Shariah Conformity dan Profitability: Apakah Ethical Identity Berpengaruh di Bank Syariah?

Abstract

This study aims to analyze the effect of ethical identity index and company size on Islamic banking performance as measured by shariah conformity and profitability (SCNP). The sample in this study were 48 Islamic banking financial reports taken from the 2014-2017 period. The data analysis method used in this study is multiple linear regression with panel data. The results of this study indicate that the ethical identity index affect shariah conformity and profitability, but company size does not affect the performance of shariah conformity and profitability. The implication of this research is that Islamic banking is expected to improve the identity of Islamic ethics through disclosures in financial reports.

Performance of Indonesia Sharia companies: Does corporate ethical identity matter?

“…Moreover, the present study results align with the findings of Fitria and Sulhani (2021), who similarly investigated the relationship between the EII and the performance of Islamic banking. Their research highlights a positive effect of ethical identity on overall banking performance.…”

“…So, it is important for companies to have a good and appropriate performance measurement system because companies must remain competitive and financially strong. Fitria and Sulhani (2021) mention that performance evaluation of Islamic financial institutions is as important as measuring individual achievement. This is because the roles and responsibilities of Islamic financial institutions are not only limited to the financial needs of various parties, but the main principle is how they run their business and the actions used to ensure that all activities are compliant with sharia.…”

“…Performance can be interpreted as an activity that can be measured by an entity within a certain period which can be used as a reference for the success of the entity (Muhibbai & Basri, 2017). Then information about performance can be used to measure the company's development and can be used as a reference to determine the policies to be taken by the company (Fitria & Sulhani, 2021).…”