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Islamic banking has undergone significant adaption since its inception. This study aims to investigate why and how Islamic banks adapt their services, using participatory financing as evidence.

A qualitative study is designed, using working capital financing and commodity operations financing in Pakistan as analytical units. The data for each analytical unit is analyzed using a qualitative content analysis, while the findings are synthesized using a cross-case synthesis method.

Findings suggest that participatory financing has undergone extensive adaptation in the Islamic banking industry of Pakistan, in the wake of resolving constraints to participatory financing and increasing its viability. Consequently, participatory finance has emerged as an attractive and viable option in Pakistan. These findings suggest that unlike in the past, where Islamic banks used to buffer themselves from the environment and ignore the market demands, they have learned to respond effectively to the market demands and the challenges posed by the environment.

Findings suggest that the adaptation strategy is more effective than the migration strategy, because it enables the financial service systems to reduce the underlying risks by avoiding emergent threats and eradicating the inherent weaknesses.

The extant literature provides a generalized view on the adaptation process that Islamic banks undergo to comply with their environment. However, it is limited in terms of conceptualizing the adaptations and innovations in their products and the underlying structural variations. The present study fills this gap.

This paper contributes to the existing literature by extending the empirical work on the relationship between corporate governance and capital structure by analyzing the mediating role of cost of capital in the non-financial firms listed on the Pakistan Stock Exchange (PSX).

The sample for this study includes non-financial firms listed on the Pakistan Stock Exchange (formerly Karachi Stock Exchange) for the period of 2004–2016. Based on 1800 firm-year observations, three approaches of panel data analysis are applied for the step-wise analysis of the underlying study. Firstly, Pooled OLS is applied. Secondly, fixed and random effect panel regression followed by the Hausman test to check the unobservable individual heterogeneity of the data. Hausman test indicates that the fixed-effects model is the most appropriate model for the sample panel data.

The study's findings are that board size, board composition, CEO/Chair duality, institutional ownership and managerial ownership have statistically significant direct effect on the firm's financing decisions. However, CEO/Chair duality, institutional ownership and managerial ownership have significant indirect effect on firm's capital structure decisions. The interesting finding of the paper is on the evidence of mediating role of cost of capital in the nexus of corporate governance and capital structure. Moreover, some conventional determinants of capital structure, including the firm's size, asset structure of the firm, profitability, business risk and growth, are found as determinants of capital structure decisions of the firms.

There are a few limitations to our study which could be addressed by upcoming research. We did not include all the four mechanisms of corporate governance including board structure, audit structure, compensation structure and ownership structure. However, we used only five important attributes including board size, board composition and CEO/Chair duality form board structure, managerial ownership and institutional ownership form ownership structure of corporate governance as our explanatory variables to examine their impact on the capital structure choices of the firms. Future studies may fill this research gap by involving some other attributes of corporate governance and analyzing their effectiveness and impact on value relevant capital structure decisions. Further, due to limited time and resources, we only tested the mediating role of cost of capital, hence, future researchers can analyze the mediating and moderating roles of different variables which may influence the relationship between corporate governance and capital structure choices of the firms.

The study has many valuable guidelines and practical implications for the financial managers of the corporations. Our results will facilitate the policymakers in setting their corporate governance policies and practices and making the value relevant capital structure decisions in compliance with the implications of corporate governance mechanism. In addition, our study provides the empirical evidence in accordance with the argument that good governance practices, particularly the voluntary disclosures by the firm may reduce the information asymmetry which, ultimately, reduces the agency cost and the cost of capital for the firm. However, while deciding the financial policy of the corporations, managers can use our findings in order to assess the effectiveness of corporate governance practices employed by the firm in achieving the optimal capital structure at which the weighted average cost of capital is at its minimum level.

This paper contributes to the literature by investigating the mediating role of the cost of capital in the relationship between corporate governance and capital structure decisions of the firms. This paper provides empirical evidence that corporate governance indirectly affects capital structure decisions through the mediating role of cost of capital.

This study aims to examine the impacts of board chairman characteristics on the decision to finance with debts.

Based on historical data from 173 active nonfinancial firms listed on Gulf Cooperation Council (GCC) Stock Exchange Markets during 2012–2019, this research uses ordinary least squares (OLS) and dynamic system-generalized methods of moments to test its hypotheses. The final dataset comprises 1,384 firm-year observations from 10 major nonfinancial industry classifications.

