Ethical Values Reflected on Zakat and CSR: Indonesian Sharia Banking Financial Performance

Robiatul Auliyah, Basuki Basuki

Research output: Contribution to journalArticlepeer-review

12 Citations (Scopus)

Abstract

The objective of this study is to identify the effects of ethical values reflected on zakat and Corporate Social Responsibility (CSR) on the financial performance of sharia banking in Indonesia. This study contributes to the Indonesia Financial Service Authority (Otoritas Jasa Keuangan (OJK) policies concerning the need for implementing ethical values in sharia banking and other sharia financial entities based on the philanthropic model, this study posits that firms undertaking zakat and charity are ethical firms. The population of this study is 8 sharia banks listed on the Indonesia Stock Exchange (IDX) in 2014-2018. The result of the study showed that zakat disclosure significantly affected financial performance. Moreover, ethical values that were proxied by CSR disclosure did not significantly affect financial performance. The limitation of the study is the limited number of the sample; therefore, it is expected that the future research adds other sharia financial entities and adds the dimension of management, sustainability, product, and the environment as benchmarks of ethical values. The originality of this study offers an additional explanation of the relationship between ethical values and performance by investigating zakat and CSR disclosure which is a unique factor in Indonesia.

Original languageEnglish
Pages (from-to)225-235
Number of pages11
JournalJournal of Asian Finance, Economics and Business
Volume8
Issue number1
DOIs
Publication statusPublished - 2021

Keywords

  • Corporate Social Responsibility
  • Ethical Values
  • Financial Performance
  • Zakat Disclosure

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