The purpose of this paper is to examine the relationship between the Islamic religiosity of the local community and the level of corporate environmental responsibility disclosure (CERD) in Iran, an example of an Islamic country. This paper also examines the moderating role of firm size, family ownership, and state ownership. This study is conducted using a sample of 952 observations across firms listed on the Tehran Stock Exchange. The results indicate that CERD increases with an increase in the level of Islamic religiosity of the province where the firm is located. In addition, findings reveal that firm size and family ownership strengthen the aforementioned relationship. However, we provide evidence suggesting that state ownership weakens the positive relationship between the Islamic religious atmosphere and CERD. The results of this research present a new insight suggesting that the Islamic values governing a local community can significantly affect executives’ decisions regarding disclosures, particularly resulting in a decrease in executives’ selfishness and encouraging them to disclose more information about environmental responsibilities.
This is a preview of subscription content, access via your institution.
Buy single article
Instant access to the full article PDF.
Price excludes VAT (USA)
Tax calculation will be finalised during checkout.
The data are available upon request.
Our untabulated results also indicate that, when we use robust regression to deal with outliers, the results are still qualitatively similar. Furthermore, to further support this result, this study uses an alternative indicator to measure firm size. To this end, the natural logarithm of the company’s annual sales was utilized as an alternative indicator measuring the firm size. Untabulated results confirm that the firm size, even when represented by an alternative indicator, strengthens the relationship between the religious atmosphere and CERD.
Our untabulated results also indicate that, when we use robust regression to deal with outliers, the results are qualitatively similar, and that family ownership strengthens the positive relationship between the religious atmosphere and CERD.
Our untabulated results also indicate that, when we use robust regression to deal with outliers, the results are qualitatively similar, and that state ownership weakens the positive relationship between the religious atmosphere and CERD.
In the previous section, we also considered some sensitivity tests such as the use of robust regression and alternative indicators for sub-hypotheses (i.e., hypotheses 2, 3, and 4) (please see footnotes 1, 2, and 3). However, the sensitivity tests of this section are considered only for the main research hypothesis. The reason for this, in addition to space limitations, is that, in developing countries such as Iran, the total research sample is relatively small compared to countries such as the United States. For example, the current research uses 952 observations and the sensitivity test related to subsection "Testing the Main Hypothesis with non-Tehran Observations" divides this sample into two parts: 424 observations and 528 observations. In this situation, if we intend to examine the moderating role of family ownership in these two samples separately, the observations will not be enough to reach a reliable result. This is because this moderating variable divides this limited sample again into two samples of family companies and non-family companies. The lack of sufficient variation among the remaining observations is another problem that this condition imposes.
Abbasi, V. (2003). Maximalist religion theory—An introduction to the scope of religion from the viewpoint of Ayatollah Motahhari. Qabasat, 8(30–31), 133–162. (In Persian).
Abu Qa’dan, M. B., & Suwaidan, M. S. (2019). Board composition, ownership structure and corporate social responsibility disclosure: The case of Jordan. Social Responsibility Journal, 15(1), 28–46.
Ahmadi, F., Khodayarifard, M., Zandi, S., Khorrami-Markani, A., Ghobari-Bonab, B., Sabzevari, M., & Ahmadi, N. (2018). Religion, culture and illness: A sociological study on religious coping in Iran. Mental Health, Religion ad Culture, 21(7), 721–736.
Al-Makarim, Z. A. (1974). Ilm al ‘Adl al Iqtisadi (The Science of Just Economics). Dar al Turath.
Al-Abdin, A., Roy, T., & Nicholson, J. D. (2018). Researching corporate social responsibility in the Middle East: The current state and future directions. Corporate Social Responsibility and Environmental Management, 25(1), 47–65.
Al-Gamrh, B. A., & AL-Dhamari, R. A. (2016). Firm characteristics and corporate social responsibility disclosure. International Business Management, 10(18), 4283–4291.
Ali, W., Frynas, J. G., & Mahmood, Z. (2017). Determinants of corporate social responsibility (CSR) disclosure in developed and developing countries: A literature review. Corporate Social Responsibility and Environmental Management, 24(4), 273–294.
