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Does corporate social sustainability influence on business environment? Impact of corporate governance on distance to default of Sukuk issuers in Islamic banks

Author

Listed:
  • Li, Xintong
  • Rehman, Awais Ur
  • Toma, Smaranda
  • Jaradat, Mohammad
  • Lv, Xinyu
  • Mihai, Daniela Melania
  • Spinu, Adina Eleonora
  • Shabbir, Malik Shahzad

Abstract

Malaysia has emerged as a global hub for Sukuk. But on the parallel, the Malaysian sukuk market has undergone many defaults and facing massive competitive pressure. In this scenario, the precautionary tools to mitigate the default risk must be explored. This study analyzed the impact of corporate governance (CG) on corporate social sustainability (CS) and the distance to default of Sukuk issuers (DD) to investigate the mitigating effect of these variables and the mediating role of CS. The results are robust across alternative measures for the variables and robust against different econometric tests. The implication of this study encouraged the inclusion of female directors and their empowerment due to their positive impact on DD and CS.

Suggested Citation

  • Li, Xintong & Rehman, Awais Ur & Toma, Smaranda & Jaradat, Mohammad & Lv, Xinyu & Mihai, Daniela Melania & Spinu, Adina Eleonora & Shabbir, Malik Shahzad, 2024. "Does corporate social sustainability influence on business environment? Impact of corporate governance on distance to default of Sukuk issuers in Islamic banks," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 520-528.
    • Handle: RePEc:eee:reveco:v:93:y:2024:i:pa:p:520-528
    DOI: 10.1016/j.iref.2024.03.002
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    Keywords

    Sukuk; Distance to default; Credit risk; Corporate governance; Corporate social sustainability;
    All these keywords.

    JEL classification:

    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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