Corporate social responsibility disclosures (CSRDs) in the banking industry: a study of conventional banks and Islamic banks in Malaysia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tze Kiat Lui ◽  
Mohd Haniff Zainuldin ◽  
Ahmad Nazri Wahidudin ◽  
Chuan Chew Foo
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Banking Sector ◽  
Least Square ◽  
Ownership Concentration ◽  
Islamic Banks ◽  
Content Type ◽  
Conventional Banks ◽  
Corporate Social ◽  
The Impact

PurposeThe purpose of this study aims to empirically examine the corporate social responsibility disclosure (CSRD) levels of conventional and Islamic banks in Malaysia. Additionally, as Malaysian banks have different shareholding patterns that are more highly concentrated than those in the developed economies, this study also investigates the impact of ownership concentration on CSRD in both types of banks.Design/methodology/approachThis study employs hand-collected corporate social responsibility (CSR) data from the annual and sustainability reports of 21 conventional banks and 16 Islamic banks in Malaysia during 2010–2017. The data are then run using the pooled ordinary least square (OLS) with robust standard errors and robust regressions models together with all possible factors determining CSRD in the banking sector.FindingsThis study discovers that Islamic banks disclose a higher level of total CSRD than their conventional counterparts after controlling a number of important determinants of CSRD. These results remain consistent for four different dimensions of CSRD, i.e. employees, communities, environment and products and services. In relation to the impact of ownership concentration on CSRD level, the results show that high ownership concentration reduces the level of CSRD by Malaysian banks. However, in an additional interaction test, the result exhibits a complementary relationship between Islamic banks and ownership concentration in influencing CSRD level.Research limitations/implicationsThis study finds that the principle of Islamic accountability has been internalised by Islamic banks, and shaped them to put equal emphasis on the disclosure of CSR practices and the financial information disclosure.Practical implicationsIt is recommended for all banks to ensure the integration of a more comprehensive ethical system, such as theological ethical values in every aspect of their business activities. The findings from this study also highlight the necessity for the central bank to increase their monitoring role, especially towards banks with a more concentrated ownership structure by limiting the size of shareholdings by any particular types of owners.Originality/valueOnly a few studies have compared CSR practices between these two types of banks, and most of them are descriptive and qualitative in nature. This study is the first that uses a robust model with a high R-squared value, which control for all possible factors determining CSRD in the banking sector.

scholarly journals The Impact of Financial Performance on Corporate Social Responsibility: An Empirical Analysis of Conventional and Islamic Banks of Pakistan

2018 ◽  
Vol 2 (2) ◽  
pp. 01-18
Author(s):  
Ummara Fatima ◽  
Uzma Bashir
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Banking Sector ◽  
Annual Reports ◽  
Islamic Banks ◽  
Conventional Banks ◽  
Corporate Social ◽  
The Impact ◽  
The Relationship

The study explores how financial performance (FP) affects the corporate social responsibility (CSR) of the banking sector of Pakistan. Further, it also elaborates the comparison between FP and CSR of Islamic and conventional banks of Pakistan. The study is based on the annual reports of banks listed at Pakistan Stock Exchange (PSE) for the years 2010-2016. The study used several panel data diagnostic tests and three regression models to check the relationship between FP and CSR of Islamic and conventional banks of Pakistan, while taking leverage and size as control variables. The results indicate that in case of conventional banks the relationship between ROE and CSR is negative. Here, the results are consistent with the agency theory which states that investment in CSR related activities is a waste of resources. While return on asset (ROA) is depicting negative and insignificant relationship with CSR, which depicts that FP does not have any impact on the investment in CSR initiatives. In the case of Islamic banks, the relationship between return on equity (ROE) and CSR is positive and significant. Here, the results support social contract and stakeholder theories. The research has important practical consequences that will help the banking industry managers to adopt optimal investment strategies about CSR related activities. The study provides guidelines to conventional banks to invest more in CSR in the same way Islamic banks are doing. The findings of the study lay some foundations upon which a more detailed analysis of CSR of banks could be based.

Linkage between corporate governance and corporate social responsibility in banking sector of Bangladesh

2015 ◽  
Vol 02 (04) ◽  
pp. 1550036 ◽  
Author(s):  
Syed Moudud-Ul-Huq
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Banking Sector ◽  
Islamic Banks ◽  
Return On Equity ◽  
Earnings Per Share ◽  
Conventional Banks ◽  
Corporate Social ◽  
Better Than

This paper has been made to analyze the linkage between corporate governance and corporate social responsibility. From analysis, it is found that Eastern Bank Ltd. (EBL) performs better than other selected banks but not enough in practicing corporate social responsibility. While, conventional banks are more imperative than Islamic banks as all the indicators cover its benchmark apart from return on total assets. It has proved that there is a significant relationship among return on equity, earnings per share, corporate governance and corporate social responsibility but corporate social responsibility has shown little impact on corporate performance.

