Fintech, ESG Debate, Tax Ethics, Islamic vs Conventional Finance

Abstract

In first chapter,Prevailing research on the interaction between board cultural diversity and Environmental, Social, and Governance (ESG) performance presents equivocal findings, particularly in emerging economies. This study ventures into an exploratory examination of this association, situated in the socio-cultural milieu of Asian countries. In this region, the lower social status of gender diversity often leads to a bias towards short-term perspectives. Drawing on the role of agency and stakeholder theory of prejudice toward board gender diversity: top management and women on board, this study aims to investigate the moderating role of board gender diversity in the knowledge sharing indicators on ESG controversies issues. The sample of this study includes 296 banks (52 Islamic, 244 conventional) with 2970 observations from 22 Asian countries during the 2013–2022 period. We further explore how the Board Specific Skills and audit Committee Expertise towards ESG varies positively, illustrating a more substantial effect of females on the board and across Islamic and conventional banks. Notably, we found that the impact of knowledge-sharing indicators on ESG controversies is less pronounced in Islamic banks, where the choices of board gender are more aligned with the conventional banks of emerging economies. Policymakers and leaders should, therefore, establish regulations that encourage knowledge-sharing mechanisms that promote sustainable activities, minimizing ESG issues, as suggested by additional analysis of ESG performance along with individual pillars. Corporate governance reforms in the form of gender diversity that aim to improve the effectiveness and efficiency of boards are critical for Islamic and conventional banks to attain both the financial and sustainable development of Asian economies.Abstract This second chapter aims to examine the role of digital financial technology in tax avoidance, focusing on the moderating effect of CEO narcissism. It uses hand-collected digital transformation (FinTech) data on 46 Islamic and 113 conventional banks (2,400 observations) from Asian countries between 2008 and 2022. Additional data was obtained from the Refinitiv database. Our findings from the fixed effect model provide strong evidence that digital financial technology is negatively related to tax avoidance. CEO narcissism behavior significantly moderates fintech tax avoidance. The analysis compares results from the model and propensity score matching mechanisms, supporting the agency and stakeholder theories. We employed the 2SLS regression model to explore the relationship between digital technology and Islamic and conventional banks that engage in tax avoidance, ensuring robustness. Results indicate that Islamic banks adhere to Sharia rules, while traditional banks are not bound by any Shariah constraints, which explains insignificant findings. Therefore, actively promoting digital transformation is a crucial strategy for ensuring a reliable and stable source of national tax revenue