DIGITAL FINANCIAL RESPONSIBILITY AND ISLAMIC BEHAVIORAL ECONOMICS: NUDGING ETHICAL CONSUMERISM IN MUSLIM SOCIETIES
Abstract
This study explores the intersection of digital financial responsibility and Islamic behavioral economics in promoting ethical consumerism within Muslim societies. The rapid expansion of digital financial technologies has significantly influenced consumption patterns and economic decision-making among Muslim consumers. However, this transformation does not always align with the ethical principles of prudence, justice, and sustainability rooted in the maq??id al-shar?‘ah. Utilizing an Islamic behavioral economics approach, the research investigates the effectiveness of ethically grounded "nudging" strategies to encourage digitally responsible and morally conscious consumer behavior. The study employs a mixed-methods approach, including literature analysis, user perception surveys, and case studies on digital platforms that integrate Shariah principles. The findings reveal that digital interventions designed with Islamic moral cues, social norms, and hisbah-based accountability mechanisms can enhance ethical awareness, self-regulation, and sustainable consumption practices. This research contributes both conceptually and practically to the development of a Shariah-compliant digital financial ecosystem aligned with Islamic ethical values and sustainable development goals.
Full text article
References
Abed, I. A. (2022). The Moderating Effects of Corporate Social Responsibility on the Relationship between Creative Accounting Determinants and Financial Reporting Quality. Sustainability (Switzerland), 14(3). https://doi.org/10.3390/su14031195
Adamkaite, J. (2023). The impact of social responsibility on corporate financial performance in the energy sector: Evidence from Lithuania. Corporate Social Responsibility and Environmental Management, 30(1), 91–104. https://doi.org/10.1002/csr.2340
Al-Shammari, M. A. (2023). The value of expertise: How chief executive officer and board corporate social responsibility expertise enhance the financial effects of firms’ corporate social responsibility initiatives. Society and Business Review, 18(1), 1–27. https://doi.org/10.1108/SBR-10-2021-0183
Aryan, L. A. (2022). The effectiveness of corporate governance on corporate social responsibilities performance and financial reporting quality in Saudi Arabia’s manufacturing sector. Uncertain Supply Chain Management, 10(4), 1141–1146. https://doi.org/10.5267/j.uscm.2022.8.013
Attia, E. F. (2023). The Nonlinear Relationship between Corporate Social Responsibility and Hospitality and Tourism Corporate Financial Performance: Does Governance Matter? Sustainability (Switzerland), 15(22). https://doi.org/10.3390/su152215931
Attig, N. (2024). Relaxed Financial Constraints and Corporate Social Responsibility. Journal of Business Ethics, 189(1), 111–131. https://doi.org/10.1007/s10551-023-05353-9
Awwad, B. S. (2023). Women on boards: An empirical study on the effects on financial performance and corporate social responsibility. Competitiveness Review, 33(1), 147–160. https://doi.org/10.1108/CR-06-2022-0084
Belas, J. (2024). SMEs sustainability: The role of human resource management, corporate social responsibility and financial management. Oeconomia Copernicana, 15(1), 307–342. https://doi.org/10.24136/oc.2937
Carvalho, C. (2023). The corporate social responsibility challenge on financial performance: Portuguese business situation. Environmental Science and Pollution Research, 30(15), 42965–42982. https://doi.org/10.1007/s11356-022-19296-7
Chaher, D. (2024). The impact of TQM on financial and non-financial performance: The mediating role of corporate social responsibility. TQM Journal, Query date: 2025-05-23 01:02:09. https://doi.org/10.1108/TQM-08-2023-0244
Coelho, R. (2023). The impact of social responsibility on corporate financial performance: A systematic literature review. Corporate Social Responsibility and Environmental Management, 30(4), 1535–1560. https://doi.org/10.1002/csr.2446
Costa, J. (2022). The Impact of Corporate Social Responsibility and Innovative Strategies on Financial Performance. Risks, 10(5). https://doi.org/10.3390/risks10050103
Cuomo, F. (2024). The effects of the EU non-financial reporting directive on corporate social responsibility. European Journal of Finance, 30(7), 726–752. https://doi.org/10.1080/1351847X.2022.2113812
Dakhli, A. (2022). The impact of corporate social responsibility on firm financial performance: Does audit quality matter? Journal of Applied Accounting Research, 23(5), 950–976. https://doi.org/10.1108/JAAR-06-2021-0150
Dat, N. M. (2022). The Impact of Corporate Social Responsibilities (CSR), Entrepreneurship, and Financial Factors on the Financial Performance of the Banks in ASEAN Countries. Contemporary Economics, 16(2), 227–240. https://doi.org/10.5709/ce.1897-9254.479
Deng, B. (2022). The Effect of Strategic Corporate Social Responsibility on Financial Performance: Evidence from China. Emerging Markets Finance and Trade, 58(6), 1726–1739. https://doi.org/10.1080/1540496X.2021.1925245
