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Article
Publication date: 9 July 2021

Ratna Candra Sari, P.L. Rika Fatimah, Sariyatul Ilyana and Hardika Dwi Hermawan

This study aims to examine financial socialization based on augmented reality (AR) technology for elementary school students, which it is hoped will improve their sharia

Abstract

Purpose

This study aims to examine financial socialization based on augmented reality (AR) technology for elementary school students, which it is hoped will improve their sharia financial knowledge.

Design/methodology/approach

The experimental method with pre- and post-test and control groups was used to test the improvement in the young learners’ sharia financial knowledge. This study used AR for sharia financial socialization on elementary school students and focused on sharia’s basic concepts, which include earning money, balanced spending, borrowing, saving, investment, payment methods, financial technology and the concept of protection.

Findings

This study finds empirical evidence that the treatment group, who received sharia financial socialization via the AR media, increased their sharia financial knowledge to a greater extent than the control group did.

Research limitations/implications

This study provides encouraging evidence about the potential of sharia financial education for elementary school students using the appropriate learning strategies and media. The weakness in this study is that it was only carried out in one elementary school, with the children of middle- to upper-income parents. Further research should be undertaken at several schools with the children of parents with different income levels.

Practical implications

A shift in learning styles from verbal or visual to virtual encourages the use of AR-based learning media. Financial concepts can be abstract ones, and AR-based learning media is able to present intangible virtual elements so they become more concrete and tangible.

Social implications

The global COVID-19 pandemic has affected all aspects. One of the most severe and likely to be multiyear ahead is the financial aspect. Therefore, this research is expected to be a preparation for the younger generation as early as possible to strengthen social benefits in order to improve sharia financial literacy.

Originality/value

Research into the financial literacy, especially sharia financial literacy aimed at elementary school students, is still very limited. The teaching of financial literacy will be more effective if educators use the appropriate strategies and media. This study used financial socialization strategies and AR learning media that are aligned with the learning styles of young learners.

Details

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

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Book part
Publication date: 1 March 2021

Siti 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…

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.

Details

Recent Developments in Asian Economics International Symposia in Economic Theory and Econometrics
Type: Book
ISBN: 978-1-83867-359-8

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Book part
Publication date: 4 May 2018

Anwar Puteh, Muhammad Rasyidin and Nurul Mawaddah

Purpose – The purpose of the research is to analyze the efficiency of Islamic banks in Indonesia. The data used in this research are panel data observed from 2012 until…

Abstract

Purpose – The purpose of the research is to analyze the efficiency of Islamic banks in Indonesia. The data used in this research are panel data observed from 2012 until 2016. The sampling of this research is conducted on five Sharia banks in Indonesia, that is, Bank Muamalat, Bank SyariahMandiri, BukopinSyariah, BRI Syariah, and Bank Mega Syariah.

Design/Methodology/Approach – The study uses a quantitative method to analyze the efficiency of Sharia banking with formulation of comparison of operating expenses to operating revenues (BOPO).

Finding – The result of this research concludes that Sharia banking in Indonesia has not been efficient during the last five years, that is, 2012–2016. This can be seen from the range of banking efficiency ratio. The average level of Islamic banking efficiency ranges between 89.73% and 94.16%. Bank Muamalat whose range is 94.16% shows the highest average efficiency ratio compared to other Sharia banks. Meanwhile, Bank Mega Syariah maintains the lowest average efficiency ratio that is 89.37%. The five Sharia banks have a high efficiency ratio of over 80%. This shows that Sharia banking in Indonesia is inefficient

Originality/Value – The bank should be able to balance between cost (cost) and revenue. Sharia banks must also be able to create good product innovation in order to increase the collection of funds from the community, such as for competitive outcomes, prizes, or other programs that raise public interest to use the services of Sharia banking.

Research Limitations/Implications – This inefficiency is due to the high bank operating costs compared to the bank’s operating income.

Details

Proceedings of MICoMS 2017
Type: Book
ISBN:

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Article
Publication date: 5 December 2020

Gökberk Can

Sharia compliance states that the compliant company operates not only under regulations but also to the restrictions and permission of Islam. This study aims to reveal…

Abstract

Purpose

Sharia compliance states that the compliant company operates not only under regulations but also to the restrictions and permission of Islam. This study aims to reveal whether Sharia compliance enhances the financial reporting quality.

