Abstract
The purpose of this study was to determine the effect of the quality of disclosure of good corporate governance (GCG), leverage, and firm size on profitability in Islamic commercial banks in Indonesia and Malaysia. The data used in this study were obtained from the website of each bank in the period 2011-2017 with a total sample of 16 Islamic commercial banks. The data analysis technique used in this study is panel data regression analysis. The results showed that the quality of GCG disclosure and leverage had an effect on profitability while the firm size variable had an effect on profitability.Keywords: Islamic commercial bank; quality of GCG disclosure; leverage; firm size; profitabilityJEL Classifications: M4, G38, G2, G3DOI: https://doi.org/10.32479/ijefi.8157
Highlights
The growth of Islamic banking has increased rapidly from year to year
Based on the description above, the purpose of this study is to examine the effect of the quality of disclosure of good corporate governance, leverage and firm size on profitability in Islamic commercial banks in Indonesia and Malaysia in 2011-2017
The data used in this study are secondary data, namely annual reports and GCG reports from Islamic commercial banks in 2011-2017 on the official website of Bank Indonesia and Bank Negara Malaysia, and display reports relating to disclosure of good corporate governance, leverage, firm size and profitability
Summary
The growth of Islamic banking has increased rapidly from year to year. The development of Islamic banking globally occurred in 2008. Enactment of Law No 21 of 2008 concerning Islamic banking is a legal basis that will encourage the growth of Islamic banking more quickly. The desire to run an economic system based on Islamic values and principles are a fundamental factor in the formation of Islamic banks (Meutia, 2010). Philosophy underlying Islamic banks aims to distribute justice that is free from all forms of exploitation (Ningsih and Atmadja, 2015) Ifham (2015) explains that basically, Islamic banks are formed as a substitute for usury-based banking systems. Usury is one form of transaction that is prohibited in Islamic Islamic. Riba has several negative effects on society such as seizing the wealth of others, destroying morality, giving birth to seeds of hatred, hostility, making the rich richer and poorer poorer
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