Results indicate a negative impact of board chairman ownership on the decision to finance with retained earnings (RE). Negative effects of the chairman and chief executive officer (CEO) from the same family on the decision to finance with RE, whereas positive effects of the chairman and CEO from the same family on the decision to finance with debts are observed. In addition, a negative effect of the chairman from a royal family on the decision to invest with debts is found.

Many board chairmen characteristics, such as age, gender, experience, education level, periodic change and ethnicity, are unaddressed. Financial decisions (FDs) are also limited to two decisions (internal financing with RE and external financing with debts).

Findings of this study provide an improved understanding of the role of chairman characteristics in FDs in GCC. Investors and lenders dealing with companies in GCC markets benefit from the authors' results because of the effects of chairman characteristics on FDs when making investment decisions in company stocks.

The study clarifies how each of the three board chairman characteristics (i.e. chairman ownership, chairman and CEO from the same family and the chairman from the royal family) affects FDs, especially the decisions to finance with debts and RE.

This study aims to explore the relationship between financing constraints and the innovation performance of Internet enterprises in the cross-border innovation cooperation network. The study also analyzes the moderating effect of the location of the cross-border innovation cooperation network.

The authors selected patent data, related transaction data and other data of A-share listed companies on Shanghai and Shenzhen stock exchanges from 2014 to 2019. The generalized moment estimation method of instrumental variables (IV-GMM) method was used to analyze the relationship between financing constraints and the innovation performance of Internet firms and the moderating effect of the cross-border innovation cooperation network location. The threshold value of the moderating effect of the network structure hole was calculated with the threshold model.

The empirical results show a significant inverted U-shaped relationship between financing constraints and the innovation performance in the cross-border innovation cooperation network of Internet enterprises. Network centrality positively moderates this relationship. There is a threshold for the adjustment effect of network-structural holes, and the adjustment intensity of structural holes changes before and after the threshold.

This study provides a new perspective for Internet firms in innovation cooperation networks to alleviate the negative impact of financing constraints on innovation performance. The inverted U-shaped relationship between financing constraints and the innovation performance of Internet enterprises is in two stages. The moderating range of network centrality and the structural hole besides the threshold of the moderating effect of a structural hole are detailed.

This study aims to explore the potential impact of country-level governance in corporate financing structures.

A two-step system generalized method of moment was used due to the endogeneity issue. The whole sample comprises 3,761 firms in five economies – China, India, Pakistan, Singapore and South Korea – from 2007 to 2016.

The results indicate that the debt option for financing is not favorable under governments with an adequate governance arrangement. However, there is a direct and significant link between country governance and equity financing because in adequate governance arrangements, the possibilities of information asymmetry are minimal and businesses consider equity a more appropriate and safer financing instrument. In contrast, firms prefer to trade-credit financing in poor governance economies, which confirms an adverse link between trade credit and adequate governance.

The country’s governance should be considered a sensitive matter when deciding about corporate financing.

This arrangement of variables has not been previously analyzed in the literature, suggesting the study’s novelty.

This study aims to explore the prospects of istijrar financing in the Islamic banking of Bangladesh. Istijrar is a supply sale contract that facilitates recurrent transactions under a master agreement without needing a deal-to-deal agreement. Murabahah financing in Bangladesh is being criticized for Shari’ah violations, which can be minimized if istijrar financing is integrated and applied.

The study uses a qualitative approach, primarily using a semistructured interview method to collect the primary data. The study conducted 13 one-to-one interviews with leading Islamic banking experts in the country, including Shari’ah scholars, Islamic bankers and regulators. Besides, the study consults with classical and contemporary fiqhi sources to realize the status of istijrar sale in Islamic law. Thematic analysis is performed to explore the qualitative data.

The study finds that istijrar financing has great prospects in the Islamic banking of Bangladesh. Istijrar is applicable in consumer financing and can be offered as an alternative or supplement to murabahah. Also, postimport murabahah financing can be structured with istijrar, while it can also be used in export financing. Besides, a few challenges should be dealt with before offering istijrar, such as proper structure, lack of literacy, stakeholders’ awareness, Shari’ah and regulatory approval and alignment with the law of the land.

Murabahah financing is dominant on the asset side of Islamic banks’ balance sheets in Bangladesh. Murabahah practice in Bangladesh is frequently criticized for some possible Shari’ah violations. Also, more documents are needed for each murabahah operation, which eventually accelerates the costs. Applying istijrar would minimize these issues as it does not require a new contract for each deal. Multiple supplies can be done under a single agreement. Besides, istijrar reduces documentation hassle and transaction costs. Istijrar would be an easy practice and benefit the bank and its clients.

