Search Results (4)

This study investigates the impact of environmental, social, and governance (ESG) disclosure on value creation in a balanced panel of 100 non-financial Sharia-compliant firms listed on the Saudi Stock Exchange over the period 2014–2023. The analysis employs a combination of econometric techniques, including fixed effects models with Driscoll–Kraay standard errors, Pooled Ordinary Least Squares (POLS) with Driscoll–Kraay standard errors and industry and year dummies, and two-step system generalized method of moments (GMM) estimation to address potential endogeneity and omitted variable bias. Value creation is measured using Tobin’s Q (TBQ), Return on Assets (ROA), and Return on Equity (ROE). The models also control for firm-specific variables such as firm size, leverage, asset tangibility, firm age, growth opportunities, and market capitalization. The findings reveal that ESG disclosure has a positive and statistically significant effect on firm value across all three performance measures. Furthermore, firm size significantly moderates this relationship, with larger Sharia-compliant firms experiencing greater value gains from ESG practices. These results align with agency, stakeholder, and signaling theories, emphasizing the role of ESG in enhancing transparency, reducing information asymmetry, and strengthening stakeholder trust. The study provides empirical evidence relevant to policymakers, investors, and firms striving to achieve Saudi Arabia’s Vision 2030 sustainability goals. Full article

This study aims to explore social reporting by Islamic banks (IB) (referred to as Islamic social reporting, ISR, hereafter) through two streams, i.e., its determinants and consequences on firm performance. Using annual report data from 90 samples of the world’s IB from 2016–2020, this study focuses on the sharia governance implementation through the role of the Sharia Supervisory Board (SSB). The SSB was measured by individual characteristics and IG-Score, representing a combination of dichotomous characteristics of the SSB, which have not been encountered in previous studies. Firm performance as a consequence of disclosure was determined by a more comprehensive approach based on accounting and the stock market. The study’s findings demonstrate the SSB’s beneficial influence on ISR, suggesting that the presence of an SSB can promote ISR practices. Social reporting has been found to have a negative impact on ROA, but it has a positive impact on MTBV and Tobin’s Q. The data suggest that while voluntary reporting practices may cause a short-term decline in profitability, they can have a positive impact on an enterprise’s long-term value. Full article

This study investigates the effect of sharia firms on the cost of debt in the Indonesian market. We use OLS regression to examine the relationship by applying 1870 data observations of nonfinancial companies registered on the Indonesia Sharia Stock Index (ISSI) during 2012–2018. We found that sharia firms are negatively related to the cost of debt, and sharia firms with a higher percentage of independent commissioners are not associated with the cost of debt. These findings indicate that a more significant number of independent commissioners sitting on the board will not stimulate a sharia firm’s position to get a lower cost of debt. Furthermore, our results are robust after performing the endogeneity test. Based on this study, we suggest that independent commissioners who represent aspects of governance also need to be developed using firm characteristics as other moderating variables. Sharia firms are viewed by lenders as having corporate behaviors that are ethical and worthy to get low interest on the debt. Even though the financial structure of sharia firms has lower leverage than non-sharia firms, it does not mean that they are seen as closed firms. Full article

Despite twenty-first century research advances regarding the role of Islam in Shakespeare’s plays, questions remain concerning the extent of William Shakespeare’s knowledge of Muslim culture and his use of that knowledge in writing Othello. I suggest that the playwright had access to numerous sources that informed his depiction of Othello as a man divided between Christian faith and Islamic duty, a division which resulted in the Moor’s destruction. Sharia, a code of moral and legal conduct for Muslims based on the Qur’an’s teachings, appears to be a guiding force in Othello’s ultimate quest for honor. The advance of the Ottoman Empire into Europe with the threat of conquest and forced conversion to Islam was a source of fascination and fear to Elizabethan audiences. Yet, as knowledge increased, so did tolerance to a certain degree. But the defining line between Christian and Muslim remained a firm one that could not be breached without risking the loss of personal identity and spiritual sanctity. Denizens of the Middle East and followers of the Islamic faith, as well as travel encounters between eastern and western cultures, influenced Shakespeare’s treatment of this theme. His play Othello is possibly the only drama of this time period to feature a Moor protagonist who wavers between Christian and Muslim beliefs. To better understand the impetus for Othello’s murder of his wife, the influence of Islamic culture is considered, and in particular, the system of Sharia that governs social, political, and religious conventions of Muslim life, as well as Othello’s conflicting loyalties between Islam as the religion of his youth, and Christianity, the faith to which he had been converted. From Act I celebrating his marriage through Act V recording his death, Othello is overshadowed by fears of who he really is—uncertainty bred of his conversion to Christian faith and his potential to revert to Islamic duty. Without indicating Sharia directly, Shakespeare hints at its subtle influence as Othello struggles between two faiths and two theologies. In killing Desdemona and orchestrating Michael Cassio’s death in response to their alleged adultery, Othello obeys the Old Testament injunction for personal sanctification. But in reverting to Muslim beliefs, he attempts to follow potential Sharia influence to reclaim personal and societal honor. Full article