Djalilov, K. (2023). The spirit is willing, but the institutions are weak: Disclosure of corporate social responsibility and the financial sector in transition. Eurasian Business Review, 13(2), 385–427. https://doi.org/10.1007/s40821-022-00224-1
Eriqat, I. O. A. (2024). The impact of corporate social responsibility disclosure on corporate reputation: The moderating role of national culture in financial industries of MENA region. Cogent Business and Management, 11(1). https://doi.org/10.1080/23311975.2024.2391120
Fabozzi, F. J. (2022). The impact of corporate social responsibility on corporate financial performance and credit ratings in Japan. Risks Related to Environmental, Social and Governmental Issues (ESG), Query date: 2025-05-23 01:02:09, 3–20. https://doi.org/10.1007/978-3-031-18227-3_2
Farooq, M. (2022). The impact of corporate social responsibility on financial distress: Empirical evidence. Social Responsibility Journal, 18(5), 1050–1067. https://doi.org/10.1108/SRJ-11-2020-0446
Feng, Y. (2022). The impact of corporate social responsibility on the sustainable financial performance of Italian firms: Mediating role of firm reputation. Economic Research-Ekonomska Istrazivanja, 35(1), 4740–4758. https://doi.org/10.1080/1331677X.2021.2017318
Galeazzo, A. (2024). SDGs in corporate responsibility reporting: A longitudinal investigation of institutional determinants and financial performance. Journal of Management and Governance, 28(1), 113–136. https://doi.org/10.1007/s10997-023-09671-y
Ge, C. (2024). The conjoint effects of corporate social responsibility performance and report tone on financial constraints: Evidence from China. Pacific Basin Finance Journal, 87(Query date: 2025-05-23 01:02:09). https://doi.org/10.1016/j.pacfin.2024.102506
Gharbi, M. (2024). The impact of corporate social responsibility on firm financial performance: Does corporate governance matter? International Journal of Law and Management, 66(6), 681–693. https://doi.org/10.1108/IJLMA-09-2023-0203
Giannopoulos, G. (2024). What Is the Relationship between Corporate Social Responsibility and Financial Performance in the UK Banking Sector? Journal of Risk and Financial Management, 17(5). https://doi.org/10.3390/jrfm17050187
Hamad, H. A. (2023). The Moderating Effects of Corporate Social Responsibility on Corporate Financial Performance: Evidence from OECD Countries. Sustainability (Switzerland), 15(11). https://doi.org/10.3390/su15118901
He, C. (2023). The impact of corporate social responsibility decoupling on financial performance: The role of customer structure and operational slack. International Journal of Operations and Production Management, 43(12), 1859–1890. https://doi.org/10.1108/IJOPM-08-2022-0521
He, L. (2022). The Impact of Financial Redundancy on Corporate Social Responsibility Performance: Evidence From Chinese Listed Firms. Frontiers in Psychology, 13(Query date: 2025-05-23 01:02:09). https://doi.org/10.3389/fpsyg.2022.882731
Istan, M. (2024). The Impact of Good Corporate Governance and Corporate Social Responsibility on Corporate Value: The Moderating Role of Financial Performance. Journal of Logistics, Informatics and Service Science, 11(2), 202–220. https://doi.org/10.33168/JLISS.2024.0213
Kharlanov, A. S. (2022). The Case Experience of Integrating the SDGs into Corporate Strategies for Financial Risk Management Based on Social Responsibility (with the Example of Russian TNCs). Risks, 10(1). https://doi.org/10.3390/risks10010012
Kim, B. J. (2023). Translating corporate social responsibility into financial performance: Exploring roles of work engagement and strategic coherence. Corporate Social Responsibility and Environmental Management, 30(5), 2555–2573. https://doi.org/10.1002/csr.2502
Li, X. (2024). The Impact of Corporate Social Responsibility Implementation on Enterprises’ Financial Performance—Evidence from Chinese Listed Companies. Sustainability (Switzerland), 16(5). https://doi.org/10.3390/su16051848
Lin, W. L. (2024). Too little of a good thing? Curvilinear effects of corporate social responsibility on corporate financial performance. Review of Managerial Science, 18(8), 2197–2228. https://doi.org/10.1007/s11846-023-00682-5
Luo, W. (2022). The influence of corporate social responsibilities on sustainable financial performance: Mediating role of shared vision capabilities and moderating role of entrepreneurship. Corporate Social Responsibility and Environmental Management, 29(5), 1266–1282. https://doi.org/10.1002/csr.2268
Ma, C. (2023). The Corporate Social Responsibility and Its Impact on Financial Performance: A Case of Developing Countries. Sustainability (Switzerland), 15(4). https://doi.org/10.3390/su15043724
Malpani, R. (2024). Unveiling the dynamic nexus between corporate social responsibility, innovations and financial performances in 21st-century Indian start-ups. International Journal of Organizational Analysis, Query date: 2025-05-23 01:02:09. https://doi.org/10.1108/IJOA-01-2024-4239
Mayuri-Ramos, E. (2023). Social Responsibility Actions in Financial Institutions: A Systematic Review. Proceedings of the European Conference on Management, Leadership and Governance, 2023(Query date: 2025-05-23 01:02:09), 269–277.
