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Article
Publication date: 21 July 2023

Lutfi Abdul Razak, Mansor H. Ibrahim and Adam Ng

Based on a sample of 1,872 firm-year observations for 573 global firms over the period 2013–2016, this study aims to provide empirical evidence on how environmental, social and…

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Abstract

Purpose

Based on a sample of 1,872 firm-year observations for 573 global firms over the period 2013–2016, this study aims to provide empirical evidence on how environmental, social and governance (ESG) performance affects corporate creditworthiness as measured by credit default swap (CDS) spreads.

Design/methodology/approach

The authors use a regression model that accounts for country, industry and time-fixed effects as well as the instrumental-based Generalized Method of Moments (GMM) approach to dynamic panel modeling.

Findings

This study finds that improvements in ESG performance, especially in its governance pillar, reduce credit risk. Further, the authors uncover evidence suggesting the complementarity between ESG performance and country-level sustainability. The results indicate a stronger risk-mitigating impact of ESG performance in countries with higher sustainability scores.

Practical implications

In terms of practical implications, the findings suggest that corporations should strengthen governance frameworks and procedures to reduce credit risk, prior to embarking on environmental and social objectives. Further, the finding that country sustainability is an important determinant of CDS spreads suggests that country-level sustainability initiatives would not only help to preserve natural capital and promote social capital but also be beneficial to businesses and financial stability.

Originality/value

The study adds to the literature on the effects of ESG performance on credit risk by (1) utilizing a measure of ESG performance that considers the financial materiality of ESG issues across different industries; (2) utilizing a market-based measure of credit risk and CDS spreads; (3) examining the relative importance of ESG components to credit risk, rather than just the aggregate measure; and (4) assessing the influence of country sustainability on the relationship between ESG and credit risk.

Details

The Journal of Risk Finance, vol. 24 no. 5
Type: Research Article
ISSN: 1526-5943

Keywords

Article
Publication date: 13 April 2010

Abdul Razak Bin Ibrahim, Matthew H. Roy, Zafar Ahmed and Ghaffar Imtiaz

The purpose of this paper is to understand the production processes utilized by the Malaysian construction industry (MCI).

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Abstract

Purpose

The purpose of this paper is to understand the production processes utilized by the Malaysian construction industry (MCI).

Design/methodology/approach

The paper follows an earlier work published in this journal in which the authors analyze the global construction industry focusing on the evolution of lean production systems.

Findings

The future of construction is exciting. International markets, innovations in technology, and techniques of construction project management, new relationships across disciplines are all avenues of development. To make the best use of their opportunities, the MCI must invest in research and development (R&D), undertake public education about the field and develop new methodologies to improve operational performance in construction.

Originality/value

This paper provides a detailed analysis of the MCI, it's impact on the economy, key success factors, struggles and problems that the industry currently faces. Analysis of key functional areas like operations management, R&D, and occupational safety and health administration provide insights into improvement.

Details

Benchmarking: An International Journal, vol. 17 no. 2
Type: Research Article
ISSN: 1463-5771

Keywords

Article
Publication date: 13 April 2010

Abdul Razak Bin Ibrahim, Matthew H. Roy, Zafar U. Ahmed and Ghaffar Imtiaz

The purpose of this paper is to analyze the production processes utilized by the global construction industry.

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Abstract

Purpose

The purpose of this paper is to analyze the production processes utilized by the global construction industry.

Design/methodology/approach

This paper discusses the history of the construction industry with a specific focus on the evolution of lean production systems (LPSs) that has a significant impact in reduction of waste in the light of operational performance. The paper proceeds through a comparison of the differences between construction and manufacturing processes.

Findings

The construction industry consumes large amounts of natural resources along with wastage due to inefficient and improper utilization. Numerous factors contribute to this poor performance, but an efficient means of identification and reduction of waste has always been left aside. A fully integrated LPS is a way to eliminate much waste in the construction process.

Originality/value

This paper has developed an instrument to measure degree of integration of LPS principles in the construction industry that can be used globally. It can be used as a checklist for what to aim at when trying to implement LPS in construction.

Details

Benchmarking: An International Journal, vol. 17 no. 2
Type: Research Article
ISSN: 1463-5771

Keywords

Article
Publication date: 17 August 2010

Ali Hussein Zolait, Abdul Razak Ibrahim, V.G.R. Chandran and Veera Pandiyan Kaliani Sundram

The purpose of this paper is to attempt to identify the relationship between supply chain process integration and firm performance.

