The Effect of Islamic Social Reporting on Performance of Maqashid Sharia

Abstract

The purpose of this study is to investigate and assess the impact of Islamic Social Reporting (ISR) on the performance of Maqashid Sharia ini Islamic Banks in Indonesia and Malaysia. ISR is used to assess Islamic banks' social responsibility, whereas the Maqashid Sharia Index (MSI) indicator with the Abu Zahrah approach is used to assess their financial performance. The target audience for this study is Islamic banks operating across Indonesia and Malaysia from 2016 to 2020. Then, using the purposive sampling method, a sample of 21 Islamic banks was obtained. Simple linear regression analysis and statistical t tests are used to test hypotheses. The findings revealed that Islamic Social Reporting had a beneficial impact on Maqashid Sharia performance. Another finding is that when comparing the Maqashid Sharia performance of Islamic banks in Indonesia and Malaysia, the average value of the Maqashid Sharia Index in Indonesian Islamic banks is greater than in Malaysian Islamic banks.