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Article
Publication date: 2 January 2018

Asim Ehsan Wahla, Hamid Hasan and M. Ishaq Bhatti

The main aim of this paper is to measure customers’ perception of car Ijarah financing transactions services provided by the Islamic banks and financial institutions in Pakistan.

Abstract

Purpose

The main aim of this paper is to measure customers’ perception of car Ijarah financing transactions services provided by the Islamic banks and financial institutions in Pakistan.

Design/methodology/approach

The paper uses two research methodologies: Kruskal–Wallis and Mann–Whitney test (non-parametric) and logit regression model (parametric). Both methods are then applied to a real data set of 300 respondents from various cities of Pakistan in the car Ijarah financing industry. The demographic effects are also investigated to see the perception about the degree of Shari’ah compliance and the quality of service of transaction offered by banks.

Findings

Main finds of the paper reveal that the customers who used the car Ijarah facility from Islamic banks have positive attitude toward this sort of transaction. In addition, gender, income, marital status affect the perception about the quality of Shari’ah compliance, and the quality of service of transaction issues are very important to selected clients in the industry.

Research limitations/implications

These findings are limited to the car Ijarah financing industry and may not be applicable in other banking products in Pakistan and elsewhere.

Practical implications

Based on the results of this study, potential Islamic bank customers may find it helpful choose products or make product decisions conveniently. The findings of the paper also support Islamic banks in improving the Ijarah facility to increase their customer base in the geo-political locality with similar characteristics as Pakistan.

Social implications

Shari’ah compliance in the Islamic finance industry is a sensitive issue in Pakistan, and hence, car Ijarah’s Shari’ah compliance can affect banks’ reputation and sensitivity.

Originality/value

The work reported in this paper is original, unpublished and the paper is not submitted elsewhere for publication.

Details

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

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Article
Publication date: 1 June 2009

Maria Bhatti and Ishaq Bhatti

This paper is an attempt to present legal issues of Islamic corporate governance (ICG) in the presence of global financial crises. It presents ICG model and discusses its…

Abstract

This paper is an attempt to present legal issues of Islamic corporate governance (ICG) in the presence of global financial crises. It presents ICG model and discusses its viability in today’s corporate structure. The model is based on institution of Hisbah which demands book keeping, disclosure, transparency based on Shariah principles of Islamic Finance Ethics.

Details

Journal of Economic and Administrative Sciences, vol. 25 no. 1
Type: Research Article
ISSN: 1026-4116

Keywords

Content available

Abstract

Details

Managerial Finance, vol. 44 no. 5
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 3 April 2019

Fadillah Mansor, Naseem Al Rahahleh and M. Ishaq Bhatti

The purpose of this paper is to compare the return performance and persistence of ethical and conventional mutual funds during two extreme events, the Asian and the global…

Abstract

Purpose

The purpose of this paper is to compare the return performance and persistence of ethical and conventional mutual funds during two extreme events, the Asian and the global financial crises under Shariah constraints.

Design/methodology/approach

The overall sample comprises of 129 Islamic mutual funds (IMFs) and 350 conventional mutual funds (CMFs) in Malaysia, and the average monthly data cover two periods of market cycles, before and during a financial crisis. The net of all expenses data is obtained from the Morningstar Database. This study employs various market risk-adjusted performance measures (ratios) to estimate the funds’ overall performance during the crises, and then it uses CAPM model to estimate the parameters via panel data approach. Moreover, paper employs the two persistence performance measures on IMFs and CMFs through contingency tables. It tests for the performance persistence effects for IMFs, CMFs using repeat winner and the cross-product ratio (CPR) tests proposed by Malkiel (1995) and Brown and Goetzmann (1995), respectively.

Findings

The main findings of the paper are: on average, both funds IMF and the CMF outperform the market return during the entire sample period; none of the funds is better than the “others” during the financial crises and the pre-crisis periods; the ethical fund – IMF outperforms the CMF over the study period. This outcome also indicates that ethical funds are more persistent especially during and the pre-crisis AFC and the GFC periods.

Research limitations/implications

The finding of this study is limited to only Malaysian data because the objective was to guideline investors and market players in Malaysia to prefer investing in Islamic ethical funds to diversify their investment portfolio.

Practical implications

Cautions to use existing ratio measures and CAPM model rather persistence measures may be used with existing methodologies in light of extreme events which influenced investor decision making for better returns at lower risks.

