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1 – 7 of 7The purpose of this study is to examine the effect of Islamic banks (IBs) and macroeconomic variables on economic growth in Saudi Arabia, the United Arab Emirates, Kuwait…
Abstract
Purpose
The purpose of this study is to examine the effect of Islamic banks (IBs) and macroeconomic variables on economic growth in Saudi Arabia, the United Arab Emirates, Kuwait, Malaysia, Qatar, Bahrain and Bangladesh.
Design/methodology/approach
Based on these criteria, 672 observations from 24 IBs in Saudi Arabia, the United Arab Emirates, Kuwait, Malaysia, Qatar, Bahrain and Bangladesh were chosen for further investigation. Time series analysis is a well-known method for determining if model variables are stationary and how long-term relationships function through cointegration analysis. This study uses impulse response function (IRF) and variance decomposition (VD) methodologies to demonstrate how each macroeconomic variable shock influences the short-term dynamic path of all system variables.
Findings
Islamic banking promotes economic growth, especially in Saudi Arabia, the UAE, Kuwait, Malaysia, Qatar, Bahrain and Bangladesh. The findings of the Islamic banking VDC test have a direct and long-term effect on economic growth.
Research limitations/implications
The literature on this topic can be improved in a number of ways, including by adopting a more robust method to analyze over a longer time frame. By researching specific financing in various areas of the economy, one can gain a deeper understanding of Islamic financing. This will enable the identification of sectors that contribute to economic expansion. Future research should examine combining nations with pure Islam and dual-banking systems to acquire sufficient data.
Practical implications
This paper has practice and research implications. It recommends adopting the nation’s successful experiment with the Islamic banking system as a model for attaining economic growth through Islamic financing. To replicate this successful experiment, government-based decision-makers and monetary policy experts must collaborate to make Islamic money flows simple and rapid through financial channels that enhance economic growth.
Originality/value
The study of the contribution of Islamic banking to economic growth in developing nations, particularly those with the highest total assets (TAs) and total deposits (TDs) in the world, remains of modest value. To the best of the authors’ knowledge, this is the first study to empirically assess the impact of IBs in developing nations, particularly those with the highest TAs and TDs in the world, on economic growth as measured by gross domestic product (GDP).
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Muhammad Saeed Meo, Kiran Jameel, Mohammad Ashraful Ferdous Chowdhury and Sajid Ali
The purpose of the research is to analyze the impact of world uncertainty and pandemic uncertainty on Islamic financial markets. For representing Islamic financial markets four…
Abstract
Purpose
The purpose of the research is to analyze the impact of world uncertainty and pandemic uncertainty on Islamic financial markets. For representing Islamic financial markets four different Islamic indices (DJ Islamic index, DJ Islamic Asia–Pacific index, DJ Islamic-Europe index and DJ Islamic-US) are taken.
Design/methodology/approach
The study employs quantile-on-quantile regression approach to see the overall dependence structure of variables based on quarterly data ranging from 1996Q1 to 2020Q4. This technique considers how quantiles of world uncertainty and pandemic uncertainty asymmetrically affect the quantiles of Islamic stocks by giving an appropriate framework to apprehend the overall dependence structure.
Findings
The findings of the study confirm a strong negative impact of world uncertainty and world pandemic uncertainty on regional Islamic stock indices but the strength of the relationship varies according to economic conditions and across the regions. However, the world pandemic effect remains the same and does not change. Conversely, pandemic uncertainty has a larger effect on Islamic indices as compared to world uncertainty.
Practical implications
Our findings have significant implications for investors and policymakers to take proper steps before any uncertainty arise. A coalition of the central bank, government officials and investment bank regulators would be needed to tackle this challenge of uncertainty.
Originality/value
To the best of the authors' knowledge, none of the current works has considered the asymmetric impact of world and pandemic uncertainties on Islamic stock markets at both the bottom and upper quantiles of the distribution of data.
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This research investigates the Islamic banks’ intermediation role (e.g. branches and deposits) in financing. It also examines how financing contributes to the regions' economic…
Abstract
Purpose
This research investigates the Islamic banks’ intermediation role (e.g. branches and deposits) in financing. It also examines how financing contributes to the regions' economic growth and poverty alleviation as a predictor and mediator variable.
Design/methodology/approach
A total of 297 observations were extracted from 33 Indonesian districts and 14 Islamic banks during the period 2012–2020. Fixed-effect regression analysis was used to examine variable’s interactions.
Findings
The empirical results indicate that Islamic banks have adopted a channelling role towards redistributing capital from lender to borrower. Besides, there are crucial roles in developing economies and reducing poverty at the district level. This study also reinforces the critical role of financing in mediating the relationship between branches and deposits as predictor variables and GDP and poverty as outcome variables.
Research limitations/implications
The current study was limited to Indonesian Islamic banks and the district’s perspective. Future research needs to cover sub-districts and other poverty measurements (e.g. human education and development perspectives), including conventional and Islamic banks. It can help practitioners, regulators and researchers observe the dynamic behaviour of the banking sector to understand its role in the economic and social fields.
Practical implications
Bank managers and regulators should promote branches, deposits and financing. It also enlightens people about the essential role of Islamic banks and their fundamental operations in business and economics.
Originality/value
This study contributes to economic literature, bank managers and local governments' decision-making processes by developing and testing an economic growth and poverty model.
