Determinants of Corporate Social Responsibility Disclosure: The Case of Islamic Banks
36 Pages Posted: 3 May 2011
Date Written: May 2, 2011
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: Suggested Citation