Design/methodology/approach

The sample is constructed from 15 Muslim majority countries, 2,300 companies for the periods between 2005 and 2017 with 23,810 firm*year observations. Financial reporting quality is measured with discretionary accruals and audit aggressiveness. Discretionary accruals is the absolute of Kothari, Leone and Wasley’s (2005) “performance matched discretionary accruals model.” Audit aggressiveness is calculated with Gul, Wu and Yang’s (2013) model.

Findings

This study reveals the behavioral differences in financial reporting quality between Sharia-compliant and non-compliant companies. According to the analyzes, Sharia compliance increases the financial reporting quality by decreasing the discretionary accruals and audit aggressiveness. This result is supported by the robustness tests.

Practical implications

Sharia compliance is not limited to business activity, financial restrictions and supervisory board for Sharia-compliant companies. It also enhances the companies’ financial reporting quality. Robustness analysis also showed that the International Financial Reporting Standards (IFRS) increases the financial reporting quality by reducing discretionary accruals and audit aggressiveness.

Originality/value

This study contributes to the accounting literature by providing an insight on the use of Islamic financial instruments. The empirical results also show that the use of IFRS and Islamic financial instruments decreases the discretionary accruals and audit aggressiveness.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 14 no. 1
Type: Research Article
ISSN: 1753-8394

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Article
Publication date: 19 December 2019

Rofikoh Rokhim and Irma Octaviani

This paper aims to examine whether Sharia mutual fund managers are able to gain abnormal returns from what is called the Ramadhan effect.

Abstract

Purpose

This paper aims to examine whether Sharia mutual fund managers are able to gain abnormal returns from what is called the Ramadhan effect.

Design/methodology/approach

The authors use GARCH regression on daily data of domestic Sharia mutual fund performance in Indonesia and Malaysia over the period of 2007-2017.

Findings

The authors find that the Ramadhan effect is not a strong predictor of Sharia fund excess return in Indonesia and Malaysia, and they identify a positive Ramadhan abnormal return on the Malaysia Sharia Equity Fund. This result shows there is size effect on sharia fund excess return in Indonesia and value effect on Sharia Balanced Fund in both markets. It is suggested that the effect of market excess return in Indonesia is stronger than in Malaysia.

Research limitations/implications

The samples are limited to Sharia Funds over the period 2007-2017.

Practical implications

The authors suggest that size and value effect could be considered to develop the selection and timing strategies to explore the Ramadhan effect.

Originality/value

This study focuses on Indonesia and Malaysia, the two largest Islamic Stock Markets in Southeast Asia and examines specific on Sharia Mutual Fund (equity and balanced fund). It also compares differences in total performance measures between the Ramadhan period and non-Ramadhan period.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 13 no. 1
Type: Research Article
ISSN: 1753-8394

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Article
Publication date: 3 April 2020

Daniel Tumpal H. Aruan and Iin Wirdania

Muslim fashion clothing has become an attractive market both for marketers and fashion designers. When it comes to faith, religiosity factor becomes important; thus, it…

Abstract

Purpose

Muslim fashion clothing has become an attractive market both for marketers and fashion designers. When it comes to faith, religiosity factor becomes important; thus, it should be incorporated as a predictor for consumers' attitude and purchase intention. The purpose of this research is to examine the extent to which religiosity influences consumers' decision making when buying Muslim clothes. This research also examines whether religiosity could be observed from the type of clothes consumers wear.

Design/methodology/approach

The research was conducted in Indonesia as it was the most populous Muslim country in the world. Research subjects were Muslim women who wear Muslim clothes, both sharia and non-sharia.

Findings

A total of 379 Muslim women respondents participated in the survey. Using the structural equation model, the analysis finds that religiosity has a significant effect on consumers' buying decision, but the mediating influence of affective attitude and self-presentation is only found partially for specific types of clothes. The managerial implications of these findings are discussed in this paper.

Practical implications

Findings of this research would benefit Muslim clothes marketers and designers to correctly approach their target markets. Marketers can infer the religiosity level of consumers from the clothes they wear so that marketers need to provide communication programs with religious messages that could arouse consumers' affective attitudes that ultimately lead to buying decision. Marketers can focus more on handling their target customers based on the type of clothing segment: sharia and non-sharia.

