Purpose: The purpose of this paper is to examine the moderating effect of religiosity on the relationship between awareness and purchase decision of halal foods. Design/methodology/approach: Using a convenience sampling procedure, 200 questionnaires were distributed to various local higher education institutions with a 64% response rate. A moderated regression analysis is used to test the relationship between awareness and purchase decision, with religiosity as the moderating variable. Findings: As expected, the authors find that among the sample, the level of awareness toward halal foods is high, and that the effect of awareness on purchase decision is positive and significant. Importantly, they find that religiosity acts as a moderating variable on the relationship between awareness and purchase decision. Research limitations/implications: First, the sample was taken from higher institutions only and respondents were selected using convenience sampling. Hence, it may not be fully representative of the Brunei Muslim population. Second, there may also be omitted variables not considered in the study. Third, the survey instrument and conceptualization of religiosity are both issues that may require further investigation in the literature. Practical implications: The results indicate that awareness is an important antecedent of Muslim students’ intention to purchase halal foods. Marketers should design their campaigns focusing on creating awareness regarding their compliance with halal products. Moreover, food manufacturers and sellers should use the reliable halal certification and logo as a way to inform their consumers that their products are truly halal. Originality/value: This study adds to the current limited knowledge of halal foods research. In particular, the authors investigate the moderating effect of religiosity on the relationship between awareness and purchase decision of halal foods.

Purpose: Based on a sample of 1,872 firm-year observations for 573 global firms over the period 2013–2016, this study aims to provide empirical evidence on how environmental, social and governance (ESG) performance affects corporate creditworthiness as measured by credit default swap (CDS) spreads.Design/methodology/approach: The authors use a regression model that accounts for country, industry and time-fixed effects as well as the instrumental-based Generalized Method of Moments (GMM) approach to dynamic panel modeling.Findings: This study finds that improvements in ESG performance, especially in its governance pillar, reduce credit risk. Further, the authors uncover evidence suggesting the complementarity between ESG performance and country-level sustainability. The results indicate a stronger risk-mitigating impact of ESG performance in countries with higher sustainability scores.Practical implications: In terms of practical implications, the findings suggest that corporations should strengthen governance frameworks and procedures to reduce credit risk, prior to embarking on environmental and social objectives. Further, the finding that country sustainability is an important determinant of CDS spreads suggests that country-level sustainability initiatives would not only help to preserve natural capital and promote social capital but also be beneficial to businesses and financial stability.Originality/value: The study adds to the literature on the effects of ESG performance on credit risk by (1) utilizing a measure of ESG performance that considers the financial materiality of ESG issues across different industries; (2) utilizing a market-based measure of credit risk and CDS spreads; (3) examining the relative importance of ESG components to credit risk, rather than just the aggregate measure; and (4) assessing the influence of country sustainability on the relationship between ESG and credit risk.

Amid growing concern over sustainability issues, there is increasing demand to incorporate environmental and social issues into assessments of credit risk, the possibility of loss resulting from a borrower’s failure to meet their financial obligations. In this paper, we sought to identify empirical evidence of a relationship between sustainability measures and credit risk. We contribute to this literature in three main ways: firstly, by using a measure that considers the financial materiality of sustainability issues across different industries; secondly, by using corporate default swap (CDS) spreads as a market-based measure of credit risk; and thirdly, by exploring the context-dependent nature of the relationship. Though the extent differs across industries, our results suggest risk-reducing effects across several corporate sustainability dimensions: climate change; natural resource use; human capital and corporate governance. Furthermore, we found that country sustainability plays a moderating role in the nexus between corporate sustainability and credit risk. Hence, a one-size-fits-all policy may not be suitable in developing the credit-relevant standardization of sustainability factors. Nevertheless, the robustness of corporate governance throughout our findings suggests that corporations should strengthen governance frameworks and procedures prior to embarking on environmental and social objectives to mitigate credit risk.

Purpose: Islamic banks, despite being Shariah-compliant, have long been criticized for mimicking conventional banks in terms of their products and processes (Khan, 2010; Kuran, 1996). However, several Islamic banks do engage in philanthropy (zakat and charity) and risk-sharing financing (mudarabah and musharakah) instruments that better meet their raison d'etre, the fulfillment of Maqasid al-Shariah (Jatmiko et al., 2023). These contracts, however, are more susceptible to moral hazard and adverse selection problems than traditional debt-based finance (Azmat et al., 2015) and may impair Islamic bank stability. This paper explores the relationship between social finance and the stability of Islamic banks, and whether institutional quality moderates this relationship.Design/methodology/approach: Using hand-collected annual data on social finance from 12 Islamic banks in four countries: Bangladesh, Bahrain, Indonesia and Malaysia, between 2006 and 2019, the authors employ the feasible generalized least squares and the panel-corrected standard errors methods for the analysis. The Stata version 16 software was used to analyze the data for the study.Findings: The results indicate that mudarabah and musharakah financing raises the stability of Islamic banks. The authors also found that mudarabah and musharakah expose Islamic banks to more risk-taking behavior amidst the conditioning effect of institutional quality. On the other hand, charity induces the stability of Islamic banks, while zakat increases the risk-taking behavior of the banks. Further, when the quality of institutions was used as a moderator, both zakat and charity induced the stability of Islamic banks. The results were robust when liquidity risk was used and partially robust when portfolio risks were employed as measures of stability.Research limitations/implications: One concern regarding the application of Islamic social finance is that it might be a risky strategy for Islamic banks. In terms of research implications, the available evidence suggests that the use of Islamic social finance instruments is not detrimental to the stability of Islamic banks. Hence, regulators and policymakers should not penalize Islamic banks for using Islamic social finance instruments that help provide financial solutions to the underserved and unserved. In terms of research limitations, the study could not include other relevant Islamic social finance instruments such as waqf and qard al-hassan. Furthermore, data availability restricts the analysis to only 12 Islamic banks in fourcountries. As more Islamic banks in different countries venture into Islamic social finance, and the quantity and quality of information improve, future studies could explore the issue further.Social implications: The available evidence suggests that the use of Islamic social finance instruments does not worsen the stability of Islamic banks. Given the dominance of sale- and lease-based contracts in Islamic financing (Aggarwal and Yousef, 2000; Šeho et al., 2020), these findings should encourage other Islamic banks to provide financial solutions using other Shariah-compliant contracts including those based on risk-sharing and philanthropy. This would be a better reflection of the Islamic banks’ value proposition as it helps boost social activities that have a high impact on the activities of small businesses, contributing to the real economy and promoting well-being in society.Originality/value: Previous studies mainly relied on mudarabah, mushakarah and zakat separately as they relate to the performance of Islamic banks. This study explores the impact of social finance which includes charity and zakat to examine their impact on Islamic banks’ stability. Further, the authors use institutional quality as a moderating variable in the relationship between Islamic social finance instruments and the stability of Islamic banks.Peer review: The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-06-2022-0441