Disclosure of corporate social responsibility (CSR) and its implications on company value as a result of the impact of corporate governance and profitability

2020 ◽  
Vol 62 (4) ◽  
pp. 339-354
Author(s):  
Kamaliah Kamaliah
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Firm Value ◽  
Partial Least Square ◽  
Least Square ◽  
Content Type ◽  
Csr Disclosure ◽  
Corporate Social ◽  
The Impact

Purpose The purpose of this study is to examine the effect of corporate governance and corporate profitability on firm value with corporate social responsibility (CSR) disclosure as the intervening variable. Design/methodology/approach The population of this study was all companies listed in the LQ 45 Index group in the Indonesia Stock Exchange in 2013-2014. The inferential statistics used in this study applied the partial least square (PLS) based structural equation model (SEM) method with the assistance of SmartPLS 2.0. The PLS method was selected based on the consideration that there was a construct formed with reflective indicators in this study. Findings From the results of this study, it can be concluded that corporate governance does not have any effect on CSR disclosure, profitability of company has an effect on CSR disclosure, CSR disclosure has an effect on firm value. In addition, CSR disclosure does not mediate the effect of on firm value. These results showed that corporate governance can have an effect on firm value directly, and there is no role of CSR disclosure in mediating the effect of corporate governance on firm value, and profitability of company has an effect on firm value through CSR disclosure. Originality/value The originality of this research is on the reason that many studies that have been conducted still indicated the inconsistency in the results and diversity of the indicators, so that a similar research was conducted by involving the indicators used for measuring the corporate governance variable, which were the proportion of independent commissioners and audit committee. Meanwhile, for the profitability variable, return on assets and return on equity were used as the indicators.

Earnings management, financial performance and the moderating effect of corporate social responsibility: evidencefrom France

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Salma Chakroun ◽  
Anis Ben Amar ◽  
Anis Ben Amar
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Earnings Management ◽  
Financial Performance ◽  
Moderating Effect ◽  
Least Square ◽  
Content Type ◽  
Academic Researchers ◽  
Corporate Social ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of earnings management on financial performance. In addition, the authors investigate whether corporate social responsibility has a moderating effect on the impact of earnings management on financial performance. Design/methodology/approach The empirical study is based on a sample of French companies listed on the CAC-All-Tradable index over the period 2008–2018. Feasible generalized least square regression method is used to estimate the econometric models. Findings Based on panel data of 3,003 French firm-year observations, the authors demonstrate that earnings management has a negative and significant impact on financial performance. Indeed, corporate social responsibility moderates positively the negative impact of earnings management on financial performance in the French context. Practical implications The findings have several implications for regulatory, investors and academic researchers. For regulators, it is appropriate to promote more several standards related to corporate social responsibility and earnings management. For investors, considering societal issues is very important in making decisions. For academic researchers, the results show that it is important to discover how corporate social responsibility can influence the relation between earnings management and financial performance. Originality/value The existing literature has generally focused on the impact of earnings management on financial performance and the empirical tests did not yield similar results. The study shows that corporate social responsibility has a moderating role in determining the impact of earnings management on financial performance.

Corporate social responsibility reporting practices in banking companies in Bangladesh

2015 ◽  
Vol 13 (2) ◽  
pp. 200-225 ◽  
Author(s):  
Md. Hafij Ullah ◽  
Mohammad Afjalur Rahman
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Banking Sector ◽  
Annual Report ◽  
Regulatory Change ◽  
Content Type ◽  
Reporting Practices ◽  
Csr Reporting ◽  
Corporate Social ◽  
The Impact

