Does anti-corruption disclosure affect banking performance?
| Pages | 1161-1172 |
| DOI | https://doi.org/10.1108/JFC-04-2020-0047 |
| Date | 05 June 2020 |
| Published date | 05 June 2020 |
| Author | Haitham Nobanee,Osama F. Atayah,Charilaos Mertzanis |
| Subject Matter | Financial risk/company failure,Accounting & Finance |
Does anti-corruption disclosure
affect banking performance?
Haitham Nobanee
Department of Accounting and Finance, Abu Dhabi University, Abu Dhabi,
United Arab Emirates and Oxford Centre for Islamic Studies, Oxford, UK, and
Osama F. Atayah and Charilaos Mertzanis
Department of Accounting and Finance, Abu Dhabi University, Abu Dhabi,
United Arab Emirates
Abstract
Purpose –This paper aimsto test the levels of anti-corruption disclosureand its implication on the banking
performance of bothconventional and Islamic banks listed on the Abu Dhabi Securities Exchangeand Dubai
FinancialMarket.
Design/methodology/approach –The authors have used the contentanalysis to identify the levels of
anti-corruptiondisclosure in the banks’annual reports. They havealso used the two-steps generalized method
of moments (GMM) regression applied to dynamic panel data analysis to examine the effect of the anti-
corruptiondisclosure on the banking performance.
Findings –The empirical results show that theanti-corruption disclosure is at low levels for all banks
and conventional and Islamic banks samples. The results also show no significant differences in the
anti-corruption disclosure between Islamic and conventional banks. The results of the two-steps GMM
regression applied to dynamic panel data analysis show a negative and significant impact of the levels
of anti-corruption disclosure on the bank’s performance for both all banks and conve ntional banks; the
results of the dynamic panel data analysis show an insignificant impact of anti-corruption discloser for
the Islamic banks’sample.
Practical implications –The findings recommended a comprehensive framework of anti-corruption
disclosureto the central banks and financialmarket regulators to enhance anti-corruptionpractices within the
financialinstitutions to increase transparencyand enhance their performance.
Originality/value –Fighting against anti-corruption is essentialfor financial institutions. This paper is
the first study that examinedthe extent of anti-corruption levels and their effecton banking performance for
both Islamicand conventional banks operates in the UAE. The findingshelp in enhancing reporting practices
in terms of anti-corruptionto improve transparency and performancein the banking sector.
Keywords Performance, Islamic banks, Content analysis, Conventional banks,
Anti-corruption disclosure
Paper type Research paper
1. Introduction
Since 2003, the United Nations (UN) set an annual alarm on the Ninth of December to remind
individuals, institutions and governments around the world about the importance of anti-
corruption. Both advanced and developing countries are experiencing corruption and paying
valuable efforts and continuous improvements to fight corruption (Nguyen and van Dijk, 2012).
Corruption defined is by International Transparency as “the abuse of entrusted power for
private gain”. Furthermore, the UN recognizes that the scope of the phenomenon of corruption
JEL classification –C33, G32, G34
Banking
performance
1161
Journalof Financial Crime
Vol.27 No. 4, 2020
pp. 1161-1172
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-04-2020-0047
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