Determinants of Islamic social reporting in Islamic banks of Pakistan
International Journal of Law and Management
ISSN: 1754-243X
Article publication date: 4 August 2020
Issue publication date: 4 January 2021
Abstract
Purpose
This study aims to spotlight and explore various determinants of Islamic social reporting (ISR) in Islamic banks of Pakistan.
Design/methodology/approach
The authors have used firm size, firm profitability, firm age, board size and board independence as determinants of ISR. The authors collected data from Islamic banks listed on Pakistan Stock Exchange for the period 2012–2019. Multiple estimation techniques, i.e. fixed effect model, random effect model and one-step difference generalized method of moment (GMM), have been applied.
Findings
Random effect model was found to be more robust as compared to fixed effect model and one-step difference GMM. The results reported by the random effect model, preferred among the three, show that firm size, firm profitability, firm age and board size are important determinants of ISR in Islamic banks of Pakistan, while board independence does not determine social reporting for Islamic banks in Pakistan. Although social reporting in annual reports of Islamic banks in Pakistan is increasing, further improvement and compliance is required to ensure accountability and transparency in financial reporting as recommended by Islamic teachings. The study has certain managerial implications, especially for top management of Islamic banks.
Originality/value
To the best of the authors’ knowledge, this study is the first to discuss determinants of ISR in Islamic banks of Pakistan. The developed framework herein provides a precise guideline for Islamic banking to enhance their performance, which has never been discussed before.
Keywords
Acknowledgements
The authors would also like to show their gratitude to the Editor of the journal for his cooperation, patient and immediate responses. The authors thank “anonymous” reviewers for their so-called insights. We are also immensely grateful for their invaluable comments to improve the manuscript.
Citation
Hussain, A., Khan, M., Rehman, A., Sahib Zada, S., Malik, S., Khattak, A. and Khan, H. (2021), "Determinants of Islamic social reporting in Islamic banks of Pakistan", International Journal of Law and Management, Vol. 63 No. 1, pp. 1-15. https://doi.org/10.1108/IJLMA-02-2020-0060
Publisher
:Emerald Publishing Limited
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