Determinants of Corporate Social Responsibility Disclosure: The Case of Islamic Banks

36 Pages Posted: 3 May 2011

See all articles by Sayd Farook

Sayd Farook

Thomson Reuters

Roman Lanis

University of Technology Sydney (UTS); Financial Research Network (FIRN)

M. Kabir Hassan

University of New Orleans - College of Business Administration - Department of Economics and Finance

Multiple version iconThere are 2 versions of this paper

Date Written: May 2, 2011

Abstract

Islamic banks offer distinct financial services and as such have grown significantly in Bahrain, Bangladesh, Jordan, Kuwait, Malaysia, Qatar, Turkey and U.A.E over the past two decades. They are unique in the sense that they are accountable to fulfil a social and ethical role inherent in their character as an ‘Islamic’ institution. They also have a duty to discharge their accountability through disclosing corporate social responsibility (CSR) information consistent with the principles of Islam. However, recent anecdotal evidence finds that Islamic banks may not be fulfilling their social role in accordance with the prescriptions of Islam because they disclose less CSR information than expected. It has been suggested that disclosure may also be driven by the extant economic incentives. Hence, the exact nature of the CSR disclosure process by Islamic banks remains unclear due to a paucity of a priori research and statistical analysis of extant data. In light of that, this study develops an a priori model linking CSR disclosure to socio-political influences and corporate governance factors. Then resultant hypotheses are tested using regression analyses on a sample of 47 Islamic banks’ annual reports from 14 countries.

Keywords: Corporate Governance, Corporate Social Responsibility Disclosure, Islamic Banks, Islamic Finance, Political Economy, Legitimacy Theory

JEL Classification: G21, M14, Z12, Z13

Suggested Citation

Farook, Sayd Zubair and Lanis, Roman and Hassan, M. Kabir, Determinants of Corporate Social Responsibility Disclosure: The Case of Islamic Banks (May 2, 2011). Available at SSRN: https://ssrn.com/abstract=1828624 or http://dx.doi.org/10.2139/ssrn.1828624

Sayd Zubair Farook (Contact Author)

Thomson Reuters ( email )

Bahrain

Roman Lanis

University of Technology Sydney (UTS) ( email )

15 Broadway, Ultimo
PO Box 123
Sydney, NSW 2007
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

M. Kabir Hassan

University of New Orleans - College of Business Administration - Department of Economics and Finance ( email )

2000 Lakeshore Drive
New Orleans, LA 70148
United States

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