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Article
Publication date: 18 May 2018

Hasib Ahmed, M. Kabir Hassan and Blake Rayfield

The purpose of this paper is to analyze whether investors perceive the issuance of sukuk differently than they do in case of conventional bonds, by using event study with…

Abstract

Purpose

The purpose of this paper is to analyze whether investors perceive the issuance of sukuk differently than they do in case of conventional bonds, by using event study with superior data. Then, it analyzes whether financial characteristics of issuers can explain the abnormal return and likelihood of sukuk issuance. Finally, the paper proposes a testable model explaining the investor reaction.

Design/methodology/approach

This paper uses market model event study to assess investor reaction to the issuance of sukuk. Then, linear and logistic regressions are used to test whether financial characteristics of issuers can explain the abnormal return and likelihood of sukuk issuance. To investigate the differences between sukuk issuers and bond issuers, this paper tests the difference in means of issuer characteristics. Finally, the sample is subdivided into good and bad firm prospects according to dividend/earnings ratio and book-to-market ratio. The subdivisions are used to test the proposed model explaining the investor reaction.

Findings

The study finds that a large variety of firms issues sukuk. The event study reports significant negative abnormal returns around the announcement date of sukuk issuance. The study also reveals that the earning prospect of issuer firms affect the investor reaction. Firms with lower earning prospect receive a negative reaction from the investors. Also, smaller, or financially unhealthy firms are more likely to issue sukuk. Smaller and riskier firms issue sukuk, because participation in the market is less constrained. In other words, the risk-sharing nature of sukuk might imply that the firm is not confident about the future prospect. However, if the firm has good earnings prospects, investors react to the issuance of sukuk negatively.

Research limitations/implications

Reliability and availability of data is a hurdle to test the investor reaction model. As more data become available, the models implications can be further tested.

Originality/value

This paper uses the most complete set of data to study sukuk, making it the most selection bias-free and complete study. Moreover, the proposed investor reaction model will enrich the theory.

Details

Managerial Finance, vol. 44 no. 6
Type: Research Article
ISSN: 0307-4358

Keywords

Open Access
Article
Publication date: 14 August 2020

Imene Guermazi

This paper focuses on Ṣukūk issuance determinants in Gulf Cooperation Council (GCC) countries. Given the dual characteristic of debt and equity of Ṣukūk as well as their…

1184

Abstract

Purpose

This paper focuses on Ṣukūk issuance determinants in Gulf Cooperation Council (GCC) countries. Given the dual characteristic of debt and equity of Ṣukūk as well as their unique benefits of social responsibility, the author questions whether the theories of capital structure, the trade-off and the pecking order are able to well explain the Ṣukūk issuance.

Design/methodology/approach

First, the author verifies these theories using capital structure determinants and regresses the Ṣukūk change on these determinants. Second, the author tests the trade-off theory with the target debt model and third, verifies the pecking order theory using the fund flow deficit model.

Findings

The empirical results show that capital structure determinants fail to explain both theories. The author confirms that the Ṣukūk change is significatively linked to the deviation from a Ṣukūk target. So, issuing firms balance the marginal costs of Ṣukūk and their benefits of religiosity and social responsibility toward a target debt. The author finds no evidence of the pecking order theory.

Research limitations/implications

This study contributes to corporate finance theory and corporate social responsibility. It verifies if capital structure theories proved in conventional financing can well explain Islamic bonds issuance given their social responsibility benefits.

Practical implications

Managers and investors would pay attention to the social factors explaining Ṣukūk issuance in their finance and investment decisions. They would be enhanced to use this financing tool knowing its social unique benefits. This also should encourage governments to enhance this socially responsible financing. Rating agencies would be motivated to evaluate Ṣukūk and firms would improve the quality and relevance of disclosure to get the best rating.

Social implications

The author highlights the social factors explaining Ṣukūk issuance and enhances corporate social responsibility (CSR).

Originality/value

The author extends the few literature testing capital structure theories for Islamic bonds and highlights the specific social responsible features of Ṣukūk that would bridge their issuance to capital structure theories. So the author enhances the concept of Islamic CSR. Tying capital structure theories to CSR would also help developing Islamic finance theory as a unique social responsible framework.

Details

Islamic Economic Studies, vol. 28 no. 1
Type: Research Article
ISSN: 1319-1616

Keywords

Article
Publication date: 28 April 2022

Tamer Baran

This paper aims to reveal whether there is a difference in perception of banking clients toward participation banks (PBs) and conventional banks (CBs) operated by the same bank.

Abstract

Purpose

This paper aims to reveal whether there is a difference in perception of banking clients toward participation banks (PBs) and conventional banks (CBs) operated by the same bank.

Design/methodology/approach

The data were gathered with an online questionnaire from 254 participants. Questionnaire consisted of the Chaouch (2017) bank perception scale and the Koenig and Büssing (2010) religiosity scale. The data of the study were analyzed using the paired samples t-test and regression analysis.

Findings

The findings exhibit that Turkish bank clients, as a secular society, differently perceive financial activities of PBs and CBs that operate under the same roof in terms of compliance with Islamic laws. The findings also reveal that perceptions of the Turkish bank clients toward PBs' activities to compliance with the Islamic rules differs by the religiosity level. On the other hand, findings show that there is no difference in the perceptions of the CB's activities regarding compliance with Islamic rules by the clients’ religiosity level.

Research limitations/implications

This study uses quantitative data. These type of data both can miss sometimes certain knowledge and restricts of participants thoughts on the study phenomena.