Amor-Esteban, V., García-Sánchez, I. M., & Galindo-Villardón, M. P. (2018). Analysing the effect of legal system on corporate social responsibility (CSR) at the country level, from a multivariate perspective. Social Indicators Research, 140(1), 435–452.
Andrikopoulos, A., & Kriklani, N. (2013). Environmental disclosure and financial characteristics of the firm: The case of Denmark. Corporate Social Responsibility and Environmental Management, 20(1), 55–64.
Angelidis, J., & Ibrahim, N. (2004). An exploratory study of the impact of degree of religiousness upon an individual’s corporate social responsiveness orientation. Journal of Business Ethics, 51(2), 119–128.
Arif, M. (1984). Toward a definition of Islamic economics. Journal for Research in Islamic Economics, 2(2), 87–103.
Arli, D. I., & Tjiptono, F. (2018). Consumer ethics, religiosity, and consumer social responsibility: Are they related? Social Responsibility Journal, 14(2), 302–320.
Asutay, M. (2013). Islamic moral economy as the foundation of Islamic finance. In Islamic Finance in Europe. Edward Elgar Publishing.
Baydoun, N., & Willett, R. (2000). Islamic corporate reports. Abacus, 36(1), 71–90.
Block, J. H., & Wagner, M. (2014). The effect of family ownership on different dimensions of corporate social responsibility: Evidence from large US firms. Business Strategy and the Environment, 23(7), 475–492.
Butt, I., Mukerji, B., & Uddin, M. H. (2019). The effect of corporate social responsibility in the environment of high religiosity: An empirical study of young consumers. Social Responsibility Journal, 15(3), 333–346.
Cai, G., Li, W., & Tang, Z. (2020). Religion and the method of earnings management: Evidence from China. Journal of Business Ethics, 161(1), 71–90.
Call, A. C., Campbell, J. L., Dhaliwal, D. S., & Moon, J. R., Jr. (2017). Employee quality and financial reporting outcomes. Journal of Accounting and Economics, 64(1), 123–149.
Callen, J. L., & Fang, X. (2015). Religion and stock price crash risk. Journal of Financial and Quantitative Analysis, 50(1–2), 169–195.
Chatjuthamard-Kitsabunnarat, P., Jiraporn, P., & Tong, S. (2014). Does religious piety inspire corporate social responsibility (CSR)? Evidence from historical religious identification. Applied Economics Letters, 21(16), 1128–1133.
Conroy, S. J., & Emerson, T. L. (2004). Business ethics and religion: Religiosity as a predictor of ethical awareness among students. Journal of Business Ethics, 50(4), 383–396.
Cressey, D. R. (1953). Other people’s money; A study of the social psychology of embezzlement. Free Press.
Cui, J., Jo, H., & Velasquez, M. G. (2015). The influence of Christian religiosity on managerial decisions concerning the environment. Journal of Business Ethics, 132(1), 203–231.
Cullinan, C. P., Mahoney, L., & Roush, P. B. (2019). Directors and corporate social responsibility: Joint consideration of director gender and the director’s role. Social and Environmental Accountability Journal, 39(2), 100–123.
Da Silva Monteiro, S. M., & Aibar-Guzmán, B. (2010). Determinants of environmental disclosure in the annual reports of large companies operating in Portugal. Corporate Social Responsibility and Environmental Management, 17(4), 185–204.
D’Amato, A., & Falivena, C. (2020). Corporate social responsibility and firm value: Do firm size and age matter? Empirical evidence from European listed companies. Corporate Social Responsibility and Environmental Management, 27(2), 909–924.
Danati Dalami, Z. & Khodakarami, E. (2017). The impact of environmental news on stock prices of companies listed in Tehran Stock Exchange. Journal of Investment Knowledge, 6(23), 189–212. (In Persian).
Dias, A., Rodrigues, L. L., Craig, R., & Neves, M. E. (2019). Corporate social responsibility disclosure in small and medium-sized entities and large companies. Social Responsibility Journal., 15(2), 137–154.
