Islamic Governance, National Governance, and Bank Risk Management and Disclosure in MENA Countries

Elamer, A, Ntim, C and Abdou, HAH ORCID: https://orcid.org/0000-0001-5580-1276 (2020) Islamic Governance, National Governance, and Bank Risk Management and Disclosure in MENA Countries. Business and Society, 59 (5). pp. 914-955. ISSN 0007-6503

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Abstract

We examine the relationships among religious governance, especially Islamic governance quality (IGQ), national governance quality (NGQ), and risk management and disclosure practices (RDPs), and consequently ascertain whether NGQ has a moderating influence on the IGQ-RDPs nexus. Using one of the largest datasets relating to Islamic banks from 10 Middle East and North Africa (MENA) countries from 2006 to 2013, our findings are three-fold. First, we find that RDPs are higher in banks with higher IGQ. Second, we find that RDPs are higher in banks from countries with higher NGQ. Finally, we find that NGQ has a moderating effect on the IGQ-RDPs nexus. Our findings are robust to alternative RDPs measures and estimation techniques. These results imply that the quality of disclosure depends on the nature of the macro-social level factors, such as religion that have remained largely unexplored in business and society research, and therefore have important implications for policy-makers.