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<p>This paper investigates the role of Islamic banks (IBs) in supporting sustainable development within the Gulf Cooperation Council (GCC) region by examining how institutional quality (IQ) moderates the relationship between social capital (SC) and environmental, social and governance (ESG) performance. Using a sample of 41 IBs from 2016 to 2022 and employing robust econometric techniques including EGLS, dynamic GMM and quantile regressions the study provides comprehensive evidence on the determinants of ESG outcomes. The empirical results reveal that institutional quality significantly enhances ESG performance, while social capital alone has no direct impact. However, the interaction between institutional quality and social capital is positive and significant, indicating that social capital contributes to ESG performance only in institutional environments characterized by sufficiently strong governance frameworks. This finding highlights the conditional and context-dependent role of social capital in shaping ESG outcomes within GCC Islamic banks. The study contributes to the literature by jointly analyzing formal (IQ) and informal (SC) mechanisms in shaping sustainability performance in Islamic banking an area that remains underexplored, particularly in the GCC context. It also offers practical implications: policymakers should focus on strengthening governance systems and aligning financial regulations with ESG objectives, while IBs should cultivate stakeholder trust and integrate ESG principles into their strategic priorities. Coordinated efforts can foster an enabling ecosystem for IBs to accelerate progress toward the United Nations Sustainable Development Goals (SDGs). Future research may expand the analysis by incorporating additional intangible factors, such as intellectual capital and exploring variations across regions and sectors.</p>

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The joint role of social capital and institutional quality as determinants of ESG performance in GCC countries

  • 期刊论文

  • 出版模式：

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  • 发表日期：

    2026年6月3日

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  • Asma Hkimi,
  • Mouna Baccouri,
  • Dorra Talbi,
  • Abderahman Rejeb

摘要

This paper investigates the role of Islamic banks (IBs) in supporting sustainable development within the Gulf Cooperation Council (GCC) region by examining how institutional quality (IQ) moderates the relationship between social capital (SC) and environmental, social and governance (ESG) performance. Using a sample of 41 IBs from 2016 to 2022 and employing robust econometric techniques including EGLS, dynamic GMM and quantile regressions the study provides comprehensive evidence on the determinants of ESG outcomes. The empirical results reveal that institutional quality significantly enhances ESG performance, while social capital alone has no direct impact. However, the interaction between institutional quality and social capital is positive and significant, indicating that social capital contributes to ESG performance only in institutional environments characterized by sufficiently strong governance frameworks. This finding highlights the conditional and context-dependent role of social capital in shaping ESG outcomes within GCC Islamic banks. The study contributes to the literature by jointly analyzing formal (IQ) and informal (SC) mechanisms in shaping sustainability performance in Islamic banking an area that remains underexplored, particularly in the GCC context. It also offers practical implications: policymakers should focus on strengthening governance systems and aligning financial regulations with ESG objectives, while IBs should cultivate stakeholder trust and integrate ESG principles into their strategic priorities. Coordinated efforts can foster an enabling ecosystem for IBs to accelerate progress toward the United Nations Sustainable Development Goals (SDGs). Future research may expand the analysis by incorporating additional intangible factors, such as intellectual capital and exploring variations across regions and sectors.