Du, X., Jian, W., Zeng, Q., & Du, Y. (2014). Corporate environmental responsibility in polluting industries: Does religion matter? Journal of Business Ethics, 124(3), 485–507.
Du, X., Du, Y., Zeng, Q., Pei, H., & Chang, Y. (2016). Religious atmosphere, law enforcement, and corporate social responsibility: Evidence from China. Asia Pacific Journal of Management, 33(1), 229–265.
Dusuki, A. W. (2008). What does Islam say about corporate social responsibility. Review of Islamic Economics, 12(1), 5–28.
Dyreng, S. D., Mayew, W. J., & Williams, C. D. (2012). Religious social norms and corporate financial reporting. Journal of Business Finance and Accounting, 39(7–8), 845–875.
Ebiringa, O. T., Yadirichukwu, E., Chigbu, E. E., & Ogochukwu, O. J. (2013). Effect of firm size and profitability on corporate social disclosures: The Nigerian oil and gas sector in focus. British Journal of Economics, Management and Trade, 3(4), 563–574.
El Ghoul, S., Guedhami, O., Nash, R., & Patel, A. (2019). New evidence on the role of the media in corporate social responsibility. Journal of Business Ethics, 154(4), 1051–1079.
Environmental Performance Index (EPI), (2018). “Iran”, Available at: https://epi.envirocenter.yale.edu/epi-topline?country=Iran. Accessed 1 May 2020.
Escandón-Barbosa, D. M., Urbano, D., Hurtado-Ayala, A., & Dominguez, A. Z. (2019). Formal institutions, informal institutions and entrepreneurial activity: A comparative relationship between rural and urban areas in Colombia. Journal of Urban Management, 8(3), 458–471.
Fallah, M. A., & Mojarrad, F. (2019). Corporate governance effects on corporate social responsibility disclosure: Empirical evidence from heavy-pollution industries in Iran. Social Responsibility Journal, 15(2), 208–225.
Fang, H., Randolph, R. V. D. G., Chrisman, J. J., & Barnett, T. (2013). Firm religiosity, bounded stakeholder salience, and stakeholder relationships in family firms. Journal of Management, Spirituality and Religion, 10(3), 253–270.
Farooq, Q., Hao, Y., & Liu, X. (2019). Understanding corporate social responsibility with cross-cultural differences: A deeper look at religiosity. Corporate Social Responsibility and Environmental Management, 26(4), 965–971.
Fathallah, R., Sidani, Y., & Khalil, S. (2020). How religion shapes family business ethical behaviors: An institutional logics perspective. Journal of Business Ethics, 163, 647–659.
Gavahi, A. (2007). The role of religion in the constitution of Iran. Sixth session of dialogue between Abrahamic Religions, Lisbon, Dec. 6–8; Iran Spectrum Quarterly. Available at: http://spektrum.irankultur.com/wp-content/uploads/2013/04/The-Role-of-Religionin-the-Constitution-of-Iran.pdf
Ghaffarifard, M., Youssef Khashei, M., Safdari, R., & Nasim Allameh, M. (2020). The combined index of religious capital in Iran’s provinces and their ranking using multi-criteria decision-making models. Quarterly Journal of Islamic Economics and Banking, 30, 181–200. (In Persian).
Ghorbani, M., Liao, Y., Çayköylü, S., & Chand, M. (2013). Guilt, shame, and reparative behavior: The effect of psychological proximity. Journal of Business Ethics, 114(2), 311–323.
Griffin, P. A., & Sun, E. Y. (2018). Voluntary corporate social responsibility disclosure and religion. Sustainability Accounting, Management and Policy Journal, 9(1), 63–94.
Gul, F. A., & Ng, A. C. (2018). Auditee religiosity, external monitoring, and the pricing of audit services. Journal of Business Ethics, 152(2), 409–436.
Harjoto, M. A., & Rossi, F. (2019). Religiosity, female directors, and corporate social responsibility for Italian listed companies. Journal of Business Research, 95, 338–346.
Hartlieb, S., Loy, T. R., & Eierle, B. (2020). Does community social capital affect asymmetric cost behaviour? Management Accounting Research, 46, 100640.