Purpose – This paper aims to provide a deeper understanding of the nature and extent of corporate social responsibility (CSR) reporting in the annual report by banking companies in Bangladesh, identify the impact of regulatory change on CSR reporting and examine whether there is any relationship between the extent of CSR reporting and bank characteristics. CSR movement and CSR reporting practices by financial sector have gathered great momentum in recent years. Banking sector is in the leading position in discharging CSR reporting. Design/methodology/approach – The sample composed of all the 30 banking companies enlisted in Dhaka Stock Exchange (DSE), and the study used content analysis approach for systematic categorization and analysis of the contents reported in the annual report. A total of 97 CSR items classified into seven classes were selected through a relevant literature review, as the expected items and average, standard deviation, coefficient of variation, percentage and correlation, etc. were used as the tools of analysis. SPSS software version 19.0 was used to analyze the data. An ordinary least square (OLS) regression model is fitted to the data for assessing the effect of independent variables on total CSR reporting score. Findings – The study found that the extent of CSR reporting in banking companies in Bangladesh varies from 27.84 to 65.98 per cent, and on an average, they report 47.39 per cent of the expected CSR items in annual report. It is also observed that banking companies in Bangladesh emphasized on linguistic or written form than charts, graphs or pictures in reporting CSR activities to their stakeholders, and the study found no significant influence of the selected bank characteristics on the extent of CSR reporting. Moreover, the study observed significant impact of regulatory change on nature and extent of CSR reporting. Research limitations/implications – The study considered all the listed commercial banking companies in Bangladesh, and the annual report of 2011 was taken as the main source of data. Social implications – Among others, the implications of the study include the following. Banking companies are expected to get a real scenario of CSR reporting of the banking sector in Bangladesh and banking companies with poor CSR contribution expected to be motivated for contributing more in CSR activities. Government and other regulatory bodies can also get detailed information regarding CSR reporting practices for formulating guidelines in this regard. Originality/value – This empirical study on the determinants of extent of CSR reporting using a larger number of expected CSR items contributes toward a better understanding of the CSR reporting practices of the banking companies in Bangladesh. The study used a new independent variable “CSR Expenditure” in justifying its influence on CSR reporting and identified the impact of regulatory change on CSR reporting. The study expects contributing in the enactment of more regulatory requirements for bringing the CSR reporting into a certain framework and encouraging in more CSR reporting in Bangladesh.

Impact of corporate social responsibility on bank’s corporate image

2019 ◽  
Vol 15 (5) ◽  
pp. 710-722 ◽  
Author(s):  
Zainab Al Mubarak ◽  
Anji Ben Hamed ◽  
Muneer Al Mubarak
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Banking Sector ◽  
Corporate Image ◽  
Main Element ◽  
Content Type ◽  
Significant Relationships ◽  
Main Components ◽  
Corporate Social ◽  
The Impact

Purpose The purpose of this study is to investigate the impact of the corporate social responsibility (CSR) on the corporate image in the banking sector. The focus of the study is on four main components of CSR, which are economic, legal, ethical and philanthropic. Design/methodology/approach A model was used in this study to show the impact of different CSR’s factors on corporate image; (240) banks customers were approached using a questionnaire, where (155) responses were received and (144) valid responses entered for analysis. Findings The findings revealed that customers perceive CSR activities as a main element when dealing with banks. The corporate image is strengthened when banks adopt such activities, and positive and significant relationships were statistically found between CSR activities and corporate image. These activities differ in importance as perceived by banks’ customers. Research limitations/implications Enlarging sample size, involving more stakeholders such as employees and managers, and replicating the study in other countries would enrich the findings. Practical implications Banks are advised to consider the study factors in their activities and act as champions of CSR for the welfare of the society to strengthen their corporate image. Originality/value Many studies have discussed the issue of CSR, but very few are found in the Middle East, particularly in Bahrain, and in the banking sector. This paper calls for more investigation in this area for a better understanding of CSR activities and their effects on the corporate image.

The impact of financial performance on corporate social responsibility disclosure: the case of VN100 in Vietnam

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Thinh Quoc Tran
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Positive Impact ◽  
Least Square ◽  
Series Data ◽  
Content Type ◽  
Corporate Social Responsibility Disclosure ◽  
Corporate Social ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of financial performance (FP) on corporate social responsibility disclosure (CSRD) in the top 100 listed enterprises in Vietnam (VN100). Design/methodology/approach This paper uses the ordinary least square method to test and uses time series data of VN100 in five years from 2015 to 2019. Findings The results of this study show that the return on assets and return on equity have a positive impact on CSRD of VN100. Research limitations/implications This paper has not covered all independent variables related to FP. Practical implications The paper contribute to increasing CSRD of VN100. Social implications The paper contribute to raising awareness of businesses about community and society. Originality/value This paper contributes to increase the level of useful information for stakeholders to meet the trend of regional and international integration.

