Sustainable Business Practices and Corporate Financial Performance in Indonesian Islamic Banking
Keywords:
financial performance, sustainability practices, Islamic BankingAbstract
This paper examines sustainable business practices and corporate financial performance in Indonesian Islamic Banking (BSI). Periodic sustainability data for the decade of 2020 were collected by this study. For data collection, this study used the weighted content method. Generalized Method of Moments (GMM) statistical test was used for empirical testing. The results of the study found that the relationship between sustainable business practices and financial performance in Islamic Banking as measured from the perspective of shareholders and management was positive, while the subject chain measured from a market perspective was found to be insignificant. This implies that Islamic banking market stakeholders are reluctant to spend their banks on sustainable business practices. Interestingly, the insignificant relationship between sustainable business practices and market performance becomes significant for managerial ownership. This shows that the managerial ownership relationship gives market stakeholders confidence in Islamic banks to obtain higher financial returns through sustainable business practice initiatives. These results may provide insight for several Islamic banking industry policy makers about integrating important sustainability practices into business models in Islamic Banking. It provides a roadmap for the Islamic banking industry in Indonesia.
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Copyright (c) 2022 International Journal of Comparative Accounting And Management Science (IJCAMS)
This work is licensed under a Creative Commons Attribution 4.0 International License.
International Journal of Comparative Accounting And Management Science (IJCAMS)
© 2022
This work is licensed under a Creative Commons Attribution 4.0 International License