Helfaya, A., Kotb, A., & Hanafi, R. (2018). Qur’anic ethics for environmental responsibility: Implications for business practice. Journal of Business Ethics, 150(4), 1105–1128.
Hilary, G., & Hui, K. W. (2009). Does religion matter in corporate decision making in America? Journal of Financial Economics, 93(3), 455–473.
Iannaccone, L. R. (1998). Introduction to the Economics of Religion. Journal of Economic Literature, 36(3), 1465–1495.
IRNA. (2021). The emphasis of Qom religious authorities on preserving natural resources and the environment. Islamic Republic News Agency (in Persian).
Jalilvand, A., Noroozabad, M. R., & Switzer, J. (2018). Informed and uninformed investors in Iran: Evidence from the Tehran Stock Exchange. Journal of Economics and Business, 95, 47–58.
Jamali, D., & Sdiani, Y. (2013). Does religiosity determine affinities to CSR? Journal of Management, Spirituality and Religion, 10(4), 309–323.
Jha, A., & Cox, J. (2015). Corporate social responsibility and social capital. Journal of Banking and Finance, 60, 252–270.
Jiang, F., Jiang, Z., Kim, K. A., & Zhang, M. (2015). Family-firm risk-taking: Does religion matter? Journal of Corporate Finance, 33, 260–278.
Jiang, Q., Fu, S., & Zuo, W. (2019). Religious environment and corporate social responsibility and in China: does law exerts any effect? International Academic Conference on Frontiers in Social Sciences and Management Innovation (IAFSM 2018). Atlantis Press.
Kamla, R., Gallhofer, S., & Haslam, J. (2006). Islam, nature and accounting: Islamic principles and the notion of accounting for the environment. In Accounting Forum, 30(3), 245–265.
Kanter, R. (1997). World class: Thriving local in the global economy. Simon & Schuster.
Kavas, M., Jarzabkowski, P., & Nigam, A. (2020). Islamic family business: The constitutive role of religion in business. Journal of Business Ethics, 163(4), 689–700.
Kern, M. C., & Chugh, D. (2009). Bounded ethicality: The perils of loss framing. Psychological Science, 20(3), 378–384.
Khodakarami, M., Rezaee, Z., & Hesarzadeh, R. (2021). Islamic religious atmosphere and audit pricing: Evidence from Iran. Business Ethics: The Environment and Responsibility, 30(4), 716–737.
Khoynezhad, G., Rajaei, A. R., & Sarvarazemy, A. (2012). Basic religious beliefs and personality traits. Iranian Journal of Psychiatry, 7(2), 82–86.
Lang, M., & Lundholm, R. (1993). Cross-sectional determinants of analyst ratings of corporate disclosures. Journal of Accounting Research, 31(2), 246–271.
Leone, A. J., Minutti-Meza, M., & Wasley, C. E. (2019). Influential observations and inference in accounting research. The Accounting Review, 94(6), 337–364.
Leventis, S., Dedoulis, E., & Abdelsalam, O. (2018). The impact of religiosity on audit pricing. Journal of Business Ethics, 148(1), 53–78.
Lewis, M. K. (2001). Islam and accounting. Accounting Forum, 25(2), 103–127.
Lu, L. W., & Taylor, M. E. (2018). A study of the relationships among environmental performance, environmental disclosure, and financial performance. Asian Review of Accounting, 26(1), 107–130.
Marquis, C., Glynn, M. A., & Davis, G. F. (2007). Community isomorphism and corporate social action. Academy of Management Review, 32(3), 925–945.
McGuire, S. T., Omer, T. C., & Sharp, N. Y. (2012). The impact of religion on financial reporting irregularities. The Accounting Review, 87(2), 645–673.
Mergaliyev, A., Asutay, M., Avdukic, A., & Karbhari, Y. (2021). Higher ethical objective (Maqasid al-Shari’ah) augmented framework for Islamic banks: Assessing ethical performance and exploring its determinants. Journal of Business Ethics, 170(4), 797–834.
