DIGITALIZATION AND DISCRETIONARY LOAN LOSS PROVISIONS: THE MEDIATING ROLE OF CORPORATE GOVERNANCE IN ISLAMIC BANKS
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2026
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| _version_ | 1866902090383622144 |
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| author | Sabrine Cherni, Nadia Belkhir, Anis Ben Amar |
| author_facet | Sabrine Cherni, Nadia Belkhir, Anis Ben Amar |
| contents | <p><strong><em><span>This paper examines the mediating role of effective corporate governance mechanisms, specifically the Board of Directors (BD) and the Sharia Supervisory Board (SSB), in the relationship between digitalization and managers’ disclosure of loan loss provisions in Islamic banks. The empirical analysis uses panel data from 2012 to 2021 for a sample of 79 Islamic banks operating across 20 countries. The study employs the Generalized Method of Moments (GMM) to estimate the regression models, uses the Sobel test to assess the mediation effect, and follows the framework proposed by Baron and Kenny (1986). The findings reveal that digitalization significantly reduces earnings management practices, while simultaneously enhancing the effectiveness of governance and control mechanisms. Moreover, the results confirm that both the Board of Directors and the Sharia Supervisory Board play a significant mediating role in the relationship between digitalization and discretionary loan loss provisions (DLLP). These findings offer important implications for regulators, policymakers, and shareholders by improving their ability to monitor managerial behavior and strengthen investment oversight. By fostering greater transparency, timely disclosures, and improved error detection, digitalization enhances the effectiveness of governance within Islamic banks. In the context of rapid digital transformation, this study contributes to the existing literature by offering novel insights into how emerging digital technologies are reshaping the Islamic banking sector and by highlighting the critical role of governance mechanisms in mitigating earnings management in a digitalized environment.</span></em></strong></p> |
| format | Recurso digital |
| id | zenodo_https___doi_org_10_5281_zenodo_19100402 |
| institution | Zenodo |
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| publishDate | 2026 |
| publisher | Zenodo |
| record_format | zenodo |
| spellingShingle | DIGITALIZATION AND DISCRETIONARY LOAN LOSS PROVISIONS: THE MEDIATING ROLE OF CORPORATE GOVERNANCE IN ISLAMIC BANKS Sabrine Cherni, Nadia Belkhir, Anis Ben Amar Digitalization; Corporate governance; Islamic banks; Discretionary loan loss provisions; Earnings management; Sharia Supervisory Board. <p><strong><em><span>This paper examines the mediating role of effective corporate governance mechanisms, specifically the Board of Directors (BD) and the Sharia Supervisory Board (SSB), in the relationship between digitalization and managers’ disclosure of loan loss provisions in Islamic banks. The empirical analysis uses panel data from 2012 to 2021 for a sample of 79 Islamic banks operating across 20 countries. The study employs the Generalized Method of Moments (GMM) to estimate the regression models, uses the Sobel test to assess the mediation effect, and follows the framework proposed by Baron and Kenny (1986). The findings reveal that digitalization significantly reduces earnings management practices, while simultaneously enhancing the effectiveness of governance and control mechanisms. Moreover, the results confirm that both the Board of Directors and the Sharia Supervisory Board play a significant mediating role in the relationship between digitalization and discretionary loan loss provisions (DLLP). These findings offer important implications for regulators, policymakers, and shareholders by improving their ability to monitor managerial behavior and strengthen investment oversight. By fostering greater transparency, timely disclosures, and improved error detection, digitalization enhances the effectiveness of governance within Islamic banks. In the context of rapid digital transformation, this study contributes to the existing literature by offering novel insights into how emerging digital technologies are reshaping the Islamic banking sector and by highlighting the critical role of governance mechanisms in mitigating earnings management in a digitalized environment.</span></em></strong></p> |
| title | DIGITALIZATION AND DISCRETIONARY LOAN LOSS PROVISIONS: THE MEDIATING ROLE OF CORPORATE GOVERNANCE IN ISLAMIC BANKS |
| topic | Digitalization; Corporate governance; Islamic banks; Discretionary loan loss provisions; Earnings management; Sharia Supervisory Board. |
| url | https://doi.org/10.5281/zenodo.19100402 |