This paper aims to test the levels of anti-corruption disclosure and its implication on the banking performance of both conventional and Islamic banks listed on the Abu Dhabi Securities Exchange and Dubai Financial Market.
The authors have used the content analysis to identify the levels of anti-corruption disclosure in the banks’ annual reports. They have also used the two-steps generalized method of moments (GMM) regression applied to dynamic panel data analysis to examine the effect of the anti-corruption disclosure on the banking performance.
The empirical results show that the anti-corruption disclosure is at low levels for all banks and conventional and Islamic banks samples. The results also show no significant differences in the anti-corruption disclosure between Islamic and conventional banks. The results of the two-steps GMM regression applied to dynamic panel data analysis show a negative and significant impact of the levels of anti-corruption disclosure on the bank’s performance for both all banks and conventional banks; the results of the dynamic panel data analysis show an insignificant impact of anti-corruption discloser for the Islamic banks' sample.
The findings recommended a comprehensive framework of anti-corruption disclosure to the central banks and financial market regulators to enhance anti-corruption practices within the financial institutions to increase transparency and enhance their performance.
Fighting against anti-corruption is essential for financial institutions. This paper is the first study that examined the extent of anti-corruption levels and their effect on banking performance for both Islamic and conventional banks operates in the UAE. The findings help in enhancing reporting practices in terms of anti-corruption to improve transparency and performance in the banking sector.