Mir, M. Z., Chatterjee, B., & Taplin, R. (2015). Political competition and environmental reporting: Evidence from New Zealand local governments. Asian Review of Accounting, 23(1), 17–38.
Moradi Kahanghi, F., Cheraghivash, H., & Nazari, A. (2018). The role of afterlifeism in relationship of human and environment on the basis of Nahj al-Balagha. Quarterly Journal of Nahj Al-Balagha Research, 6(22), 119–138. (in Persian).
Murphy, M. J., & Smolarski, J. M. (2020). Religion and CSR: An Islamic “political” model of corporate governance. Business and Society, 59(5), 823–854.
Murphy, M. J., MacDonald, J. B., Antoine, G. E., & Smolarski, J. M. (2019). Exploring Muslim attitudes towards corporate social responsibility: Are Saudi business students different? Journal of Business Ethics, 154(4), 1103–1118.
Nasr, S. H. (1997). Young Muslims and the modern world. Translated by Morteza Asadi (1st ed.). Tarheno. (in Persian).
Nasr, S. H. (2015). Interview with Seyyed Hossein Nasr on Religion & the Environment. Georgetown University School of Foreign Service in Qatar.
Nasr, S. H. (2007). Religion and the order of nature, translated by Insha'Allah Rahmati, published by Ney.
Nor, S. M., Asutay, M., & Mohd Amin, S. I. (2018). Corporate social responsibility practiced by the Malaysian Islamic Banks: A study on the Islamic moral economy. International Journal of Business and Management Science, 8(2).
North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge University Press.
North, D. C. (2005). Understanding the process of economic change. Princeton University Press.
Omer, T. C., Sharp, N. Y., & Wang, D. (2018). The impact of religion on the going concern reporting decisions of local audit offices. Journal of Business Ethics, 149(4), 811–831.
Ousama, A. A., & Fatima, A. H. (2010). Voluntary disclosure by Shariah approved companies: An exploratory study. Journal of Financial Reporting and Accounting, 8(1), 35–49.
Paterson, T. A., Specht, D., & Duchon, D. (2013). Exploring costs and consequences of religious expression in family businesses. Journal of Management, Spirituality and Religion, 10(2), 138–158.
Patten, D. M. (1991). Exposure, legitimacy, and social disclosure. Journal of Accounting and Public Policy, 10(4), 297–308.
Praveen Parboteeah, K., Hoegl, M., & Cullen, J. (2009). Religious dimensions and work obligation: A country institutional profile model. Human Relations, 62(1), 119–148.
Pucheta-Martínez, M. C., Bel-Oms, I., & Rodrigues, L. L. (2019). The engagement of auditors in the reporting of corporate social responsibility information. Corporate Social Responsibility and Environmental Management, 26(1), 46–56.
Quiles, Z. N., & Bybee, J. (1997). Chronic and predispositional guilt: Relations to mental health, prosocial behavior, and religiosity. Journal of Personality Assessment, 69(1), 104–126.
Qur'an, verse 71 of Surah At-Tawbah. Available at: https://read.quranexplorer.com/9/1/129/Usmani/Mishari-Rashid/Hide/Tajweed-OFF. Accessed 7 May 2020.
Rees, W., & Rodionova, T. (2015). The influence of family ownership on corporate social responsibility: An international analysis of publicly listed companies. Corporate Governance: An International Review, 23(3), 184–202.
Rezaee, Z., Alipour, M., Faraji, O., Ghanbari, M.,& Jamshidinavid, B. (2020). Environmental disclosure quality and risk: The moderating effect of corporate governance. Sustainability Accounting, Management and Policy Journal.
Sadeghi, G., Arabsalehi, M., & Hamavandi, M. (2016). Impact of corporate social performance on financial performance of manufacturing companies listed on the Tehran Stock Exchange. International Journal of Law and Management, 58(6), 634–659.
Said, R., Zainuddin, Y. H., & Haron, H. (2009). The relationship between corporate social responsibility disclosure and corporate governance characteristics in Malaysian public listed companies. Social Responsibility Journal, 5(2), 212–226.
