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Book part
Publication date: 20 January 2022

M. Kabir Hassan, Saeed Awadh Bin-Nashwan and Aishath Muneeza

COVID-19 is a pandemic that is a black swan event that has disrupted the economic activities in the whole world. Organization for Islamic Cooperation (OIC) is the second…

Abstract

COVID-19 is a pandemic that is a black swan event that has disrupted the economic activities in the whole world. Organization for Islamic Cooperation (OIC) is the second largest international organization that unites Muslims to collectively protect their interest by having a global platform to voice out their concerns. This is an exploratory research of which the objective is to understand the implication of this pandemic on OIC countries to suggest ways in which pandemic related economic challenges facing these countries could be resolved. This research identifies four key economic challenges faced by the OIC countries: challenges in adapting to new normal in in re-starting the economic activities; issues in formulating effective plans for economic recovery; increase in poverty, unemployment and inequality in societies; and disruption to global economy chains. To overcome these economic challenges identified, fives recommendations are proposed via which OIC could play the leading role in ensuring that OIC countries could leverage each other to rebound the respective economies in the shortest possible time. The recommendations proposed are made not to gain short term benefits; but they are proposed considering the long-term benefits it will give to the economies of member countries of OIC. The recommendations proposed are: creating a fintech ecosystem for financial services and introducing OIC electronic commerce market; formulating strategies to implement shared prosperity via effective implementation of Islamic social finance; adopting Blue Ocean Strategy; promoting Islamic economic principles; and implementing circular economy concept. It is anticipated that through this research the economic challenges faced by Muslim countries due to the pandemic can be understood and the recommendations proposed could be utilized by the government and policymakers of the respective countries to resolve the challenges identified.

Details

Towards a Post-Covid Global Financial System
Type: Book
ISBN: 978-1-80071-625-4

Keywords

Article
Publication date: 20 October 2021

Sajid Ali, Zulkornain Yusop, Shivee Ranjanee Kaliappan, Lee Chin and Muhammad Saeed Meo

This study examines the impact of trade openness, human capital, public expenditure and institutional performance on unemployment in various income groups of Organization…

Abstract

Purpose

This study examines the impact of trade openness, human capital, public expenditure and institutional performance on unemployment in various income groups of Organization of Islamic Cooperation (OIC) countries.

Design/methodology/approach

Traditional panel data methodologies neglect the issue of cross-sectional dependence and provide ambiguous outcomes. A novel approach, “dynamic common correlated effects (DCCE)”, is utilized in this study to tackle with aforementioned issue. Pooled mean group (PMG) estimation is also applied to verify the robustness of the findings.

Findings

The long-run estimates show that trade openness has a significant and negative relationship with the unemployment rate in overall and lower-income OIC economies and a positive correlation with unemployment in higher-income OIC countries. Public expenditure is negatively and significantly correlated with unemployment in higher-income and overall OIC economies. Moreover, human capital reduces unemployment in higher-income and overall OIC countries while increases unemployment in lower-income OIC economies.

Practical implications

The research tends to endorse the argument for continuous trade openness policy along with efficient use of public expenditure and improved institutional performance to reduce unemployment in OIC countries.

Originality/value

The DCCE approach in this research considers heterogeneity and cross-sectional dependence between cross-sectional units and thus gives robust outcomes.

Details

International Journal of Manpower, vol. 43 no. 5
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 29 October 2021

Shabeer Khan, Baharom Abdul Hamid and Mohd Ziaur Rehman

The purpose of this paper is to empirically investigate the determinants and the impact of financial development on shadow economy in OIC countries and then compared with…

Abstract

Purpose

The purpose of this paper is to empirically investigate the determinants and the impact of financial development on shadow economy in OIC countries and then compared with non-OIC countries.

Design/methodology/approach

The study applies advanced panel GMM technique.

Findings

The study finds that macro-variables (unemployment, economic growth, money supply and foreign trade) and institutional variables reduce shadow economy both in OIC and non-OIC countries. The study also explores that financial development mitigates shadow economy; however, its impact is significantly less in case of OIC economies compared to the non-OIC countries.

Research limitations/implications

Since the focus of this study is OIC countries vs non-OIC countries, the research only includes discussion about shadow economy in 42 OIC member states and 99 non-OIC economies. The decision to restrict the study to 42 OIC economies and 99 non-OIC nations is due to the availability of data.

Practical implications

The study suggests that free market and good business environment in the formal economy are the keys to have less shadow economy. Good institutional setup and ease in regulations can attract firms and businesses from informal sector to the official economy, while political instability is one of the main factors for having large size of shadow economy.

Social implications

The OIC member countries should implement policies which improve accessibility to finance of every citizen of the country.

