The relationship between corporate social responsibility and financial performance in the practices of conventional and Islamic commercial banks in the Pakistan banking system
DOI:
https://doi.org/10.14267/VEZTUD.2024.03.04Keywords:
corporate social responsibility (CSR), Islamic bank, CSR report, financial performanceAbstract
The authors’ study explored the incorporation of the CSR concept followed by Western banks into the practice of Islamic-based dual banking. Their empirical research covered the listed commercial banks in Pakistan. They studied the CSR activities and their disclosure in reports of listed commercial banks in Pakistan during the period 2008–2018 and how they affected the financial performance of the banks. The results of the study revealed that the disclosure of CSR increased by an average of 15 percentage during the period under study: from 56.48% to 71.06%. The results of the study confirm that banks that consciously engage in CSR activities and communicate this appropriately achieve better financial performance. However, disclosure of CSR information has no significant impact on the market valuation of listed banks, as measured by Tobin’s Q ratio.
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