Can bank efficiency alter the concavity of Islamic CSR disclosure and liquidity creation nexus in GCC economies?

This paper explores the curvilinear nexus between corporate social responsibility (CSR) and liquidity creation, as well as the moderating effect of bank efficiency on this nexus. Using system GMM on a sample a sample of 34 Islamic banks in the Gulf Cooperation Council (GCC) countries during 2012–2020, findings show that there is a curvilinear (inverted U-shaped) nexus between corporate social responsibility and liquidity creation. Moreover, they show that bank efficiency moderates the correlation between CSR and liquidity creation. The findings have implications for policymakers and bank managers in GCC countries, who should periodically assess and fix an optimal level of CSR to avoid its potential fluctuations hindering liquidity creation.