Social implications

A class of ethical funds consists of religious sustainable, socially responsible and impact-investing (SRI) funds but Shariah implications of halal investment must be observed to avoid prohibited practices within the class of SRI funds.

Originality/value

The work done in this paper are original in the sense that the authors employed various ratios to measure fund performance in conjunction with CAPM model and then tested for two persistence performance measures; the repeat winner and CPR tests.

Details

International Journal of Managerial Finance, vol. 15 no. 4
Type: Research Article
ISSN: 1743-9132

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Article
Publication date: 11 April 2018

Walid Mansour and M. Ishaq Bhatti

The purpose of this paper is to examine the new paradigm of Islamic corporate governance (ICG) in an emerging area of Islamic finance.

Abstract

Purpose

The purpose of this paper is to examine the new paradigm of Islamic corporate governance (ICG) in an emerging area of Islamic finance.

Design/methodology/approach

The paper adopts an analytical approach to investigate the new executive and managerial roles that ICG is expected to play in the process of corporate financial decision making.

Findings

The authors argue that ICG is no longer expected to play the traditional supervisory and regulatory role within Islamic financial institutions. Indeed, the acuteness of competition, the observed failures of the Islamic finance industry, the unprecedented challenges, and the required ethical considerations levy as a new approach that improve the growth of the Islamic finance industry sustain its survival in the global financial world, and enhance the welfare of 25 percent of the world population who survived beyond all level of poverties.

Originality/value

The authors claim that ICG must be endowed with a multi-faceted, new paradigm for the purpose of improving the stakeholders’ interests and reaching the best business practices of the Islamic finance industry to cater investors’ need and the social well-being of the homeless and disadvantaged communities.

Details

Managerial Finance, vol. 44 no. 5
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 9 February 2018

Mohamed Ariff, Alireza Zarei and Ishaq Bhatti

This paper aims to report practice-relevant anomalous investment yield behavior of two types of bonds – Type A, the mainstream bond, and Type B, which is Sukuk – both…

Abstract

Purpose

This paper aims to report practice-relevant anomalous investment yield behavior of two types of bonds – Type A, the mainstream bond, and Type B, which is Sukuk – both having similar cash-flow-relevant characteristics.

Design/methodology/approach

Bond valuation theory suggests that yields to investors of similarly rated bonds ought to be same. The authors collected time-series data on A and B bonds, all being coupon-paying bonds with similar rating and similar tenor as two matched samples traded in a bond exchange. To ensure the results are extended to different bond sectors, the data set was separated into treasury bonds as risk-free and corporate bonds as risky ones. The data set was further sub-divided into short-, medium- and long-tenor bonds. As the data straddle the Global Financial Crisis period, the authors use appropriate econometric method to control the possible effect from the crisis.

Findings

The average and median yields on Type A bond are significantly different from those of Type B. The test results show significant and systematic differences: treasury bonds of Type A returns yield lower than treasury bonds of Type B; the yields of corporate mainstream bonds (A) are higher than the yields of Sukuk (B). The authors observe these findings constitute a puzzle, being anomalous to theory.

Originality/value

This paper is original in that it is documenting significant differences in pricing of equivalent bonds. This has both theory and practice implications for fixed-income security market practices. The evidence is very strong to suggest that the identical types of bonds may have missing variable that contributes to the difference. Therefore, further research to identify the missing variable is necessary.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 11 no. 1
Type: Research Article
ISSN: 1753-8394

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Article
Publication date: 19 September 2019

Mohammed Alharbi, Peter John Dowling and M. Ishaq Bhatti

The purpose of this paper is to explore the current strategic planning practices in the MENA region by highlighting the practices in the Saudi telecommunications industry…

Abstract

Purpose

The purpose of this paper is to explore the current strategic planning practices in the MENA region by highlighting the practices in the Saudi telecommunications industry (Saudi TI) and the external and internal factors that influence strategic planning in the Saudi TI.

Design/methodology/approach

The data comprised those from a questionnaire-based survey of a random sample of managers of Saudi TI firms, supplemented with data from secondary sources.

Findings

The results revealed that most participating managers recognized the potential benefits of using strategic planning in their firms. Several significant factors that impacted on the decision-making process with regard to strategic planning in Saudi TI firms were identified.

Originality/value

The main contribution of this paper is to fill an existing knowledge gap on strategic planning in a key industry such as the telecommunications industry in a country that is of importance as a business hub in the Middle East.

