Disclose the Impact: How Bank-Specific and Macroeconomic Factors Affect Islamic Social Reporting

Abstract

This study examines the influence of bank-specific factors and macroeconomic factors on Islamic Social Reporting at Islamic banks in Indonesia. Using quantitative methods and data from 41 observations, this study evaluates the effect of firm size (SIZE), growth (Growth), Return on Assets (ROA), firm age (AGE), gross domestic product (RGDPG), and inflation rate (INFLATION) on Islamic Social Reporting as measured by the Islamic Social Reporting (ISR) index. The findings show that growth (Growth), company age (AGE), and gross domestic product (RGDPG) have no significant impact on Islamic Social Reporting. In contrast, company size (SIZE) and Return on Assets (ROA) have a positive effect on Islamic Social Reporting. While the inflation rate (INFLATION) has a negative effect on Islamic Social Reporting. These results indicate that the growth and age of the company do not guarantee the implementation of good Islamic Social Reporting, as well as the level of gross domestic product that does not affect the disclosure of Islamic Social Reporting. This study considers high levels of profitability and size in better Islamic Social Reporting disclosure and keeps the inflation rate more stable. This study provides valuable insights for policy makers and bank management in the Islamic financial sector in Indonesia and highlights the need for further exploration of bank-specific factors along with macroeconomic factors and their impact on Islamic Social Reporting.