Religiosity and corporate social responsibility practices: evidence from an emerging economy

Abstract

Purpose The purpose of this study is to present and test a conceptual framework that describes the Islamic religiosity parameters of riba, zakat and mafsadah and their influence on the adoption of firms’ corporate social responsibility (CSR) practices. Design/methodology/approach The study applied structural equation modelling to empirically test the proposed model on a sample of 109 Pakistan Stock Exchange (PSX) listed firms. Findings The study finds that the Islamic religiosity parameters of riba and mafsadah have a positive influence on the adoption of CSR practices, thus confirming the two study hypotheses. However, the authors did not find any significant influence of the zakat parameter on the adoption of firms’ CSR practices. Research limitations/implications This study is limited to the Islamic religious concept and only surveyed one stakeholder group, i.e. firms’ managers in the Pakistani context. The authors recommend that future studies should look beyond a single religion with the inclusion of multiple stakeholders in a cross-country setting. Practical implications The findings possess important policy implication for regulators, stakeholders and practitioners, as the authors demonstrate that different parameters of religiosity are related to CSR practices and these parameters can be used as a substitute for and complement legal institutions in promoting and developing CSR practices. Social implications The stakeholders’ particular investors and other market participants should be aware of the degree of religiousness and the CSR nexus, as surveyed manger responses in PSX listed firms indicate that better religious firms seem to place more emphasis on social responsibility obligations. Originality/value This study is among few studies that propose a comprehensive conceptual Islamic religiosity framework to evaluate the influence of a firm’s Islamic religiosity on CSR best practices. It differs from the past studies that were either on Islamic financial institutes or examined the religious influence on a firm’s economic behaviours.

The Interactive Effect of Religiosity and Perceived Organizational Adversity on Change-Oriented Citizenship Behavior

“…Religion is a significant part of how many Muslims experience their lives, including their behaviors and work practices (Ali, 1992;Hodge, 2002;Khan, Abbas, Gul, & Raja, 2015). The pillar of Zakat in Islamic faith in particular motivates Muslims to take a proactive approach to pinpointing and improving problematic situations (Zaman et al, 2018). At the same time, Muslims exhibit clear variations in the extent to which their religious beliefs inform their work activities (Ali, 2005;Murtaza et al, 2016).…”

“…This religion strongly encourages employees to take the initiative in contributing voluntarily to their organization's well-being (Alhyasat, 2012;Murtaza et al, 2016), including by identifying innovative solutions to organizational problems (Kumar & Che Rose, 2010). Religiosity might generate a tendency toward conformism in general (Saroglou, Corneille, & Van Cappellen, 2009), but the principles underlying Islamic faith-and particularly the notion of Zakat, one of the five pillars of the Islamic code of life, which requires people to be proactive in alleviating adverse situations (Olanipekun, Brimah, & Sanusi, 2015;Zaman, Roudaki, & Nadeem, 2018)support the notion that employees should do their utmost to change and improve the organizational status quo, even if these efforts are not included in formal job descriptions.…”

Advancing transcendent development: An in‐depth review of developmental corporate social responsibility’s value proposition, inhibitions, and inclusive sustainable development prospects

“…Similarly, other DCSR scholars like Zaman et al. (2018, p. 368) studied how religion shapes CSR outcomes in developing contexts and revealed that “better religious firms seem to place more emphasis on social responsibility obligations.” This “(I5) Insensitivity” also occurred in the form of expectations being placed on businesses to engage in refugee crisis relief efforts. All refugee relief efforts are noble and much‐needed, however, the discourse was framed around the company’s commercial interests with little regard for the traumatic circumstances that refugees find themselves in.…”

Customer-perceived service wellbeing in a transformative framework: Research propositions in the area of health services

“…Apart from the moderating influence, proposed here, of customer characteristics, there are other possible moderating effects. For instance, religiosity plays a significant role in the relationship between service recovery and recovery satisfaction (Rashid & Ahmad, 2014 ) and firm’s religiosity influences on corporate social responsibility practices (Zaman et al, 2018 ). The authors suggest focusing on the direct relationship between customer characteristics and other dependent variables — for example, between customer efforts in value-creation activities and behavioral intentions and quality of life (Sweeney et al, 2015 ) and between customer religiosity and behavioral patterns in the marketplace (Muhamad & Mizerski, 2007 ).…”