Corporate social performance and financial stability: evidence from Islamic, social and conventional banking models

Mohamed Sultan, Syed Alwi and Wan Ahmad, Wan Marhaini and Ismath Bacha, Obiyathulla and Ramlee, Roslily (2024) Corporate social performance and financial stability: evidence from Islamic, social and conventional banking models. Journal of Islamic Monetary Economics and Finance, 10 (4). pp. 811-840. ISSN 2460-6146 E-ISSN 2460-6618

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Abstract

This paper addresses two key issues in Corporate Social Performance (CSP) research. First, it investigates the impact of CSP on Financial Stability (FS), and second, it examines the influence of different banking models on the relationship between CSP and FS. Using a cross-country sample of 117 financial institutions from 36 countries over an 8-year period (2013-2020) and the System Generalized Method of Moments (GMM) estimation method, it finds that banking models significantly affect the CSP-FS relationship. This is attributed to diminishing marginal benefits of economic growth beyond a certain level of financial intermediation, which increases financial risk. The results give new insights into the synergies and divergences between different banking models and the overarching goals of social performance and financial stability. This research contributes novel insights that can inform policymakers, regulators, and industry stakeholders in their quest for a more resilient and sustainable banking sector.

Item Type:	Article (Journal)
Additional Information:	4738/117898
Uncontrolled Keywords:	Corporate social performance, CSP index, Financial stability, Islamic banking, Social banking, Values-based banking
Subjects:	H Social Sciences > HG Finance > HG1501 Banking H Social Sciences > HG Finance > HG3368 Islamic Banking and Finance
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Economics and Management Sciences > Department of Finance Kulliyyah of Economics and Management Sciences
Depositing User:	Dr. Roslily Ramlee
Date Deposited:	14 Jan 2025 12:31
Last Modified:	14 Jan 2025 12:36
URI:	http://irep.iium.edu.my/id/eprint/117898

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