has no impact on increasing financial performance. IB's concern for social, economic, and environmental issues as a form of worship carries out religious teachings (Mukhibad et al, 2019) and is in line with their religious values and beliefs (Mallin et al, 2014).…”

Section: Hypotheses Developmentmentioning

confidence: 99%

“…Asrori et al (2023), Mukhibad et al (2020), Mukhibad et al (2019), Mallin et al (2014), and Mosaid & Boutti (2012) report that CSR disclosure of IBs has no impact on increasing financial performance. IB's concern for social, economic, and environmental issues as a form of worship carries out religious teachings (Mukhibad et al, 2019) and is in line with their religious values and beliefs (Mallin et al, 2014). There are no economic consequences of this CSR because IB's concern for social, economic, and environmental issues as a form of worship carries out religious teachings (Mukhibad et al, 2019) and is in line with their religious values and beliefs (Mallin et al, 2014).…”

Section: Hypotheses Developmentmentioning

confidence: 99%

See 3 more Smart Citations

Bank social fund distribution and cost of profit-sharing investment account: evidence from Indonesia

Jayanto,

Mukhibad,

Aziz

2023

JIAFR

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Purpose - This study aims to prove the impact of the distribution of social funds (qardhul hasan-QH and zakah funds) on the cost of a Profit-Sharing Investment Account (PSIA) immediately and for a long period in Islamic banks.Method - The research is based on panel data from 11 Islamic commercial banks (IB) in Indonesia from 2009 to 2021. Data were analyzed using the generalized least squares (GLS) random-effects method with robust standard error.Result - This research proves that the distribution of social funds (the distribution of QH and zakah funds) has a positive economic impact in the short period but the distribution of social funds has a negative economic impact in the long period.Implication - This study contributes to bank directors in considering the social activities of banks funded by QH funds by considering the effectiveness of social fund distribution, hence having positive economic consequences for bank performance.Originality - This research contributes to the development of previous literature in two ways. First, we use CSR performance proxies that are different from previous studies, namely the distribution of QH and zakah funds. The distribution of these funds is a proof of the bank's legitimacy to care about social, economic, and environmental issues. Second, we use the cost of PSIA as an economic consequence of CSR performance.

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Section: Jiafr | 221supporting

confidence: 85%

Section: Jiafr | 219mentioning

confidence: 87%

Section: Hypotheses Developmentmentioning

confidence: 99%

Section: Hypotheses Developmentmentioning

confidence: 99%

See 2 more Smart Citations

Bank social fund distribution and cost of profit-sharing investment account: evidence from Indonesia

Jayanto,

Mukhibad,

Aziz

2023

JIAFR

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SSB Characteristics and Integrated Reporting Quality in Islamic Banks : Evidence from MENA zone

Said

2024

Preprint

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Purpose - This study was conducted to examine empirically the influence of characteristics of Shariaa Supervisory Board on the quality of integrated reporting in Islamic banks operating in MENA zone. Design/methodology/approach – To test the study’s hypotheses, we used panel regression analysis for 69 Islamic banks from14 countries in MENA zone over the 2012-2022 period. The dependent variable is the Integrated reporting quality, measured by the CGVS score. The independent variables are the SSB size, the educational qualification of SSB members, the SSB expertise, the gender diversity among SSB members and the independent of SSB memebers. The controlling variables are the bank size, the leverage level and the credit risk. Findings- Our empirical results show that, during the study period, SSB size as well as SSB eduactional qualification influence IRQ positively and significantly, SSB gender diversity iinfluences it negatively and significantly, while SSB experience in finance and accounting fields as well as SSB independent members are insignificant. As regards control variables, the bank size influences IRQ positively, but insignificantly, leverage level influences it positively and credit risk influences it negatively but insignificantly. Practical implications- The outcomes of our study are relevant for Islamic banks, policymakers, regulators, investors aas well as researchers concerned with integrated reporting practices in MENA zone and in the whole world. In fact, our theoretical development provide valuable insights likely to improve the understanding of the role of SSB characteristics in explaining managerial choices in relation with integrated reporting practices in firms in general and in Islamic banks particularly. Empirically, our work provides insight to Islamic banks as well as investors to understand the weight of educational qualification in SSB. Furthemore, they may understand that it is no longer enough to have experiment and independent members in SSB but to give them all rights to supervise choices and decisions in the SSB. It is about the effectively implementation of independence. Furthemore, it is no longer enough to IBs to have more women in the SSB as to improve the Islamic bank reputation but to have very qualified and talented women who really participate in the decision-making in relation with integrated reporting practices and value creation process. Policymakers are called to Policymakers are called to establish further regulations that must be suitable to country-specific settings, with respect to Shariaa compliance.

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Are the Social Concern Policies of Islamic Banks Caused by Economic Motives? Empirical Evidence on Islamic Banks in Indonesia

Cited by 2 publications

References 19 publications

Bank social fund distribution and cost of profit-sharing investment account: evidence from Indonesia

Bank social fund distribution and cost of profit-sharing investment account: evidence from Indonesia

SSB Characteristics and Integrated Reporting Quality in Islamic Banks : Evidence from MENA zone

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