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1 – 3 of 3Mohd Haniff Zainuldin, Tze Kiat Lui and Kwang Jing Yii
This paper aims to discuss and explore the unique agency issues in Islamic banks which give rise to different agency conflicts exist in Islamic banks as compared to conventional…
Abstract
Purpose
This paper aims to discuss and explore the unique agency issues in Islamic banks which give rise to different agency conflicts exist in Islamic banks as compared to conventional banks. In addition, this paper critically examines agency theory in Islamic banking perspective by incorporating Islamic ethical considerations in the principal–agent setting.
Design/methodology/approach
This is a conceptual paper, and the discussions revolve around the review of literature of which important sources have been cited in a way that demonstrates a reasonable understanding of the topic. It attempts to create a discourse around the inclusion of Islamic ethical system in understanding the governance structure of Islamic banks.
Findings
This paper concludes that Islamic ethical system embedded in the Islamic banks business activities shapes Islamic banks into organisations that place higher ethical considerations than conventional banks. Therefore, Islamic banks are likely to have less severe agency problems relative to their conventional counterparts.
Research limitations/implications
Because of the chosen research approach, the research results may lack generalisability. Therefore, researchers are encouraged to test the proposed propositions further.
Practical implications
As the discourse generated by the paper, it can ultimately enhance the understanding of Islamic governance structure in the perspective of agency issues.
Social implications
As the discourse generated by the paper, it can ultimately enhance the understanding of Islamic governance structure in the perspective of agency issues.
Originality/value
The paper attempts to bring to attention the important aspect of principal–agent relationship within the Islamic banking structures and explain the role of incorporating Islamic ethical system in enhancing the understanding of the principal–agent relationship.
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Keywords
Kwang-Jing Yii, Zi-Han Soh, Lin-Hui Chia, Khoo Shiang-Lin Jaslyn, Lok-Yew Chong and Zi-Chong Fu
In the stock market, herding behavior occurs when investors mimic the actions of others in their investment decisions. As a result, the market becomes inefficient and speculative…
Abstract
In the stock market, herding behavior occurs when investors mimic the actions of others in their investment decisions. As a result, the market becomes inefficient and speculative bubbles form. This study aims to investigate the relationship between information, overconfidence, market sentiment, experience and national culture, and herding behavior among Malaysian investors. A total of 400 questionnaires are distributed to bank institutions' investors. The survey design based on cross-sectional data is analyzed using the Partial Least Squares Structural Equation Model. The results indicate that information, market sentiment, experience, and national culture are positively related to herding behavior, while overconfidence has no effect. With this, the government should strengthen regulations to prevent the dissemination of misleading information. Moreover, investors are encouraged to overcome narrow thinking by expanding their understanding of different cultures when making investment decisions.
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