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- W4381854465 abstract "The article explores the ethical and socially responsible investments decision in the Islamic financial framework, how religious beliefs influence decision making, and what balance can be found between the heart, mind, and money. With reference to ethical and prosocial behavior in the Islamic financial decision framework, this paper sheds light, theoretically and experimentally, on the inquiry about whether and why principals’ charitable contributions have a favorable altruistic impact or not on agents’ level of effort and commitment in the participatory financing contractual process? we use an illustrative analysis as well as a lab experiment using a streamlined principal-agent set in which the Islamic banking firm (principal) determines whether or not to contribute a specified amount to a charity, followed by a phase where an informed agent is notified of the bank choice (partner in the participatory financing contract) chooses his effort level and engagement in the light of the bank decision. As anticipated, we find that the entrepreneur, who is a partner in the participatory financing contract (agent), is more willing to decide to afford additional levels of effort when the Islamic banking firm (principal) has donated or is willing, to a charity and announces it. We run experiments with CEO’s 20 SMEs financed by an Islamic bank; (the Zitouna bank Gafsa branch “Tunisia” during the period first quarterly 2022) they confirmed that when helping others through charitable donations and when they are willing to pay Zakat on the business carried out with funds from the Islamic bank partner, they will be helped by God (BARAKAH = Allah’s blessings), and they will afford high levels of effort and additional commitment and then perform better and get a higher payoff. Almost all the CEOs of the SMEs interviewed are pro-social, as they choose the Islamic bank for religious motifs to be compliant in their actions with their beliefs and agree to support the charitable giving of the Islamic financial institution and believe that it has a value raising of the over-roll payoff and thus give them the incentive to perform their project with higher levels of effort. It allows the agent (entrepreneur funded by the Islamic bank) to communicate about the indirect social responsibility of its business and gives him pride to be part of the achievement and increase the belonging feelings and the esteem needs, the desire for reputation or respect from others (Maslow). We sort out the different instruments by changing the intentionality, nature, announcement, and size of the donation and how it affects the behavior of the financed entrepreneur. Variations in the agent’s effort levels, intentionality, and, amount of the donation made by the Islamic banking firm will be increased, allowing then higher returns and participating indirectly in financing the donation. We find significant proof for reciprocal altruism (This concept of Altruism was introduced by Auguste Comte (1798–1857) French philosopher as antonym of egoism that means someone’s behavior that is not free and can have a certain benefits to another person. Reciprocal altruism is altruism with the assumption that the beneficiary, in return will act identically in the future). as a driver for agents’ decisions on choosing their levels of effort and, thus, their payoff as reactions to the principal donating decisions. Also, the distributional concerns and warm glow motives seem to significantly affect the commitment and afforded level of effort. Furthermore, we examined whether donating decisions are strategic or not. We find that when the Islamic banking firm (principal) strategically gives to encourage greater work, and the funded partner (agents) praises altruistic deeds with additional marginal effort when these investments are implemented in a strategic context." @default.
- W4381854465 created "2023-06-25" @default.
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- W4381854465 date "2023-01-01" @default.
- W4381854465 modified "2023-09-25" @default.
- W4381854465 title "Ethical and Socially Responsible Investments in the Islamic Banking Firms: Heart, Mind, and Money: Religious Believes and Financial Decision-Making in the Participatory Financing Contracts:Charitable Donation Announcement Effect on Agents’ Level of Effort and Commitment" @default.
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- W4381854465 doi "https://doi.org/10.1007/978-3-031-29031-2_5" @default.
- W4381854465 hasPublicationYear "2023" @default.
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