Capital Structure, Organizational Slack and Sustainability Reporting In Islamic Bank of Indonesia, Qatar and Bahrain

Abstract

This research aims to analyze the effects of capital structure and organizational slack on sustainability reporting in Islamic banks of Indonesia, Qatar, and Bahrain. The capital structure variable consists of leverage and investment account holders, while the organizational slack variable consists of available slack and recoverable slack. Analysis content that used to measure the disclosure of sustainability reporting based on the AAOFII index consisting of 78 items. The observation data used were 120 observations consisting of 26 Islamic banks on Indonesia, Qatar, and Bahrain for the period 2014 to 2018 with a purposive sampling method. The results showed that there was a positive influence between leverage and a negative effect between investment account holders on sustainability reporting. This study also found a positive relationship between available slack and there was no significant effect between recoverable slack on sustainability reporting.

Implementation of Risk Management and Capital Structure on Financial Performance: A Study of Islamic Banking in Indonesia

“…The contribution of Islamic banks in improving the welfare of the community has an important role because the higher the income received, the higher the zakat issued by Islamic banks (Satibi et al, 2018). Improvement of Islamic banking in terms of social and environmental responsibility will create an image of the bank in the eyes of stakeholders and a view of social and environmental Islam (Niswah & Falikhatun, 2018) According to Darmawi (2011), several risks are often faced by banks, including credit risk with NPL (NonPerforming Loan) indicator, whereas in Islamic banks, it is called NPF (NonPerforming Financing), liquidity risk with LDR (Loan to Deposit Ratio) indicator where in Islamic banks it is called FDR (Financing Financing) to Deposit Ratio) and operational risk with BOPO (Operating Expenses to Operating Income) indicator. Sufficient bank capital is also an important thing that must be considered; with sufficient capital, financial difficulties will be avoided and allow the bank to operate properly.…”