This study contributes to the body of knowledge and the Islamic banking industry. The existing studies have not adequately addressed the potential of istijrar in Islamic banking. In addition, this study will be an eye-opener for Islamic bankers to develop new products with istijrar.

This study aims to investigate the influence of the financial system (financial development and financial structure) on firms' innovation efficiency in China.

This study employs country level data of capital markets and financial institutions along with innovation data from 18 high-tech industries in China spanning the 2009–2016 period, and the stochastic frontier analysis (SFA) is applied to explore how financial development and financial structure affect the innovation efficiency of these industries.

Results show that financial development influences firms' innovation efficiency positively and the capital-market-based financial structure has a positive impact on innovation efficiency of high-tech industries. Furthermore, when the high-tech industries are grouped into five sub-industries, the results show that financial structure had different effects on the innovation efficiency in each sub-industry.

This work contributes to the empirical research on considering the influential factors of innovation efficiency from the perspective of financial system. This paper also extends the existing literature by the different influences of financial system on innovation efficiency in each sub-industry of Chinese high-tech industries.

Based on signaling theory, this paper aims to explore the impact of supply chain transparency (SCT) on firms' bank loan (BL) and supply chain financing (SCF) in the context of voluntary disclosure of supplier and customer lists.

Based on panel data collected from Chinese-listed firms between 2012 and 2021, fixed-effect models and a series of robustness checks are used to test the predictions.

First, improving SCT by disclosing major suppliers and customers promotes BL but inhibits SCF. Specifically, customer transparency (CT) is more influential in SCF than supplier transparency (ST). Second, supplier concentration (SC) weakens SCT’s positive impact on BL while reducing its negative impact on SCF. Third, customer concentration (CC) strengthens the positive impact of SCT on BL but intensifies its negative impact on SCF. Last, these findings are basically more pronounced in highly competitive industries.

This study contributes to the SCT literature by investigating the under-explored practice of supply chain list disclosure and revealing its dual impact on firms' access to financing offerings (i.e. BL and SCF) based on signaling theory. Additionally, it expands the understanding of the boundary conditions affecting the relationship between SCT and firm financing, focusing on supply chain concentration. Moreover, it advances signaling theory by exploring how financing providers interpret the SCT signal and enriches the understanding of BL and SCF antecedents from a supply chain perspective.

The purpose of this paper is to investigate whether air pollution has significant impact on corporate cash holdings and financial leverage.

The data of 199 firms listed on Istanbul Stock Exchange during the period 2009–2020 is analyzed by using pooled ordinary least squares and two-step system generalized method of moments models.

The results indicate that firms in regions with high air pollution tend to increase cash level. In addition, the positive effect of air pollution on cash level is stronger and more significant for environmentally sensitive firms and firms with low operational and distress risk. The results also show insignificant effect of air pollution on financial leverage.

Firms in regions with high air pollution should conduct proactive environmental protection procedures and enhance their eco-efficiency instead of holding excess cash that could negatively affect financial performance. In this context, policymakers should provide financial facilities to firms located in regions with high air pollution and that have low ability to finance environmental investments. On the other hand, the environmental laws and regulations introduced by regulatory authorities can enhance the economic development and firm performance by decreasing the adverse influences of air pollution on corporate financial policies.

To the best of the author’s knowledge, this research is one of few that examines the impact of air pollution on corporate cash holdings and financial leverage in emerging markets.

This paper examines the influence of financial leverage on the financial sustainability of microfinance institutions (MFIs) and the moderating role of the percentage of female borrowers (PFB).

The study uses a global sample of 646 MFIs drawn from the World Bank Mix Market and panel data for 2010–2018. The study employs ordinary least squares (OLS) and the one-step system generalized method of moments (SGMM) as regression estimation methods.

The findings of this study reveal that financial leverage and the PFB have a negative and significant effect on financial sustainability. The findings further show that the interaction between financial leverage and the PFB positively affects the financial sustainability of MFIs.

The findings inform MFIs' managers on the adverse effect of financial leverage and the PFB in their quest for financial sustainability. The findings also demonstrate that MFIs can leverage female borrowers to reverse the adverse effect of financial leverage on financial sustainability of MFIs.

Previous studies examined the direct effect of financial leverage and reported incongruent results. Because female borrowers are at the epicenter of MFI lending, this study fills the gap in the literature by examining whether the proportion of female borrowers moderates the relationship between financial leverage and MFIs' financial sustainability using a global dataset.