Nguyen, T. V. (2022). The impacts of corporate social responsibility to corporate financial performance: A case study of Vietnamese commercial banks. Cogent Economics and Finance, 10(1). https://doi.org/10.1080/23322039.2022.2132642
Nour, A. (2022). The Impact of Corporate Social Responsibility Disclosure on the Financial Performance of Banks Listed on the PEX and the ASE. Lecture Notes in Networks and Systems, 423(Query date: 2025-05-23 01:02:09), 42–54. https://doi.org/10.1007/978-3-030-93464-4_5
Ortiz-Martínez, E. (2023). Sustainability, corporate social responsibility, non-financial reporting and company performance: Relationships and mediating effects in Spanish small and medium sized enterprises. Sustainable Production and Consumption, 35(Query date: 2025-05-23 01:02:09), 349–364. https://doi.org/10.1016/j.spc.2022.11.015
Pratoomsuwan, T. (2023). The interaction of corporate social responsibility (CSR) materiality and explicit assessment on willingness to invest: Perception of financial analysts. Asian Journal of Accounting Research, 8(2), 122–132. https://doi.org/10.1108/AJAR-01-2022-0012
Sarfraz, M. (2023). Toward a new understanding of environmental and financial performance through corporate social responsibility, green innovation, and sustainable development. Humanities and Social Sciences Communications, 10(1). https://doi.org/10.1057/s41599-023-01799-4
Shahwan, Y. (2023). SOCIAL RESPONSIBILITY ACCOUNTING AND FINANCIAL PERFORMANCE DURING COVID-19: A SURVEY OF THE FIRMS LISTED IN AMMAN STOCK EXCHANGE. Journal of Governance and Regulation, 12(1), 93–99. https://doi.org/10.22495/jgrv12i1art9
Stella, G. P. (2022). Shedding light on the impact of financial literacy for corporate social responsibility during the COVID-19 crisis: Managerial and financial perspectives. Management Decision, 60(10), 2801–2823. https://doi.org/10.1108/MD-12-2021-1681
Toukabri, M. (2023). The bidirectional relationship between corporate social responsibility and financial reporting quality: Does gender diversity matter? Evidence from US companies. Journal of Corporate Accounting and Finance, 34(2), 187–212. https://doi.org/10.1002/jcaf.22603
Tsatsaronis, M. (2024). The impact of Corporate Social Responsibility on corporate financial performance: An empirical study on shipping. Maritime Policy and Management, 51(2), 226–239. https://doi.org/10.1080/03088839.2022.2116658
Vásquez-Ordóñez, L. R. (2023). The impact of corporate social responsibility on the financial performance of renewable energy firms. Economic Research-Ekonomska Istrazivanja, 36(2). https://doi.org/10.1080/1331677X.2023.2174152
Wang, K. (2022). The horizontal S-shaped relationship between corporate social responsibility and financial performance: The moderating effects of firm size and industry dynamism. Business Ethics, Environment and Responsibility, Query date: 2025-05-23 01:02:09. https://doi.org/10.1111/beer.12465
Wang, L. (2024). The mediating effect of financial reporting quality on the relationship between corporate social responsibility and corporate green innovation. Young Consumers, 25(6), 888–908. https://doi.org/10.1108/YC-01-2024-1956
Xu, X. (2022). The Mediating Role of Green Technology Innovation with Corporate Social Responsibility, Firm Financial, and Environmental Performance: The Case of Chinese Manufacturing Industries. Sustainability (Switzerland), 14(24). https://doi.org/10.3390/su142416951
Zhang, J. (2023). The Impact of Corporate Social Responsibility on Financial Performance and Brand Value. Sustainability (Switzerland), 15(24). https://doi.org/10.3390/su152416864
Zhuang, X. (2025). Under rising environmental uncertainty Chinese enterprises pursue fame or profits? Evidence from corporate social responsibility and financial investment. International Journal of Emerging Markets, 20(3), 1190–1213. https://doi.org/10.1108/IJOEM-04-2022-0639
Authors
Copyright (c) 2026 Wa Sainap, Murat Arslan, Emma Brown
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
