Ethical Identity Disclosure; Its Determinants and Effects on Profitability
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Date
2021-04-30
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Publisher
UMT.Lahore
Abstract
Islamic Banks are established and run in the light of the principles of Islam and Islamic law i.e.
Shariah. It is also pertinent for Islamic Banks to communicate their information to them
shareholders and stakeholders to show them at what level they are in communicating voluntary
ethical identity disclosures, which corporate governance factors influence the ethical identity
disclosures and eventually how much effect EID has on the profitability of the Islamic Banks.
This thesis investigates the ethical identity disclosure: 1) it is determining factors and 2) the
impact it has on the profitability of Islamic Banks. Using a sample of full-fledged Islamic banks
from Pakistan, Bangladesh and Malaysia (2012-2018), panel regression with fixed effect was
applied on the regression models in which the first step has board size, board independence and
Shariah Supervisory Board are independent variables and ethical identity index is the dependent
variable. Whereas, in the next step the equations consist of ethical identity index as independent
variable and ROE are the dependent variable. The empirical calculations show that SSB has a
significant positive relationship with ethical identity disclosures, while board size and board
independence have no influence on ethical identity disclosure. Ethical identity disclosure
significantly impact ROE. The association is positive i.e. an increase in ethical identity
disclosure also increases ROE. Lastly, Pakistan has the highest percentage of ethical identity
disclosure (68%) among the three countries.