Corporate social responsibility (CSR) practices in Islamic banks of Bangladesh

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Md. Anowar Hossain Bhuiyan ◽  
Md. Abud Darda ◽  
Md. Belal Hossain
Keyword(s):  
Sustainable Development ◽  
Factor Analysis ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Well Being ◽  
Islamic Banks ◽  
Content Type ◽  
Arts And Culture ◽  
Corporate Social ◽  
The Impact

Purpose Corporate social responsibility (CSR) influences an organization in deciding its ethical approaches in the corporate practices and also important to maintain sustainable development. Islamic banks are capturing almost 40% of the total bank account holders in Bangladesh and contributing to the socio-economic and environmental development of the country through their CSR activities. The purpose of this paper is to investigate the impacts of CSR activities of Islamic banks for sustainable development in Bangladesh from the perception of the beneficiaries. Design/methodology/approach This study is based on a questionnaire survey of 200 conveniently selected beneficiaries from five purposively selected Islamic banks in Bangladesh. Respondents’ agreement score for various CSR-related activities has been observed in a five-point Likert scale and, finally, to identify the impact of CSR, exploratory factor analysis has been done. Findings Results revealed that respondents are expressing strong agreement for almost all the activities, and they are much satisfied with ongoing CSR activities by Islamic banks, which implies positive attitudes of beneficiaries regarding CSR activities. The results of factor analysis further confirm the perception of respondents toward CSR activities of Islamic banks in terms of social enhancement, education and health, socio-economic well-being and contemporary arts and culture. Originality/value The Islamic banks should enhance their CSR activities for socio-economic development, provide more allocation in education programs, increase sponsorship in sports events and assist in flourishing Bangladeshi arts and culture.

scholarly journals Relationship between corporate social responsibility performance and disclosures: commercial banks of Bangladesh

2019 ◽  
Vol 15 (4) ◽  
pp. 451-468 ◽  
Author(s):  
Anup Kumar Saha
Keyword(s):  
Regression Analysis ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Commercial Banks ◽  
Policy Development ◽  
Banking Sector ◽  
Least Square ◽  
Government Ownership ◽  
Content Type ◽  
Corporate Social

Purpose The research investigates the determinants of corporate social responsibility (CSR) spending and CSR disclosures by the Bangladeshi commercial banks. In the process, it explains the relationship between CSR disclosures and CSR expenditure by Bangladeshi commercial banks. Design/methodology/approach Legitimacy theory has been used to explain the motivation for such expenditure and disclosure. For purpose of analysing the determinants, ordinary least square (OLS) regression analysis has been used for the first test with CSR expenditures and ordered PROBIT regression analysis has been used for test with CSR disclosures. Findings The result found that CSR expenditure depend on banks’ size, age and government ownership, whilst CSR disclosures depend on CSR expenditure, profitability, age, government ownership and Islamic compliance. Practical implications The practical contribution of this study includes the assistance for the public policy development by providing better understanding of extent and credibility of CSR reporting by the Bangladeshi banking sector. Originality/value The study contributes to the academic literature by presenting preliminary findings from different focus on a developing economy like Bangladesh. The study leads to draw a standard for the developing country to find out the differences compared to developed country.

Corporate social responsibility of Islamic and conventional banks

2019 ◽  
Vol 14 (4) ◽  
pp. 582-600 ◽  
Author(s):  
Elisa Aracil
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Informal Institutions ◽  
Emerging Countries ◽  
Islamic Banks ◽  
Content Type ◽  
Csr Strategies ◽  
Conventional Banks ◽  
Explicit Csr ◽  
Corporate Social

PurposeThe purpose of this paper is to compare the sustainability practices of Islamic and conventional banks, with the aim of evaluating whether their Corporate Social Responsibility (CSR) strategies converge or diverge in response to formal and informal institutions in an emerging country.Design/methodology/approachDrawing on institutional theory, this study contextualizes the competitive scenario through the National Business System (NBS) framework, and showcases the CSR strategies employed by large conventional and Islamic banks in Turkey. CSR patterns are examined from different angles such as motivations, strategy, actions and institutional results.FindingsWithin the same institutional environment, Islamic and non-Islamic banks combine convergent and divergent models to accommodate institutional realities in their CSR policies. Islamic banks exhibit an implicit commitment to CSR that is mostly based on informal institutions, whereas conventional banks use explicit CSR strategies as a means to fill the voids in formal institutions. In addition, philanthropy-oriented CSR prevails in Islamic banks, as opposed to the CSR actions associated with core business that are followed by conventional banks.Social implicationsAn increased focus on formal institutions and explicit CSR actions by Islamic banks may further contribute to social well-being in emerging countries.Originality/valueThis study contributes to the paucity of research, from an institutional perspective, related to CSR practices amongst Islamic and conventional banks in emerging countries.

Sign in / Sign up

Export Citation Format

Share Document