Originality/value

This study discovered that, with respect to Muslim clothes, the five dimensions of religiosity promoted by Faulkner and De Jong (1966) can be reduced to two factors, namely faith and deeds. In addition, this study revealed that religiosity is strongly correlated with the type of clothing consumers wear so that marketers can implement strategies that are suitable for their target market.

Details

Journal of Fashion Marketing and Management: An International Journal, vol. 24 no. 1
Type: Research Article
ISSN: 1361-2026

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Article
Publication date: 13 July 2020

Issam Tlemsani, Farhi Marir and Munir Majdalawieh

This paper revolves around the usage of data analytics in the Qur’an and Hadith through a new text mining technique to answer the main research question of whether the…

Abstract

Purpose

This paper revolves around the usage of data analytics in the Qur’an and Hadith through a new text mining technique to answer the main research question of whether the activities and the data flows of the Murabaha financing contract is compatible with Sharia law. The purpose of this paper is to provide a thorough and comprehensive database that will be used to examine existing practices in Islamic banks’ and improve compliancy with Islamic financial law (Sharia).

Design/methodology/approach

To design a Sharia-compliant Murabaha business process originated on text mining, the authors start by identifying the factors deemed necessary in their text mining techniques of both texts; using a four-step strategy to analyze those text mining analytics; then, they list the three basic approaches in text mining used for new knowledge discovery in databases: the co-occurrence approach based on the recursive co-occurrence algorithm; the machine learning or statistical-based; and the knowledge-based. They identify any variation and association between the Murabaha business processes produced using text mining against the one developed through data collection.

Findings

The main finding attained in this paper is to confirm the compatibility of all activities and the data flows in the Murabaha financing contract produced using data analytics of the Quran and Hadith texts against the Murabaha business process that was developed based on data collection. Another key finding is revealing some shortcomings regarding Islamic banks business process compliance with Sharia law.

Practical implications

Given Murabaha as the most popular mode of Islamic financing with more than 75% in total transactions, this research has managed to touch-base on an area that is interesting to the vast majority of those dealing with Islamic finance instruments. By reaching findings that could improve the existing Islamic Murabaha business process and concluding on Sharia compliance of the existing Murabaha business process, this research is quite relevant and could be used in practice as well as in influencing public policy. In fact, Islamic Sharia law experts, Islamic finance professionals and Islamic banks may find the results of this study very useful in improving at least one aspect of the Islamic finance transactions.

Originality/value

By using a novel, fresh text mining methods built on recursive occurrence of synonym words from the Qur’an and Hadith to enrich Islamic finance, this research study can claim to have been the first of its kind in using machine learning to mine the Quran, Hadith and in extracting valuable knowledge to support and consolidate the Islamic financial business processes and make them more compliant with the i.

Details

Journal of Islamic Accounting and Business Research, vol. 11 no. 9
Type: Research Article
ISSN: 1759-0817

Keywords

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Article
Publication date: 11 December 2019

Ahmad Abbas and Ainun Arizah

The purpose of this paper is to analyze marketability constructed from market share and concentration and to test its effect on the profitability and the mediation effects…

Abstract

Purpose

The purpose of this paper is to analyze marketability constructed from market share and concentration and to test its effect on the profitability and the mediation effects of profit‒loss sharing under stewardship theory.

Design/methodology/approach

This research employs data of financial statements published by ten sharia commercial banks listed in the Indonesia Financial Services Authority during the period 2011–2016. The data are analyzed into path analysis model using multiple mediators.

Findings

The result reveals that sharia banks’ marketability in Indonesia tends to be low. Based on the test of significance through Partial Least Square, it is found that marketability has a positive effect on the level of profitability, indicating that market share and concentration of sharia banks positively lead the change on the level of Return on Asset and Return on Equity. This paper further identifies the mediation effects emerged through mudharabah and musharakah. The results point out that mudharabah has a partial effect and musharakah has a competitive effect on the relationship between market share and profitability.

Practical implications

This paper can be a decision-maker for Central Bank and Financial Services Authority for encouraging sharia banks to enhance the power market through the mode of finances with profit‒loss sharing.

Originality/value

The growth of sharia banks is currently becoming highlight of the literature of sharia banks. This paper provides insights into stewardship theory that sharia banking management provides the concept of the alignment of interest.