Saroglou, V. (2002). Religion and the five factors of personality: A meta-analytic review. Personality and Individual Differences, 32(1), 15–25.
Sepasi, S., & Hassani, H. (2017). Relationship managers’ religiosity with earnings management behavior. Valued and Behavioral Accountings Achievements, 1(2), 17–40. (Persian).
Sharma, E. (2019). A review of corporate social responsibility in developed and developing nations. Corporate Social Responsibility and Environmental Management, 26(4), 712–720.
Shiah, Y. J., Chang, F., Chiang, S. K., & Tam, W. C. C. (2016). Religion and subjective well-being: Western and Eastern religious groups achieved subjective well-being in different ways. Journal of Religion and Health, 55(4), 1263–1269.
Soukhakian, I., & Khodakarami, M. (2019). Working capital management, firm performance and macroeconomic factors: Evidence from Iran. Cogent Business and Management, 6(1), 1684227.
Su, K. (2019). Does religion benefit corporate social responsibility (CSR)? Evidence from China. Corporate Social Responsibility and Environmental Management, 26(6), 1206–1221.
Tilt, C. A. (2018). Making social and environmental accounting research relevant in developing countries: A matter of context? Social and Environmental Accountability Journal, 38(2), 145–150.
Tsang, E. W. (1998). A longitudinal study of corporate social reporting in Singapore: The case of the banking, food and beverages and hotel industries. Accounting, Auditing and Accountability Journal, 11(5), 624–635.
Vakilifard, H., & Hoseinpour, F. (2017). Examaining the effect of accountants’ religious attitude on corporate social responsibility. Valued and Behavioral Accountings Achievements, 2(3), 185–214. (Persian).
Visser, W. (2010). CSR 2.0: from the age of greed to the age of responsibility. In W. Sun, J. Stewart, & D. Pollard (Eds.), Reframing corporate social responsibility: Lessons from the global financial crisis (critical studies on corporate responsibility, governance and sustainability) (Vol. 1, pp. 231–251). Emerald Group Publishing Limited.
Wen, W., & Song, J. (2017). Can returnee managers promote CSR performance? Evidence from China. Frontiers of Business Research in China, 11(1), 12.
White, L. (1967). The historical roots of our ecological crisis. Science, 155, 1203–1207.
Williamson, O. E. (2000). The new institutional economics: Taking stock, looking ahead. Journal of Economic Literature, 38(3), 595–613.
Wilmshurst, T. D., & Frost, G. R. (2000). Corporate environmental reporting: A test of legitimacy theory. Accounting, Auditing and Accountability Journal, 13(1), 10–26.
World Population Review. (2020). Muslim majority countries by population, available at: https://worldpopulationreview.com/countries/muslim-majority-countries/. Accessed 4 April 2020.
Wu, D., Lin, C., & Liu, S. (2016). Does community environment matter to corporate social responsibility? Finance Research Letters, 18, 127–135.
Yonker, S. E. (2017). Geography and the market for CEOs. Management Science, 63(3), 609–630.
Zaman, R., Roudaki, J., & Nadeem, M. (2018). Religiosity and corporate social responsibility practices: Evidence from an emerging economy. Social Responsibility Journal, 14(2), 368–395.
Zeng, S. X., Xu, X. D., Yin, H. T., & Tam, C. M. (2012). Factors that drive Chinese listed companies in voluntary disclosure of environmental information. Journal of Business Ethics, 109(3), 309–321.
The authors appreciate the constructive comments from Professor Kaviraj Praveen Parboteeah (Section Editor) and two anonymous reviewers. They further appreciate the helpful comments from Reza Hesarzadeh, Zohre Hajiha, and Stefano Fiori. All errors are the authors’ own.
The authors did not receive support from any organization for the submitted work.
Conflict of interest
There are no known conflicts of interest associated whit this study.
Human and Animal Rights
This article does not contain any studies involving human participants or animals performed by any of the authors.