Originality/value

Despite the growing importance of shadow economy, the literature investigating determinants and the role of financial development in shadow economy is scarce. To the best of the authors' knowledge, there is no literature that examined the shadow economy in the context of OIC member countries. Furthermore, this study has covered a large number of OIC and non-OIC economics over time and across different groups using largest data and advanced panel GMM techniques.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 1 April 1998

A. Zeinelabdin and Ilhan Ugurel

Despite the apparent orientation of the world economy and markets towards globalisation, it is obvious that this process is dominated by trends of regionalisation and big…

Abstract

Despite the apparent orientation of the world economy and markets towards globalisation, it is obvious that this process is dominated by trends of regionalisation and big economic blocs. Needless to say that this inclination towards groupings is dictated by the fierce competition at the world scale, economically and politically. Almost all of these economic blocs group countries with a lot of similarities in their socio‐economic and political structures as well as cultural set‐ups, geographical proximity and apparent vested mutual interests. An immediate question which comes to the mind when one thinks of the Islamic Common Market (ICM), where there is supposed to be free flow of products, capital, entrepreneurship, labour and technology among the members, as well as a common tariff wall against third parties, is whether the Islamic countries qualify for these criteria or not. The Islamic countries are known to be a diverse group in terms of their economic structures and levels of development, political systems, ethnic backgrounds, as well as a diversified social cultural milieu, although most of them draw on a common source, Islam. This heterogeneity has often been taken as the major argument against the feasibility of an ICM. However, we believe that although this heterogeneity creates a lot of problems, it is also a source of strength if it is positively thought of in terms of diversity and is carefully manipulated.

Details

Humanomics, vol. 14 no. 4
Type: Research Article
ISSN: 0828-8666

Article
Publication date: 8 June 2021

Lokman Gunduz, Hamad Mohammed Rahman Humaid Alshamsi and Mehmet Yasin Ulukus

This paper aims to examine the per capita income convergence of 57 member countries of the Organization of Islamic Cooperation (OIC) over the period 1990–2017 and to…

Abstract

Purpose

This paper aims to examine the per capita income convergence of 57 member countries of the Organization of Islamic Cooperation (OIC) over the period 1990–2017 and to investigate the determinants of convergence club formations.

Design/methodology/approach

The authors applied the methodology of Phillips and Sul (2007, 2009) to identify the convergence clubs and estimated several-ordered logit models to determine the key drivers.

Findings

The results support existence of two convergence clubs and one diverging unit, indicating that 30 and 26 member countries form two separate groups converging to their own steady-state paths. They also suggest a significant productivity divergence between these clubs. The authors showed that the number of convergence clubs started to decline after the global financial crisis in 2008. Moreover, they found that fixed capital formation, education and political stability are key drivers of convergence club membership.

Practical implications

There is a strong need for large-scale policy interventions to close the gap between leading and lagging clubs of the OIC. A substantial investment in human and physical capital seems necessary for lower-income OIC countries.

Originality/value

This is the first empirical study on the existence of convergence clubs among member countries of the OIC.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 14 no. 5
Type: Research Article
ISSN: 1753-8394

Keywords

Article
Publication date: 6 May 2014

Ali Ashraf, M. Kabir Hassan and William J. Hippler III

The aim of the paper is to analyze whether performance measures and their factors for microfinance institutions (MFIs) in Muslim countries are significantly different from…

1765

Abstract

Purpose

The aim of the paper is to analyze whether performance measures and their factors for microfinance institutions (MFIs) in Muslim countries are significantly different from those in their non-Muslim counterparts, central to the Islamic scholars' argument that religious and cultural norms in Muslim countries may drive the preference of Islamic microfinance over conventional microfinance.

Design/methodology/approach

Using a cross-sectional dataset of 2,138 firm-years for 754 different MFIs across 83 countries, 33 Organization of Islamic Conference (OIC) member Muslim countries and 50 non-member countries, we analyzed the MFI performance based on three sets of measures: outreach, loan recovery and profitability and overall financial performance measures, with respect to two sets of explanatory variables, namely, country-specific and firm-level variables.

Findings

Results show that country gross domestic product size is positively related with profitability, and the percentage of women borrowers is also significant in driving loan recovery and firm profitability in the OIC sample, but they are otherwise not significant for the rest of the world sample.

Practical implications

This study contributes to the understanding of the core argument in the motivation of Islamic MFIs, which is whether cultural and religious factors are important for MFI success in Muslim countries.

Originality/value

This study introduces a variable that measures the difference between a country's independence year and their OIC membership year as a proxy for the “country religious inclination” of a Muslim country. Results suggest that countries with delayed membership in OIC show lower inclination to popular Islamic beliefs and higher market penetration of conventional microfinance outreach. Positive relationships among a country's religious inclination and loan loss ratios and loan provisions are also consistent with the moral hazard hypothesis that few religious communities may be more prone to default.