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Abstract

Purpose

The purpose of this paper is to attempt to identify the relationship between supply chain process integration and firm performance.

Design/methodology/approach

The dimension classification and measurement instrument of the framework adapted from the previous research focus on firm performance impacts of digitally enabled supply chain integration (SCI) capabilities. The study employed the quantitative method where convenience sampling and self‐administered survey questionnaires were sent to 98 conference participants in Malaysia. The research framework was pre‐tested using multivariate analysis.

Findings

The findings reveal that all three dimensions of supply chain process integration were statistically significant to firm performance. Furthermore, information flow integration shows a greater influence than physical and financial flow integration.

Research limitations/implications

This study focused on the manufacturing sector with respondents who were participants of a conference.

Practical implications

The results offer insights to supply chain management practitioners and policy makers on the importance of SCI and information technology (IT) infrastructure to improve the competitiveness of manufacturing industry in terms of operational excellence, revenue growth and customer relationship.

Originality/value

This study adds to the body of knowledge by providing new data and empirical insight on the relationship between SCI and firm performance specifically for the manufacturing industry in Malaysia. In addition, the findings may invite opportunities for comparative studies mainly with other industries as well as other developing and developed economies.

Details

Journal of Systems and Information Technology, vol. 12 no. 3
Type: Research Article
ISSN: 1328-7265

Keywords

Article
Publication date: 25 October 2011

Veera Pandiyan Kaliani Sundram, Abdul Razak Ibrahim and V.G.R. Chandran Govindaraju

The purpose of this paper is to explore the effects of different dimensions of supply chain management practices (SCMP) on supply chain performance (SCP) in the electronics…

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Abstract

Purpose

The purpose of this paper is to explore the effects of different dimensions of supply chain management practices (SCMP) on supply chain performance (SCP) in the electronics industry in Malaysia.

Design/methodology/approach

The study employed the quantitative method where convenience sampling and self‐administrated survey questionnaires were sent to 125 electronics firms in Malaysia. The research framework was tested using variance‐based structural equation model, the partial least squares (PLS) method.

Findings

The empirical results of PLS indicate that six of the seven dimensions of SCMP have a significant positive effect on SCP. Furthermore, agreed vision and goals shows a greater influence than other dimensions of SCMP.

Research limitations/implications

This study took a narrow focus solely on the electronics manufacturing industry with a relatively small sample size of respondents. Also the data were only collected from single respondents in an organization. However, being the first study to explore the dimensions of SCMP and how those dimensions relate to SCP, the study shapes the pathway for future research.

Practical implications

The results offer insights to SCM practitioners and policy makers on the importance of SCMP to increase the competitiveness of manufacturing industry in terms of SCP.

Originality/value

This study employs a newly developed framework based on existing theoretical arguments to empirically examine the relationship between two important factors, the SCMP and SCP. This study is perhaps one of the first to address the effect of SCMP that includes combination of comprehensive practices and system approach towards the overall performance of the supply chain.

Details

Benchmarking: An International Journal, vol. 18 no. 6
Type: Research Article
ISSN: 1463-5771

Keywords

Book part
Publication date: 20 January 2022

Alam I. Asadov

The majority of economic crises impact the wealth of people which in turn affect their financial capacity to purchase residential properties. However, the home financing method…

Abstract

The majority of economic crises impact the wealth of people which in turn affect their financial capacity to purchase residential properties. However, the home financing method may also have an impact on the behaviour of house prices. This chapter intends to test argued resilience of Islamic finance to situations of financial crisis by using an Islamic home financing product called Enhanced Musharakah Mutanaqisah (EMM) which was proposed by Asadov and Ibrahim (2018) as an example and compare its performance to conventional mortgage. Two different models of home financing, conventional and EMM based ones are developed with the former reflecting basic features of conventional mortgage and the latter using rental rates and house price indices for product pricing. Both models are compared using aggregate data for the US housing market for the past 30 years in order to demonstrate the resilience of the EMM model. The findings of the study show that EMM is more flexible in terms of reflecting real situations in both the housing market and aggregate economy as compared to the conventional model. Its pricing is more accommodating particularly during times of economic downturns, and it can potentially provide the solution to numerous mortgage defaults arising from such conditions. Despite the proposed models being tested using data only from the United States, the analysis can be generalized for other countries as well. The implementation of the EMM model, as an example of Shariah-based Islamic financial product, is expected to bring fairness and justice in the relationship between financial institutions and its clients. To the best of our knowledge, this is the first attempt of simulating a Musharakah Mutanaqisah based home financing using both actual rental rates and house prices for product pricing.