Details

Asian Journal of Accounting Research, vol. 4 no. 2
Type: Research Article
ISSN: 2443-4175

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Article
Publication date: 15 August 2016

Zakaria Boulanouar and Faisal Alqahtani

The purpose of this paper is to explore the existence of underpricing in the cooperative insurance sector in the Saudi Arabian market and to examine whether Sharia

Abstract

Purpose

The purpose of this paper is to explore the existence of underpricing in the cooperative insurance sector in the Saudi Arabian market and to examine whether Sharia compliance requirements have an impact on the level of underpricing.

Design/methodology/approach

Underpricing and the effect of Sharia compliance are analysed using a comprehensive sample of 33 insurance companies with data collected between 2007 and 2013, after taking into account market movements, as well as some factors well-known in the literature.

Findings

The authors find that underpricing not only exists but also is among the highest in the world (455 per cent), which contradicts the literature on initial public offerings (IPOs)’ pricing in highly regulated sectors. In light of one of the other findings of the authors, namely, the small number of insurance underwriters, the authors attribute these very high levels of underpricing in part to the monopsony power of insurance underwriters in Saudi Arabia. Regarding the Sharia compliance effect, they find that it does not significantly reduce the underpricing of insurance offerings. The authors interpret this as the fact that Sharia status might not be taken into account by underwriters when they price the offerings of insurance companies, due to a major drawback in the implementing regulations of cooperative insurance which have been highly criticised by practitioners.

Research limitations/implications

Future research should try to include more factors that might explain the underpricing and its determinants. Two important recommendations flowing from this study for regulatory and supervisory institutions are the need to improve disclosure and transparency conditions and to work towards reducing the monopsony power enjoyed by the underwriters. As for Sharia effect, the Saudi central bank should resolve the issue of Sharia compliance by adopting one of the Sharia-friendly models suggested by Islamic finance scholars, such as wakala or mudaraba.

Originality/value

To the best of authors’ knowledge, this paper is among the first to offer empirical evidence of the impact of Sharia compliance on the initial return of the IPOs of cooperative insurance firms.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 9 no. 3
Type: Research Article
ISSN: 1753-8394

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Article
Publication date: 8 May 2018

Muhammad Tariq Majeed and Abida Zainab

Islamic banks provide an alternative financial system based on Sharia’h (Islamic law). However, critics argue that operation at Islamic banks is violating Sharia’h

Abstract

Purpose

Islamic banks provide an alternative financial system based on Sharia’h (Islamic law). However, critics argue that operation at Islamic banks is violating Sharia’h particularly in terms of provision of interest free services, risk sharing and legal contract. The purpose of this paper is to empirically evaluate the Sharia’h practice at Islamic banks in Pakistan by considering some basic principles of Sharia’h.

Design/methodology/approach

Primary data are collected from 63 branches of Islamic banks in Pakistan. Questionnaire is used as an instrument. The study uses structural equation modeling that includes confirmatory factor analysis and regression analysis. Data are codified and analyzed using SPSS and Amos.

Findings

This study finds that Islamic banks are providing interest free services, ensuring that transactions and contracts offered by Islamic banks are legal and offering conflict-free environment to customers. In contrast, estimated results expose that Islamic banks are not sharing risk and Sharia’h supervisory board is not performing its role perfectly. Similarly, it is found that organization and distribution of zakat and qard-ul-hassan are weak at Islamic banks.

Research limitations/implications

Data are collected from Islamabad federal capital of Pakistan that hold just 5 per cent share of Islamic banking industry. This small share may not provide true picture of Islamic banking sector.

Practical implications

To ensure risk sharing, Islamic banking industry must consider the development of new modes of financing and innovation of more products based on Sharia’h. State Bank of Pakistan should ensure separate regulatory framework that enable Islamic banks to provide qard-ul-hassan, organize and allocate zakat.

Originality/value

This paper discusses the perception of bankers, who are actually the executors, about Shariah’s practices at Islamic banks in Pakistan. There are not many discussions on this topic that could be found, and hence this could be considered as a significant contribution by this paper to the existing literature of Islamic finance.

Details

Journal of Islamic Accounting and Business Research, vol. 9 no. 3
Type: Research Article
ISSN: 1759-0817

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