Details

Review of International Business and Strategy, vol. 29 no. 4
Type: Research Article
ISSN: 2059-6014

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Article
Publication date: 28 May 2019

Iman Adeinat, Naseem Al Rahahleh and M. Ishaq Bhatti

The purpose of this study is to assess customers’ perceptions of Islamic banks (IBs) of customers who have used or intend to use Ijarah service to purchase a car. The…

Abstract

Purpose

The purpose of this study is to assess customers’ perceptions of Islamic banks (IBs) of customers who have used or intend to use Ijarah service to purchase a car. The study further examines the mediating role of clarity and accuracy (CAA) of service offered between customer perceptions and customer satisfaction. This paper focuses on connecting in quantitative terms customers’ perceptions of IB services to customer satisfaction by providing the first evidence of this relationship in the context of car Ijarah financing.

Design/methodology/approach

In this paper, a model is proposed to assess customers’ perceptions of the Ijarah service used by IBs to finance car purchases. The model connects customers’ perceptions to customer satisfaction with this Shariah-compliant service. The data are drawn from 300 randomly selected customers living in five major cities in Pakistan, and factor analysis and structural equation modeling are used to understand the patterns of correlation/covariance among a set of variables and to evaluate customers’ perceptions of Ijarah financing for car purchases.

Findings

The results of the study show a significant positive relationship between customers’ perceptions and customer satisfaction. In particular, the CAA of the services provided is a significant predictor of customer satisfaction. This paper finds that CAA is a partial mediator between customers’ perceptions and customer satisfaction.

Research limitations/implications

As this study is based on only one country and one simple car Ijarah financing product, the results cannot be generalized to the entire industry. Therefore, deeper research is needed in which data from other countries are used and a range of models and approaches are applied to secure knowledge about the multinational and multifactor variations of Ijarah financing.

Practical implications

In terms of their implications for IBs, the study results provide a basis for the banks to more effectively cater to their customers by improving the services offered in line with customers’ expectations and thereby increasing profitability. This investigation is much needed in academia and industry because the market share for Ijarah financing is growing and competition between IB products and conventional banking products is increasing.

Originality/value

This study presents the first endeavor to use exploratory factor analysis, confirmatory factor analysis and structural equation modeling to assess customer satisfaction in Ijarah financing using Pakistani banking clients’ data. This approach is also applicable to various IB financial products and Shariah contracts.

Details

Qualitative Research in Financial Markets, vol. 11 no. 2
Type: Research Article
ISSN: 1755-4179

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Article
Publication date: 1 March 2017

Tengku Adil Tengku Izhar, Torab Torabi and M. Ishaq Bhatti

This paper is about gathering the measurement data and making an effectiveness results to assist decision-making process to evaluate the level of the organizational goals…

Abstract

This paper is about gathering the measurement data and making an effectiveness results to assist decision-making process to evaluate the level of the organizational goals achievement. In order to achieve this aim, we designed GOAL framework as a platform represents five steps for domain experts and entrepreneurs to identify the relevant organizational data to assist decision-making process in relation to the organizational goals. The aim of this paper concentrates on the design of this framework. GOAL framework associated with the organizational goals ontology aim to identify the dependency relationship between organizational goals and dependency relationship between organizational data and organizational goals. Metrics is defined for this dependency to identify which organizational data is relevant to the organizational goals. The framework is flexible to change without affecting things around because the framework is applicable in any organizational data with different organizational goals.

Details

International Journal of Organization Theory & Behavior, vol. 20 no. 2
Type: Research Article
ISSN: 1093-4537

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Article
Publication date: 1 August 2004

Zakir Hossain, M. Ishaq Bhatti and Zulficar Ali

Recently, Bhatti and Khan considered various functional forms to see their suitability in terms of efficiency and competency in assessing production process based on…

Abstract

Recently, Bhatti and Khan considered various functional forms to see their suitability in terms of efficiency and competency in assessing production process based on agricultural data. This paper reviews some models recently used in the literature and selects the most suitable one for measuring the production process of 21 major manufacturing industries in Bangladesh. In particular, the paper estimates and tests the coefficients of the production inputs for each of the selected manufacturing industries using Bangladesh Bureau of Statistics annual data over the period 1982‐1983 through 1991‐1992.

Details

Managerial Auditing Journal, vol. 19 no. 6
Type: Research Article
ISSN: 0268-6902

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