مقاله انگلیسی رایگان در مورد آیا برچسب اسلامی عملکرد خوب محیطی، اجتماعی و حاکمیت را نشان می دهد – الزویر 2021

Abstract

Jel classifications

Keywords

1. Introduction

2. Literature review

2.1. Empirical findings on SRI and islamic finance

2.2. Corporate governance, ESG, and performance

3. Data and methodology

3.1. Data and sample

3.2. Empirical models

4. Empirical results and discussions

5. Robustness test

5.1. Split sample based on size

5.2. Split sample based on the period

6. Conclusion and recommendations

Appendix A. Supplementary data

References

Abstract

This study empirically investigates the effect of an Islamic label on environmental, social, and governance (ESG) performance. Islamic firms in Indonesia and Malaysia that are characterized by lower debt and lower non-sharia compliant income and have a higher ethical standard are expected to make a better contribution to the environment and society. Testing firms in Indonesia and Malaysia, two emerging countries in ASEAN (Association of Southeast Asian Nations), reveals a significant difference in overall environmental and social performance, but not in governance quality. Also, the study documents the significant effect on performance of using Islamic criteria for leverage, accounts receivable, and cash. Overall, after controlling for some variables and splitting the sample into different time horizons and firm sizes, the study consistently reveals that firms labeled as Islamic have better environmental and social performance, but not governance performance. The relevant policies should be adjusted.

1. Introduction

Environmental, social and governance (ESG) factors are considered important in fulfilling corporate social responsibility. This also applies to Islamic firms, which must pay greater attention to ESG issues (Bennett & Iqbal, 2013; Masih et al., 2018; Moghul & Safar-Aly, 2014). In 2015, as reported by the Global Sustainable Investment Alliance (2015), approximately $21.4 trillion was invested and managed for socially responsible investment (SRI) purposes in 2014. The assets under management (AUM) increased by over 60 percent with conventional strategies. Europe had the highest cumulative total investment, $13.61 trillion, and the US shows a rapid progression of 74 percent per year even though the benchmark is only 50 percent. Most SRI is by institutional investors, rather than retail investors. However, retail investors are becoming more interested in SRI.

Whether conventional or Islamic, investment strategies depend on two main types of information: fundamental information and technical information. Fundamental information includes financial statements, the rate of firm growth, and key financial highlights of the company, whereas technical information come from the company’s past performance or momentum, depicted in graphs. Although these two types of information remain the most useful for investment, investors seek other ways to distinguish firm performance that does not use a risk and returns perspective, that is, SRI (Erragragui & Revelli, 2016).