Determinants and outcome of Islamic corporate social responsibility (ICSR) adoption in Islamic banking industry of Pakistan

Purpose The purpose of this study is to empirically examine the determinants and outcomes of Islamic corporate social responsibility (ICSR) adoption in Islamic bank branches in Pakistan. The research framework examines the influence of stakeholder’s pressure on ICSR adoption. It also analyses the relationship between ICSR adoption and intangible outcomes achieved by the Islamic bank branch. Design/methodology/approach A total of 400 questionnaires were distributed through a mail survey to Islamic bank branches in Pakistan. The respondents of the study were the branch manager of Islamic bank branches in Pakistan. A simple random sampling technique was used and resulted in the collection of 293 usable questionnaires. SMART PLS was used to statistically analyse the data using partial least squares structural equation modelling approach. The measurement and structural models were analysed. Findings The results indicate a significant and positive relationship between Shariah supervisory board pressure, competitor pressure and ICSR adoption in Islamic bank branches. A moderate strength positive relationship was found out between top management pressure and ICSR adoption. Results reveal that customer pressure and community pressure have an insignificant influence on ICSR adoption. Data analysis shows that the adoption of ICSR practices have a significant and positive influence on an Islamic bank branch’s Intangible outcomes. Research limitations/implications The sample size was relatively small because of the limited time duration. Originality/value The construct of ICSR has not been extensively researched upon especially through empirical studies. Limited research exists in the area of factors than can influence Islamic bank branches to adopt ICSR practices and currently no empirical research has focussed on the intangible outcomes that can be achieved through ICSR adoption by an Islamic bank branch. The limited study exists in the Pakistan context as well, which is a rapidly growing Islamic banking industry.