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Md. Abdul Kaium Masud, Mohammad Sharif Hossain, Mahfuzur Rahman, Mohammad Ashraful Ferdous Chowdhury and Mohammed Mizanur Rahman
Corporate corruption reporting (CCR) is an emerging issue of the corporation for measuring transparency, integrity and accountability to the stakeholders and society. The purpose…
Abstract
Purpose
Corporate corruption reporting (CCR) is an emerging issue of the corporation for measuring transparency, integrity and accountability to the stakeholders and society. The purpose of this paper is to examine the role of CCR and financial management responsibility regarding the issue of corruption control.
Design/methodology/approach
To explore the influences of corruption disclosure, this study considers the keywords-based content analysis of the listed financial firms of the Dhaka Stock Exchange in Bangladesh for 2012–2016. The research considers stakeholders and theoretical legitimacy lens for discussing corporate corruption disclosure. This study identified 143 self-driven keywords by classifying, analyzing and selecting the appropriate large set of keywords from the prior literature. This study examines 247 firm-year observations of all financial firms in Bangladesh using secondary data sources.
Findings
The results of the hierarchical regression analysis report that financial firms following Sharia principles have a negative and significant association with CCR, while Big4 has a positive and significant influence. Moreover, the interaction effect of Big4 on the relationship between Sharia principles and CCR is negative and insignificant. The findings reported that Islamic financial firms disclose less corruption information than conventional financial firms in Bangladesh.
Practical implications
This study findings are expected to significantly impact corporate management and policymakers of developing and highly corrupted economies to enhance corporate accountability, transparency and reputation. The regulatory body can consider the findings to promulgate anti-corruption reporting rules and regulations.
Originality/value
The authors believe the theoretical lens used to support the method and findings of this paper are unique and novel.
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Thabo J. Gopane, Noel T. Moyo and Lesego F. Setaka
Stirred by scant regard for market phases in portfolio performance assessments, the current paper investigates the active versus passive investment strategies under the bull and…
Abstract
Purpose
Stirred by scant regard for market phases in portfolio performance assessments, the current paper investigates the active versus passive investment strategies under the bull and bear market conditions in emerging markets focusing on South Africa as a case study.
Design/methodology/approach
Methodologically, the measures of Jensen's alpha and Treynor index are applied to the monthly returns of 20 funds from January 2010 to June 2022.
Findings
The results are enlightening; though they contradict developed market evidence, they are consistent with emerging market trends. The findings show that actively managed funds outperform the market benchmark and passive investing style under bear and normal market conditions. Passive investment strategy outperforms both market benchmark and actively investing style under bull market conditions.
Practical implications
In the face of improved market efficiency, increased liquidity and recent technological impact, the findings of this study have practical application. The study outcomes should inform and update global investors, especially asset managers interested in emerging markets; however, the limitations of the study should also be considered.
Originality/value
While limited studies consider market conditions when comparing and contrasting the performance of passive versus active investing, such consideration is lacking in emerging markets. The current study corrects this literature imbalance.
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Maria Elisabete Duarte Neves, Maria do Castelo Gouveia, Adriana Martins and Joaquim Carlos da Costa Pinho
The main goal of this paper is better understand the risk/return trade-off of investing in socially responsible investment funds (SRIF) and green investment funds (GIF).
Abstract
Purpose
The main goal of this paper is better understand the risk/return trade-off of investing in socially responsible investment funds (SRIF) and green investment funds (GIF).
Design/methodology/approach
To achieve our aim a green investment fund portfolio, a socially responsible investment portfolio and a conventional fund (CF) portfolio from the United States of America (USA) were selected to compare the efficiency of these three different portfolios, by using Value-Based Data Envelopment Analysis (DEA) methodology.
Findings
The results point out that SRIF and GIF are more efficient than CF. For five years, the CFs have not outperformed the GIF.
Originality/value
The results suggest that there is a growing awareness on the part of investors that sustainable companies are the companies that will allow a better quality of life and a more sustainable environment. It seems that somehow managers and investors are aware that the market will compensate them for thinking about a cleaner and more equitable world.
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Ruwan Adikaram and Julia Higgs
This study aims to demonstrate how pressures (incentives) in the audit environment can lower audit quality because of a breakdown between professionally skeptical (PS) judgment…
Abstract
Purpose
This study aims to demonstrate how pressures (incentives) in the audit environment can lower audit quality because of a breakdown between professionally skeptical (PS) judgment (risk assessment) and PS action (testing).
Design/methodology/approach
The authors used a Qualtrics-based experiment with attitude change as a proxy measure of cognitive dissonance (CD). The authors analyze the results using a one-way independent between-group ANOVA with post hoc tests and t-tests.
Findings
The authors find that auditors experience CD when they fail to take appropriate high PS action (audit tests) that are in line with high PS judgment (risk assessments). The motivational force to reduce CD drives auditors to revise their assessments upward (rank higher), lower diagnostic audit tests (PS actions) and lower risk assessments (PS judgments). This leads to lower overall professional skepticism, and hence lower audit quality.
Originality/value
This investigation provides an empirical investigation of Nelson’s (2009) model of professional skepticism and demonstrates a specific mechanism for how incentives in the audit environment lower audit quality. Based on the findings, treatments to enhance audit quality can benefit by strengthening the critical link between PS judgments (risk assessments) and PS actions (audit tests).
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