Details

Humanomics, vol. 30 no. 2
Type: Research Article
ISSN: 0828-8666

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Article
Publication date: 1 March 1997

A. Zeinelabdin Ahmed and Ilhan Ugurel

Although, in preparing this paper, the authors have had the chance to consult several reports and studies of the SESRTCIC that they had contributed to over the years, they…

Abstract

Although, in preparing this paper, the authors have had the chance to consult several reports and studies of the SESRTCIC that they had contributed to over the years, they would like to point out that the views expressed in this study are completely of their own and they cannot and should not in any way be attributed to the SESRTCIC or the OIC.

Details

Humanomics, vol. 13 no. 3
Type: Research Article
ISSN: 0828-8666

Article
Publication date: 7 January 2022

Shabeer Khan and Mohd Ziaur Rehman

The purpose of this paper is to analyze the relationship between macroeconomic fundamentals, intuitional quality and shadow economy.

Abstract

Purpose

The purpose of this paper is to analyze the relationship between macroeconomic fundamentals, intuitional quality and shadow economy.

Design/methodology/approach

By utilizing data setspanning from 2004 to 2015 of 141 countries, the study has employed advanced panel technique, i.e. Generalized Method of Moments (GMM) method. In order to check consistency of the results, the study also used fixed effect and random effect for robustness.

Findings

The study finds that for the full sample, institutional quality has negative effect on shadow economy while macroeconomic fundaments effect shadow economy differently. After splitting the sample into Organization of Islamic Cooperation (OIC) and non-OIC countries subsamples, it observes same influence of macroeconomic fundaments and institutional quality on shadow economy, but the effect of macroeconomic fundaments and institutional quality on shadow economy is less observed for OIC countries. The results are found consistence by using different estimation methods.

Originality/value

The current literature has focused on estimating the size of shadow economy and literature linking the macroeconomic fundaments, institutional quality and shadow economy is scarce. Additionally, this study provides the evidence for cross comparison between OIC economies and non-OIC economies.

Details

Journal of Economic Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 1 March 2003

M. Kabir Hassan

Summarizes the net capital flows from industrial to developing/transitional countries 1970‐1996 and recent changes in their equity and bond markets; and identifies the…

1344

Abstract

Summarizes the net capital flows from industrial to developing/transitional countries 1970‐1996 and recent changes in their equity and bond markets; and identifies the factors affecting these portfolio flows and risk/return behaviour in OIC stock markets. Uses monthly stock return data from ten OIC countries to demonstrate that despite their volatility they might offer opportunities for portfolio diversification; and uses cointegration methods to investigate the dynamic relationships between them. Discusses the causes of the Asian currency crisis and its impact on these stock marekts; and considers what trade and development policies OIC countries should adopt to improve their economies.

Details

Managerial Finance, vol. 29 no. 2/3
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 15 October 2021

Fahmi Medias, Asmak Ab Rahman, Akhmad Akbar Susamto and Zulfikar Bagus Pambuko

This paper aims to analyze the role of waqf in the socio-economic development of the organization of the Islamic Cooperation (OIC) countries. Various projects currently…

Abstract

Purpose

This paper aims to analyze the role of waqf in the socio-economic development of the organization of the Islamic Cooperation (OIC) countries. Various projects currently use waqf as an instrument for socio-economic development, as reported in the scholarly literature. This study will investigate this literature to explore trends in waqf studies and the role of this Islamic form of endowment in the socio-economic development of OIC countries.

Design/methodology/approach

This systematic literature review focuses on peer-reviewed journals and data obtained from the Mendeley database using specific criteria to analyze the socio-economic developmental role of waqf in OIC countries from 2011‐2020.

Findings

The socio-economic developmental role of waqf in OIC countries has been widely studied. In total, 68 academic articles were found that are relevant to themes of poverty alleviation, social welfare, entrepreneurship, education, health services and religious facilities. They reveal that the role of waqf in social welfare was the most discussed topic in the research. In addition, the majority of studies used an interview method to study waqf institutions in nine OIC countries. Furthermore, the number of publications on the theme has increased significantly every year, although the largest proportion occurred in unindexed journals.

Practical implications

This study provides an overview of research trends in the socio-economic developmental role of waqf. Its results can provide practical input for waqf institutions as they encourage its practice in OIC countries, and for policymakers in formulating their management strategies to promote the role of waqf in the social and economic aspects of society.

Originality/value

This paper reviews the current development of the socio-economic role of waqf in OIC countries. It will help researchers improve their understanding of this role. It will also provide waqf managers in OIC countries with adequate information on waqf projects which they can implement to achieve socio-economic development in their countries.

Details

Journal of Islamic Accounting and Business Research, vol. 13 no. 1
Type: Research Article
ISSN: 1759-0817

Keywords

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