What drives the level of social reporting disclosure at Islamic commercial banks?

Abstract

This study analyzes the factors driving the level of Islamic social reporting. Based on the literature review, it was revealed that the lack of consensus from the drivers of Islamic reporting disclosure in Islamic banks, especially in Indonesia, is different from disclosure in conventional banks where there is a lot of consensus. Empirical analysis uses panel data collection from 12 Islamic commercial banks in Indonesia from 2010 to 2022. To estimate the relationship between variables, EViews 12 is used. The control variables used in this study are profitability and size of Islamic banks. The results of the study show that sharia governance has not been empirically proven to be able to encourage the extent of Islamic social reporting in Islamic banks. The results of the study did not find empirical evidence that the performance of maqashid sharia related to educating individuals and establishing justice is not a driver that has an impact on the reach of Islamic social reporting. However, the performance of maqashid sharia in the form of promoting welfare through the amount of zakat funds channeled by Islamic banks has been proven empirically to influence the extent of Islamic social reporting. ROE and ROA have no significant effect on Islamic social reporting, while the size of Islamic banks has a positive and significant effect on the extent of Islamic social reporting of Islamic banks in Indonesia.