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1 – 5 of 5Siti Khomsatun, Hilda Rossieta, Fitriany Fitriany and Mustafa Edwin Nasution
The unique characteristic of Islamic bank leads in governance and disclosure. Using stakeholder, signaling, and market discipline theory, governance and adequate disclosure may…
Abstract
The unique characteristic of Islamic bank leads in governance and disclosure. Using stakeholder, signaling, and market discipline theory, governance and adequate disclosure may increase bank soundness. This study aims to investigate the relationship of sharia disclosure and Sharia Supervisory Board in influencing Islamic bank soundness in the different regulatory framework of the country. Using purposive sampling, the research covered 84 Islamic banks in 16 countries during the period 2013–2015 with lag data of Islamic bank soundness. The result shows sharia disclosure influences on Islamic bank soundness for management efficiency, capital adequacy ratio, asset quality, and liquidity. The results also show that sharia disclosure mediates the indirect effect of SSB on Islamic bank soundness. The regulatory framework (sharia accounting standard and SSB regulation) shows moderating effect of regulation framework proved on the association of sharia disclosure with management efficiency, capital, and liquidity. The effect is indirectly depending on the regulatory framework for proxy management efficiency, capital, and liquidity. The implication of the research suggests that sharia disclosure could increase the market discipline mechanism of Islamic bank stream. The Islamic bank can increase the transparency using sharia disclosure as a branding for increasing public trust, even though in the deficient Islamic bank regulation countries.
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This chapter covers the effect of country's economic and political situation on sustainability reporting disclosure (in particular the corporate social responsibility aspect). The…
Abstract
This chapter covers the effect of country's economic and political situation on sustainability reporting disclosure (in particular the corporate social responsibility aspect). The first section discusses the previous empirical studies in this topic. Based on this, the second section develops the theoretical framework in order to examines the moderating role of a country's economic activities (GDP) and political or institutional quality (IQ) on the relationship between corporate social responsibility disclosure (CSRD) and a banks' operational, financial and market performance. For this purpose, we used ordinary least square (OLS), panel fixed-effect regression and IV-GMM to estimate the parameters of the models. We find that the CSRD scores negatively influences bank's performance. The moderator of CRSD and the level of economic activities have a positive influence on that bank's performance. However, the moderator (CRSD and country's institutional quality), while showing positive relationship with bank's performance, has a significant effect only on bank's operational and financial performance.
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Mahfod Aldoseri and Andrew C. Worthington
The purpose of this chapter is to review the risks Islamic financial institutions face in an emerging market context, including risk sharing in Islamic financing and Shari’ah…
Abstract
The purpose of this chapter is to review the risks Islamic financial institutions face in an emerging market context, including risk sharing in Islamic financing and Shari’ah (Islamic law) compliance risk. We explore current risk management practices and establish the link between risk management and the financial performance of banks and the efficiency and effectiveness of financial sectors in emerging markets. Because of their distinctive risk profile, Islamic finance institutions face challenges in risk management. We show that Islamic banking is riskier in emerging markets because of the presence of immature money markets, limitations in the availability of lender of last resort facilities, and deficiencies in market infrastructure. There is also no evidence that Islamic banks have developed effective solutions for managing the risks conventional banks face as well as their own unique risks. We suggest that the countries that do this best are those that prioritize the structure of risk management knowledge and capabilities in a single financial regulator.
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