The impact of Islamic of corporate social responsibility on social welfare with financial fraud as moderating: study in Indonesia

Abstract

Purpose This study aims to empirically examine the influence of Islamic corporate social responsibility (ICSR) on social welfare moderated by financial fraud. Design/methodology/approach The method used was the mix method. The number of respondents was 410. They combined the moderate regression analysis with PROCESS Andrew F Hayes to test the research hypothesis. After conducting the survey, it was continued by conducting interviews with the village community and the head of the village. Findings The first finding of this study is that ICSR has a significant positive effect on social welfare. The second finding is that financial fraud weakens the influence of ICSR on social welfare. The results of the interviews also confirmed the two findings of this study. Research limitations/implications The high level of bias in answering the questions is due to the low public knowledge of ICSR. In addition, the interviews still needed to involve the oil and gas companies and government. Practical implications The main implication is improving social welfare, especially for those affected by offshore oil drilling. Furthermore, stakeholders are more sensitive to the adverse effects of financial fraud. Finally, to make drilling companies more transparent and on target in implementing ICSR. Originality/value The main novelty in this research is using of the mixed method. In addition, applying financial fraud as a moderating variable is rarely studied empirically.