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Jurnal Ekonomi Malaysia

54 (2) 2020 77 – 90

Islamic Banking and Income Inequality: The Role of Corporate Social Responsibility
Perbankan Islam dan Ketaksamaan Pendapatan: Peranan Tanggungjawab Sosial Korporat

School of Management
Universiti Sains Malaysia,
11800 Penang, MALAYSIA.

nanurulmohamad@gmail.com

School of Management
Universiti Sains Malaysia,
11800 Penang, MALAYSIA.

tams@usm.my

Faculty of Economics and Business,
Universitas Brawijaya
Jl. MT. Haryono 165,
Malang 65145, INDONESIA.

risna@ub.ac.id

Universiti Teknologi MARA
Kampus Sungai Petani
08400 Merbok, Kedah, MALAYSIA.

muslimah_mohdjamil@yahoo.com

Abstract

The objective of this study is to analyse whether engaging more actively in corporate social responsibility (CSR) enhances the effectiveness of Islamic banks in narrowing income inequality in the selected Organization of Islamic Cooperation (OIC) countries. Both fixed-effect and random-effect models representing static model as well as generalized method of moments approach of dynamic model are employed to estimate the sample of 24 OIC countries for the period from 2006 to 2013. The results suggest that Islamic banking has potential to reduce income inequality via Islamic financing and CSR further helps to reduce income inequality. In addition, the findings suggest that Islamic financial institutions able to reduce income inequality further if they actively engage in CSR. However, small size of CSR activities is unlikely to be effective in reducing income inequality..

Keywords

corporate social responsibility; dynamic model; Islamic banks; OIC countries

Author’s Acknowledgement

The second author would like to thank Ministry of Higher Education Malaysia for funding this project under the Fundamental Research Grant Scheme (FRGS)
No. 203/PMGT/67115.

http://dx.doi.org/10.17576/JEM-2020-5402-7
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Mohamad, , Masron, , Widiyanti, , & Mohd Jamil, (2020). Islamic Banking and Income Inequality: The Role of Corporate Social Responsibility. Jurnal Ekonomi Malaysia, 54(2), 77–90. http://dx.doi.org/10.17576/JEM-2020-5402-7

@article{mohamad2020islamic,
  title={Islamic Banking and Income Inequality: The Role of Corporate Social Responsibility},
  author={Mohamad, Nurul Muna and Masron, tajul and Widiyanti, Risna and Mohd Jamil, Muslimah},
  journal={Jurnal Ekonomi Malaysia},
  volume={54},
  number={2},
  pages={77—90},
 

year={2020},
}

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