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Appendix A: Survey Questions Used to Measure Islamic Religious Atmosphere
Dimension I: Religious Beliefs and Attitudes
1. How much do you trust in God when you intend to perform major affairs of life?
2. How close to God do you feel you are?
3. How much do you agree with the belief that good deeds and bad deeds of man are taken into account in the hereafter?
4. How much do you agree with the belief that all of us are obligated to enjoin the good and forbid the bad?
5. How much do you agree with the idea that religiosity lies within a pure heart even if a man fails to say prayers?
Dimension II: Affection for the Prophet Muhammad’s Family
6. To what extent do you show respect and love toward the Household of Prophet Muhammad?
Dimension III: Religious Behavior and Actions
7. How do you practice religious acts?
Dimension IV: The Performance of Religious Rites and Practices
8. How much do you recite the Qur’an?
9. How often do you attend elegiac and mourning assemblies? (Assemblies commemorating the martyrdom of the Prophet of Islam and his Posterity).
10. How much do you give to charity and donate?
11. How often do you make the pilgrimage to the holy sites?
12. How much do you ask for bibliomancy?
13. How much are you bound to say prayers?
14. How much do you keep fasting?
15. How often do you take part in congregational prayers? (Collective prayer service).
16. How often do you appear at the Friday prayers?
17. How often do you appear at the mosque?
18. How much are you bound to pay alms and zakat?
Dimension V: Religion and Society
19. How much do you agree with the idea that one should not communicate with people who do not pray?
20. How much do you agree or disagree with the idea that “publication of books and films bothering devout people should be prevented”?
21. Do you agree or disagree with the idea that the religious beliefs of people should not be relevant in recruitment?
22. How much do you agree or disagree with the separation of religion from politics/state?
23. To what extent do you agree or disagree with the idea that “all women must wear a hijab even if they do not keep faith in it” (forcible hijab)?
Dimension VI: How to Deal with Religious Abnormality?
24. How do you treat women wearing bad hijab?
25. How do you treat irreligious friendship and intimacy of two opposite sexes?
26. How do you treat watching rhythmic music dancing? (It means dancing which provokes passion and sin).
27. How do you treat parties and celebrations that are not observing Islamic considerations?
Note: This appendix presents the questions for the survey conducted by Iran’s Ministry of Culture and Islamic Guidance to measure the Islamic religious atmosphere.
Source: Khodakarami et al. (2021)
Appendix B: Variables Definitions
To measure this variable, social responsibility reports presented in the annual activity reports of Iranian companies’ board of directors were examined through content analysis. The present study adopts the environmental category of the corporate social responsibility disclosure checklist used by Fallah and Mojarrad (2019) for measuring CERD. The scoring method used for determining the CERD scores is designed to assign 1 point to a firm for every case of disclosing the environmental activities mentioned in the checklist. Of course, based on Du et al.’s (2016) research, in cases where a firm discloses a specific amount of each of these items in addition to disclosing the environmental responsibility items mentioned in the checklist, 2 points are assigned to the firm instead of 1 point in order to increase the accuracy of measuring CERD. In the next step, the points are summed up, and the final CERD score for each firm is obtained
To measure this variable, this study employs a survey titled “Iranian National Plan of Values and Attitudes”. Six Islamic dimensions are covered in the survey. The survey is graded on a 5-point Likert scale. The score obtained for each province is divided by the maximum score to estimate the percentage of religiosity in each province (Khodakarami et al., 2021)
Ln (total assets)
Managers’ share ÷ Total stock
Earnings before interest and taxes ÷ Total assets
The total number of independent board members ÷ The total number of board members
Total debts’ book value ÷ Total assets' book value
The ratio of the first shareholder's share to total shares
The total number of women board members ÷ The total
number of board members
Operating cash flows ÷ Total assets
Ln (firm age)
In order to measure this variable, we create a dummy variable; if the company is among state‐owned enterprises, 1 is assigned; otherwise, 0 is assigned
Industry fixed effects
Year fixed effects
Ln (total sales)
About this article
Cite this article
Khodakarami, M., Yazdifar, H., Khaledi, A.F. et al. The Level of Islamic Religiosity of the Local Community and Corporate Environmental Responsibility Disclosure: Evidence from Iran. J Bus Ethics (2023). https://doi.org/10.1007/s10551-023-05388-y