Ethical Gaps and Market Value in the Islamic Banks of Bangladesh

Review of Islamic Economics, Vol 14, No. 1, pp. 49-75, 2010

27 Pages Posted: 9 Feb 2013

See all articles by M. Kabir Hassan

M. Kabir Hassan

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

Mamunur Rashid

University of Brunei Darussalam - UBD School of Business and Economics; Nottingham University Business School Malaysia Campus

Md. Imran

Shahjalal Islami Bank Limited

Abdullah Shahid

Cornell University

Date Written: January 26, 2010

Abstract

Abstract: This study measures the ethical identity of Islamic banks in Bangladesh over the period 2001 to 2006. An index of ethical identity, following Haniffa and Hudaib (2007), is constructed by drawing information revealed in the annual reports of the banks. The index is composed of eight different dimensions: (i) mission and vision statement, (ii) board of directors and top management, (iii) products and services, (iv) zakah, charity and benevolent fund, (v) commitment towards employees, (vi) commitment towards debtors, (vii) commitment towards society, and (viii) Shari[ah Supervisory Board. Then, the study also investigates the relationship between the ethical identity index and market value of these banks. Results show that some of the dimensions of ethical identity are over-communicated and others under-communicated in the annual reports. A significantly positive association has been observed between the ethical identity index and market value of banks. The study recommends possible improvements in Islamic banks’ communication of their ethical identity through annual reports.

JEL Classification: C83, G21, M14, Z12

Suggested Citation

Hassan, M. Kabir and Rashid, Mamunur and Imran, Md. and Shahid, Abdullah, Ethical Gaps and Market Value in the Islamic Banks of Bangladesh (January 26, 2010). Review of Islamic Economics, Vol 14, No. 1, pp. 49-75, 2010, Available at SSRN: https://ssrn.com/abstract=2207296

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

Mamunur Rashid (Contact Author)

University of Brunei Darussalam - UBD School of Business and Economics ( email )

Jalan Tungku Link
Gadong
Bandar Seri Begawan, BE1410
Brunei

Nottingham University Business School Malaysia Campus ( email )

Jalan Broga
Semenyih, Selangor 43500
Malaysia

HOME PAGE: http://www.nottingham.edu.my/Business/People/Mamunur.Rashid

Md. Imran

Shahjalal Islami Bank Limited ( email )

Uday Sanz, Plot No. SE (A)
2/B Gulshan South Avenue
Dhaka
Bangladesh

Abdullah Shahid

Cornell University ( email )

Ithaca, NY 14853
United States

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