Exploring the mechanism of consumer responses to CSR activities of Islamic banks

Abstract

Purpose Drawing on social identity theory, the purpose of this paper is to propose and test a conceptual framework of the mechanism of customer response toward corporate social responsibility (CSR) initiatives of Islamic banks. Design/methodology/approach A survey was completed by 203 customers of Islamic banks in Bahrain. Structural equation modeling, was used to test the hypotheses. Findings Islamic ethics fit partially mediates the relationship between CSR initiatives and consumer-bank identification (CBI) which in turn contributes positively to customer advocacy. These findings emphasize the importance of CSR practices compliance with Islamic ethics principles for customers to identify with and advocate Islamic bank. Research limitations/implications Understanding the mechanism of customers’ responses toward CSR initiatives of Islamic banks provides insights into the complexities of Islamic bank customers’ perceptions of CSR initiatives. The successful introduction of a mediating variable, namely, Islamic ethics fit suggests future research opportunities. Originality/value Much of the value of the present work is because of the findings regarding the relationship between CSR and customer responses. The originality of this study lies in being the first research examining the mediating role of Islamic ethics fit to the relationship between CSR initiatives and CBI which in turn enhances Islamic banks’ advocacy.