| dc.description.abstract | Purpose – This study aims to analyze the relationship between Islamic governance (IG) and leverage and examine
the interaction of corporate social responsibility disclosure (CSRD) in the relationship between IG and leverage.
Design/methodology/approach – This study used 444 observational data comprising Asian, European and
African Islamic banks (IBs) and analyzed using the regression analysis method to answer the research hypothesis.
Findings – This study finds that IG had a significant positive effect on leverage, indicating that it can
increase the leverage of IBs. In other words, IG boosts the public confidence to entrust their funds to IBs
through current accounts and savings. However, this study shows that CSRD weakens the relationship
between IG and leverage. In addition, this study includes the control variables of board size, Islamic
supervisory board size and company size, where all three variables showed their effect on leverage. These
results were obtained through additional analysis by categorizing our sample based on CSRD.
Research limitations/implications – The results of this study show that IG significantly positively
affects IB leverage globally. This can be used as a basis for policymakers to include the ICG variable in
analyzing IBs leverage. The weakness of this study is the use of IG variables based on disclosure so that IG
components that affect leverage cannot be analyzed accurately. Future research can use the IG variable by
using specific IG component values such as the number of meetings, member attendance and remuneration of
SSB members in analyzing IB leverage globally.
Originality/value – To the best of the authors’ knowledge, this research is the first study to discuss the
interaction of CSRD with IG on leverage in Islamic banking in Asia, Europe and Africa, thus adding to the
existing literature on Islamic banking | en_US |
