Slack Resources and Financial Performance: The Mediating Role of Corporate Zakat

Nurul Fatma Aziz, Rosiati Ramli, Amizawati Mohd Amin and Hairunnizam Wahid
Additional contact information
Nurul Fatma Aziz: Faculty of Accountancy, University Technology MARA
Rosiati Ramli: Faculty of Economic and Management, University Kembangan Malaysia
Amizawati Mohd Amin: Faculty of Economic and Management, University Kembangan Malaysia
Hairunnizam Wahid: Faculty of Economic and Management, University Kembangan Malaysia

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 2, 1087-1096

Abstract: This research uses structural equation modelling to examine the financial connections related to corporate zakat among 142 zakat-paying companies. These companies include privately owned businesses by Muslim owners, public companies mainly within Islamic Financial Institutions, and Shariah-listed companies. The zakat payments are predominantly made to zakat institutions (ZI), with six institutions from six Malaysian states agreeing to share their data. While zakat is mandatory for individual Muslims, the responsibility for corporate zakat lies with the company’s management, based on the concept of a legal entity (Sakiyah utibaprilat), allowing companies to fulfil obligations on behalf of the owners. However, less than 17% of companies pay zakat to the ZI (Adibah Ab Wahab, 2016). Therefore, this study aims to explore the motivations that lead companies to pay zakat, which can be used by the ZI to encourage more companies to do so. This study also highlights the importance of surplus resources for companies to engage in additional voluntary actions, despite zakat being primarily based on the company’s wealth, mainly consisting of current assets. The results indicate that surplus resources significantly influence a company’s zakat commitment, and this commitment, in turn, affects the company’s financial performance. The findings support the accepted perspective that corporate zakat is part of a company’s social responsibility. Furthermore, the findings highlight that achieving financial success facilitates philanthropic actions, and engaging in charitable endeavor’s contributes to a company’s financial success.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.rsisinternational.org/journals/ijriss/ ... ssue:2/1087-1096.pdf (application/pdf)
https://rsisinternational.org/journals/ijriss/arti ... -of-corporate-zakat/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bcp:journl:v:9:y:2025:i:2:p:1087-1096

Access Statistics for this article

International Journal of Research and Innovation in Social Science is currently edited by Dr. Nidhi Malhan

More articles in International Journal of Research and Innovation in Social Science from International Journal of Research and Innovation in Social Science (IJRISS)
Bibliographic data for series maintained by Dr. Pawan Verma ().