Article
Publication date: 26 August 2022

Norhazlina Ibrahim and Safeza Mohd Sapian

The purpose of this study is to investigate whether Tawarruq Islamic home financing (IHF) products remain untouched and maintain their position as the top IHF product in Malaysia.

Abstract

Purpose

The purpose of this study is to investigate whether Tawarruq Islamic home financing (IHF) products remain untouched and maintain their position as the top IHF product in Malaysia.

Design/methodology/approach

The study adopted a qualitative research methodology that included both literature review and content analysis. Firstly, the existing studies and literature were reviewed to compare different types of IHF. The composition of IHF products offered by these Islamic banks was then investigated further to analyse each bank’s progress in IHF from 2015 to 2019. The data were gathered from bank websites, brochures, product disclosure sheets and annual reports.

Findings

The findings reveal that around 62.5% of Islamic banks offered Tawarruq for IHF in the year 2020. For the banks that offered Tawarruq, the amount of the financing continued to grow each year. The plausible reason for the preference for Tawarruq was its less risky nature, despite facing numerous operating, legal and Shariah issues.

Research limitations/implications

This study has several limitations, including the fact that it was limited to home financing products only, the methodology used and the research period.

Practical implications

This study aimed to provide beneficial insights into the use of Tawarruq, which has been a source of concern for regulators as well as steps made to reduce its usage in the industry. Islamic banks should be more proactive in developing non-Tawarruq products to enhance product innovation in the market and minimise the heavy reliance on debt-based products.

Originality/value

This study provides useful insights by analysing IHF in depth for each Islamic bank and making recommendations for future research. Specifically, the method facilitated critical discussions and comparisons to previous research findings as to why Tawarruq has remained popular.

Details

Qualitative Research in Financial Markets, vol. 15 no. 1
Type: Research Article
ISSN: 1755-4179

Keywords

Article
Publication date: 28 December 2021

Norhazlina Ibrahim and Safeza Mohd Sapian

This study, using systematic literature review (SLR) aims to highlight and summarise current studies on the factors influencing customers’ Islamic home financing (IHF) selection…

Abstract

Purpose

This study, using systematic literature review (SLR) aims to highlight and summarise current studies on the factors influencing customers’ Islamic home financing (IHF) selection and Islamic banking product preference, which has gained popularity within the banking sector over the past three decades. The SLR could map evolution and research fields, recommend a particular categorisation and determine primary issues to demonstrate current trends, future research directions and theoretical development.

Design/methodology/approach

The SLR was performed with a four-step reporting standard for the systematic evidence syntheses review method (research question formulation, systematic searching, quality assessment and data extraction) using 33 screened articles between 2008 and 2020 from two primary databases (Scopus and Web of Science) and one supporting database (Google Scholar).

Findings

The resulting factors could be categorised into four primary themes: consumer behaviour, consumer attributes, bank attributes and bank attributes (Islamic). The themes were subsequently divided into 16 sub-themes. Notably, all the factors proved essential for consumers’ evolving preferences and product competitiveness in the market.

Research limitations/implications

This study encountered two limitations based on database selection and research period.

Practical implications

This SLR aimed to offer useful insights into the factors that should be prioritised by financial institutions for marketing approaches by investigating consumer behaviours.

Originality/value

This study pioneered an SLR on the study area for useful insights into the current research limitations and recommendations on future study directions. Specifically, the study method facilitated critical discussions and comparisons to past research outcomes and objectivity with triangulation from distinct perspectives.

Details

International Journal of Housing Markets and Analysis, vol. 16 no. 1
Type: Research Article
ISSN: 1753-8270

Keywords

Article
Publication date: 23 June 2022

Muhammad Rabiu Danlami, Muhamad Abduh and Lutfi Abdul Razak

This study aims to examine the nexus between CAMELS, risk-sharing financial performance and Islamic banks' stability. It also attempts to assess the conditioning effects of…

Abstract

Purpose

This study aims to examine the nexus between CAMELS, risk-sharing financial performance and Islamic banks' stability. It also attempts to assess the conditioning effects of institutional quality in the relationship between risk-sharing contracts and the stability of Islamic banks.

Design/methodology/approach

The quantitative research design was employed using secondary data from 20 Islamic banks in six countries over the period 2007–2019. The study utilized the feasible generalized least squares method for the analysis.

