Multi-Disclosures in the Context of National Cultures: Evidence from Islamic Banks

Abstract

The authors measure the impact of culture on Sharia; Social and Financial Disclosure (SSFD) of Islamic Banks (IBs) around the world.

Content analysis is used to measure levels of disclosure for a sample of 136 IBs of 25 countries for years 2013 and 2014. Different cultural measures are used. These include secrecy/transparency as suggested by Gray (1988) and Hofstede (1980, 1983, 2001, 2010)’s culture dimensions which include: Power Distance; Individualism; Masculinity; Uncertainty Avoidance; Long-Term Ordination and Indulgence. Ordinary least square (OLS) regression is used to test the research hypotheses.

After controlling bank-specific, corporate governance and country characteristics, the authors found that Hofstede’s culture dimensions have a significant impact on SSFD. They also found that Gray's transparency dimension positively influence levels of sharia, social and aggregated disclosure. Therefore, they conclude that culture influences levels of disclosure in IBs.

This study has policy implications for managers and regulators of Islamic banking industry.

This study is the first to use both Gray and Hofstede models in the context of IBs around the world. It also the first to explore the impact of culture on three different disclosure levels for IBs.

Citation

El-Halaby, S., Hussainey, K. and Al-Maghzom, A. (2017), "Multi-Disclosures in the Context of National Cultures: Evidence from Islamic Banks", Advances in Accounting Behavioral Research (Advances in Accounting Behavioural Research, Vol. 20), Emerald Publishing Limited, Leeds, pp. 117-157. https://doi.org/10.1108/S1475-148820170000020005