Practical implications

Based on the results of the study’s findings, beneficial suggestions are made for researchers and banking sector managers.

Originality/value

While many studies have been on Islamic banking, this study extends the role theory to compare perceptions of bank clients between PBs and CBs and provides an empirical evidence for bank clients' perceptions to dual banking in a developing and a secular country like Turkey.

Details

Journal of Islamic Accounting and Business Research, vol. 13 no. 5
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 6 November 2017

Muhammad Jahangir Ali and Kamran Ahmed

The purpose of this paper is to examine the determinants of accounting policy choices under International Accounting Standards (IASs) of listed firms in South Asia.

5011

Abstract

Purpose

The purpose of this paper is to examine the determinants of accounting policy choices under International Accounting Standards (IASs) of listed firms in South Asia.

Design/methodology/approach

We selected three IASs-based accounting policy choices from 369 listed companies in India, Pakistan and Bangladesh for the financial year 2007-2008.

Findings

Our results show that firm size, investment opportunity set, leverage and ownership by the general public are significant determinants of accounting policy choice in South Asian countries. However, we do not find a significant relationship between firms’ accounting policy choices and profitability, assets-in-place and taxes.

Practical implications

Our results suggest that as some flexibility exists in IASB’s accounting standards, this may allow managers to use income-increasing/decreasing methods. There is scope for regulators and standards setters to reduce the alternative methods which are likely improve firms’ reporting quality.

Originality/value

Our study contributes to the understanding as to what determines managers’ choice of a particular accounting method allowed in IAS.

Details

Accounting Research Journal, vol. 30 no. 4
Type: Research Article
ISSN: 1030-9616

Keywords

Article
Publication date: 25 March 2022

Ankit Jaiswal, Anil Kumar, Indrajit Pal, Bhushan Raisinghani and Tushar H. Bhoraniya

To minimize risk of coastal communities arising from cyclones, several risk mitigation initiatives have been taken in countries. Cyclone shelters have proven to be an…

67

Abstract

Purpose

To minimize risk of coastal communities arising from cyclones, several risk mitigation initiatives have been taken in countries. Cyclone shelters have proven to be an important critical infrastructure in saving lives from cyclones. A large number of coastal critical infrastructure in the form of multi-purpose cyclone shelters (MPCS) are built to provide safe shelter during disasters. Often observed, such critical infrastructures are non-operational during the normal period, which makes them difficult to use during any disaster. Efforts have been made to keep these infrastructures in working condition. This research paper aims to bring together various management practices adopted for the MPCS in the South-Asian region with a focus on Bangladesh, and India. It also suggests ways to improve these practices for sustainable management of the MPCS.

Design/methodology/approach

India and Bangladesh are the most vulnerable countries in the South Asian region. As per the Global Climate Index, India and Bangladesh come in the list of “in extreme risk” countries in the world and are vulnerable to several natural hazards, especially climate-induced hydrometeorological hazards. India has a vast coastline and out of 7,516 km of coastline, a large extent, i.e. 5,700 km is prone to cyclones and that keeps 40% of the population vulnerable living within 100 km of the coastline. On the other hand, Bangladesh has a coastline of 580 km, which is equally vulnerable to tropical cyclones. Safeguarding communities from impending coastal risk through coastal cyclone shelters are of prime concern. This paper uses a qualitative approach to analyze secondary data, and literature in the field of critical infrastructure, sustainability, cyclone shelter, and management practice for cyclone shelters.

Findings

To provide sustainability and community ownership of the MPCS, various service plans are adopted in different countries. This paper provides insights on service and sustainability efforts made for the proper functioning of the MPCS in India and Bangladesh. It also provides insight into the roles played by different institutions involved in maintaining the MPCSs.

Originality/value

The research reiterates understanding of the cyclone shelter management from different geographic locations in the South Asian region. Various gaps identified in shelter management practices are discussed in the paper and key recommendations are proposed for better management of cyclone shelters.

Details

International Journal of Disaster Resilience in the Built Environment, vol. 13 no. 3
Type: Research Article
ISSN: 1759-5908

Keywords

Article
Publication date: 5 October 2015

Kamran Ahmed and Muhammad Jahangir Ali

This paper aims to examine whether the level of harmonization of accounting measurement practices in three South Asian countries – Bangladesh, India and Pakistan – has…

1450

Abstract

Purpose

This paper aims to examine whether the level of harmonization of accounting measurement practices in three South Asian countries – Bangladesh, India and Pakistan – has improved since 1998 as a result of the changes, in recent years, globally in accounting measurement practices due to the substantial efforts of the International Accounting Standards Board (IASB). South Asian countries have taken a number of steps and made changes in accounting regulations to support the IASB’s harmonization programme.

Design/methodology/approach

In all, 370 non-financial companies for the financial years 1997-1998 and 2007-2008 were used, and consistent with Ali et al. (2006), Van der Tas’s (1988) I index and Archer et al.’s (1995) modified C index were used to measure the extent of harmonization.

Findings

It was found that the level of measurement harmonization has significantly improved over the years in selected South Asian countries.

Originality/value

The results suggest that the harmonization of accounting will most likely ensure a greater level of transparency and uniformity in corporate reporting practices (measurement) in South Asian countries and throughout the world as promoted by the IASB.

Details

International Journal of Accounting & Information Management, vol. 23 no. 4
Type: Research Article
ISSN: 1834-7649

Keywords

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