The Moderating Role of Shariah Compliance on the Relationship between Ethical Commitment and Corruption in Malaysian Companies
Corporate ethics and corruption have garnered academic attention in recent decades. This study aims to gain insight into the relationship between ethical commitment and corruption and examine the moderating effect of Shariah compliance on this relationship. This study used 453 Malaysian companies fr...
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| Format: | Article |
| Language: | English |
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Korea Institute for International Economic Policy
2025-06-01
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| Series: | East Asian Economic Review |
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| Online Access: | https://dx.doi.org/10.11644/KIEP.EAER.2025.29.2.448 |
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| author | Siti Nurain Muhmad Ahmad Firdhauz Zainul Abidin Siti Nasuha Muhmad Ahmad Fadhli Mat Sidik |
| author_facet | Siti Nurain Muhmad Ahmad Firdhauz Zainul Abidin Siti Nasuha Muhmad Ahmad Fadhli Mat Sidik |
| author_sort | Siti Nurain Muhmad |
| collection | DOAJ |
| description | Corporate ethics and corruption have garnered academic attention in recent decades. This study aims to gain insight into the relationship between ethical commitment and corruption and examine the moderating effect of Shariah compliance on this relationship. This study used 453 Malaysian companies from 2012 to 2021. The results indicate that strong ethical commitment helps prevent management and employees from engaging in unethical behaviors that can lead to corruption within the company. However, the effect of ethical commitment on reducing corruption remains consistent, irrespective of a company’s Shariah-compliant status. For the separating samples based on the pre- and post-Malaysian Code of Corporate Governance (MCCG) 2017, the result shows no differences in the relationship between ethical commitment and corruption. However, Shariah compliance companies were found to reduce corruption in the post-MCCG 2017 period. This implies that improving the corporate governance structure seems to better influence corruption levels in Shariah compliance companies. This study contributes to the growing literature on corporate ethics and corruption by empirically examining the role of ethical commitment in mitigating corruption within the context of Malaysian companies. It provides novel evidence on how Shariah compliance influences this relationship, particularly in light of recent regulatory changes brought about by the Malaysian Code of Corporate Governance (MCCG) 2017. |
| format | Article |
| id | doaj-art-e5ee52652b864d278fbeee6b22c583a9 |
| institution | Kabale University |
| issn | 2508-1640 2508-1667 |
| language | English |
| publishDate | 2025-06-01 |
| publisher | Korea Institute for International Economic Policy |
| record_format | Article |
| series | East Asian Economic Review |
| spelling | doaj-art-e5ee52652b864d278fbeee6b22c583a92025-08-20T03:32:40ZengKorea Institute for International Economic PolicyEast Asian Economic Review2508-16402508-16672025-06-0129220124110.11644/KIEP.EAER.2025.29.2.448The Moderating Role of Shariah Compliance on the Relationship between Ethical Commitment and Corruption in Malaysian CompaniesSiti Nurain Muhmad0https://orcid.org/0000-0001-8690-9263Ahmad Firdhauz Zainul Abidin1https://orcid.org/0000-0002-5371-5291Siti Nasuha Muhmad2https://orcid.org/0009-0001-5319-4166Ahmad Fadhli Mat Sidik3https://orcid.org/0009-0008-0038-4653Universiti Malaysia TerengganuUniversiti Malaysia TerengganuUniversiti Teknologi Mara Cawangan TerengganuKaneka Malaysia Sdn. Bhd.Corporate ethics and corruption have garnered academic attention in recent decades. This study aims to gain insight into the relationship between ethical commitment and corruption and examine the moderating effect of Shariah compliance on this relationship. This study used 453 Malaysian companies from 2012 to 2021. The results indicate that strong ethical commitment helps prevent management and employees from engaging in unethical behaviors that can lead to corruption within the company. However, the effect of ethical commitment on reducing corruption remains consistent, irrespective of a company’s Shariah-compliant status. For the separating samples based on the pre- and post-Malaysian Code of Corporate Governance (MCCG) 2017, the result shows no differences in the relationship between ethical commitment and corruption. However, Shariah compliance companies were found to reduce corruption in the post-MCCG 2017 period. This implies that improving the corporate governance structure seems to better influence corruption levels in Shariah compliance companies. This study contributes to the growing literature on corporate ethics and corruption by empirically examining the role of ethical commitment in mitigating corruption within the context of Malaysian companies. It provides novel evidence on how Shariah compliance influences this relationship, particularly in light of recent regulatory changes brought about by the Malaysian Code of Corporate Governance (MCCG) 2017.https://dx.doi.org/10.11644/KIEP.EAER.2025.29.2.448ethical commitmentshariah-compliancecorruption |
| spellingShingle | Siti Nurain Muhmad Ahmad Firdhauz Zainul Abidin Siti Nasuha Muhmad Ahmad Fadhli Mat Sidik The Moderating Role of Shariah Compliance on the Relationship between Ethical Commitment and Corruption in Malaysian Companies East Asian Economic Review ethical commitment shariah-compliance corruption |
| title | The Moderating Role of Shariah Compliance on the Relationship between Ethical Commitment and Corruption in Malaysian Companies |
| title_full | The Moderating Role of Shariah Compliance on the Relationship between Ethical Commitment and Corruption in Malaysian Companies |
| title_fullStr | The Moderating Role of Shariah Compliance on the Relationship between Ethical Commitment and Corruption in Malaysian Companies |
| title_full_unstemmed | The Moderating Role of Shariah Compliance on the Relationship between Ethical Commitment and Corruption in Malaysian Companies |
| title_short | The Moderating Role of Shariah Compliance on the Relationship between Ethical Commitment and Corruption in Malaysian Companies |
| title_sort | moderating role of shariah compliance on the relationship between ethical commitment and corruption in malaysian companies |
| topic | ethical commitment shariah-compliance corruption |
| url | https://dx.doi.org/10.11644/KIEP.EAER.2025.29.2.448 |
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