Findings

The results indicate that not all CAMELS variables support the stability of Islamic banks. The musharakah contract induced stability of the banks, whereas mudarabah financing reduced it. The interaction between risk-sharing finance and the quality of institutions suggested that the mudarabah contract via institutional quality raises the stability of Islamic banks. On the other hand, the quality of institutions encourages the banks to offer more musharakah, but it leads to an increase in their risk-taking. We show the impact of changes in risk-sharing variables on stability amplified by institutional quality. The results were robust when alternative measures of stability were used.

Practical implications

Various stakeholders in banking activities could learn from the results of this study. Islamic banks could improve their positions in terms of screening for risk-sharing financing. They could also leverage more on musharakah, as it promotes stability and could generate more returns for the banks. The mudarabah financing can be improved if there is a proper evaluation of entrepreneurs. Policymakers would learn more about the importance of institutional quality, as it provides a friendly environment for both mudarabah and musharakah businesses to thrive. This could increase the participation of Islamic banks in the real economy.

Originality/value

Previous studies concentrated on the effects of CAMELS on the profitability of Islamic banks. This study shows that CAMELS alone might not necessarily capture the financial performance of Islamic banks. Therefore, the risk-sharing financing variables are included alongside CAMELS to determine their effects on stability. Second, unlike the past research, this study used the quality of institutions to moderate the nexus between risk-sharing financing and the stability of Islamic banks.

Details

Journal of Islamic Accounting and Business Research, vol. 13 no. 8
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 2 January 2018

Rosylin Mohd Yusof, Farrell Hazsan Usman, Akhmad Affandi Mahfudz and Ahmad Suki Arif

This study aims to investigate the interactions among macroeconomic variable shocks, banking fragility and home financing provided by conventional and Islamic banks in Malaysia…

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Abstract

Purpose

This study aims to investigate the interactions among macroeconomic variable shocks, banking fragility and home financing provided by conventional and Islamic banks in Malaysia. Identifying the causes of financial instability and the effects of macroeconomic shocks can help to foil the onset of future financial turbulence.

Design/methodology/approach

The autoregressive distributed lag bound-testing cointegration approach, impulse response functions (IRFs) and forecast error variance decomposition are used in this study to unravel the long-run and short-run dynamics among the selected macroeconomic variables and amount of home financing offered by both conventional and Islamic banks. In addition, the study uses Granger causality tests to investigate the short-run causalities among the selected variables to further understand the impact of one macroeconomic shock to Islamic and conventional home financing.

Findings

This study provides evidence that macroeconomic shocks have different long-run and short-run effects on amount of home financing offered by conventional and Islamic banks. Both in the long run and short run, home financing provided by Islamic banks is more linked to real sector economy and thus is more stable as compared to home financing provided by conventional banks. The Granger causality test reveals that only gross domestic product (GDP), Kuala Lumpur Syariah Index (KLSI)/Kuala Lumpur Composite Index (KLCI) and house price index (HPI) are found to have a statistically significant causal relationship with home financing offered by both conventional and Islamic banks. Unlike the case of Islamic banks, conventional home financing is found to have a unidirectional causality with interest rates.

Research limitations/implications

This study has focused on analyzing the macroeconomic shocks on home financing. However, this study does not assess the impact of financial deregulation and enhanced information technology on amount of financing offered by both conventional and Islamic banks. In addition, it is not within the ambit of this present study to examine the effects of agency costs and information asymmetry.

Practical implications

The analysis of cointegration and IRFs exhibits that in the long run and short run, home financing provided by Islamic banks are more linked to real sector economy like GDP and House Prices (HPI) and therefore more resilient to economic vulnerabilities as compared to home financing provided by conventional banks. However, in the long run, both conventional and Islamic banks are more susceptible to fluctuations in interest rates. The results of the study suggest that monetary policy ramifications to improve banking fragility should focus on stabilizing interest rates or finding an alternative that is free from interest.

Social implications

Because interest plays a significant role in pricing of home loans, the potential of an alternative such as rental rate is therefore timely and worth the effort to investigate further. Therefore, Islamic banks can explore the possibility of pricing home financing based on rental rate as proposed in this study.

Originality/value

This paper examines the unresolved issues in Islamic home financing where Islamic banks still benchmark their products especially home financing, to interest rates in dual banking system such as in the case of Malaysia. To the best of the authors’ knowledge, studies conducted in this area are meager and therefore is imperative to be examined.

Details

Journal of Islamic Accounting and Business Research, vol. 9 no. 1
Type: Research Article
ISSN: 1759-0817

Keywords

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