Corporate Social Responsibility, Shariah-Compliance, and Earnings Quality
M. Shahid Ebrahim and
Aziz Jaafar ()
Additional contact information
Abdullah Alsaadi: Umm Al-Qura University
M. Shahid Ebrahim: Durham University
Aziz Jaafar: Bangor University
Journal of Financial Services Research, 2017, vol. 51, issue 2, 169-194
Abstract This study examines the effect of two potential sources of ethical principles on earnings quality: corporate social responsibility (CSR) and membership in a Shariah index. We define membership in a Shariah index as the adherence to an ethical code that relates to Islam. Our sample comprises firms in ten European Union countries for the period from 2003 to 2013. The empirical results show that firms with a high degree of CSR are less likely to manage earnings. In contrast, membership in a Shariah index leads to earnings manipulation. Our results are robust after using several alternative quality metrics for earnings. Furthermore, our empirical results indicate that highly rated CSR firms that are not Shariah-compliant are less likely to engage in earnings manipulation. Further, institutional factors are also important in determining the link between CSR, Shariah-compliance, and the quality of financial reporting.
Keywords: Corporate social responsibility; Shariah-compliant investments; Earnings quality; G30; M14; M41 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s10693-016-0263-0 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:kap:jfsres:v:51:y:2017:i:2:d:10.1007_s10693-016-0263-0
Ordering information: This journal article can be ordered from
Access Statistics for this article
Journal of Financial Services Research is currently edited by Haluk Unal
More articles in Journal of Financial Services Research from Springer, Western Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().