{"title":"The potential of Islamic financing in making financial development more entrepreneurship friendly","authors":"Hadia Sohail, Noman Arshed","doi":"10.1108/jiabr-07-2023-0206","DOIUrl":null,"url":null,"abstract":"<h3>Purpose</h3>\n<p>Literature has pointed that conventional financial development theories have inconclusive role on motivating new businesses. New ventures often consider the conventional system that passes through risk and provides fixed-interest lending as a burden. Comparatively, Islamic finance contributes using participative and equitable substitute for startups and has a potential in promoting new businesses. This study aims to investigate the holistic financial development index quadratic effect on entrepreneurship and include the moderating role of Islamic financing at national level.</p><!--/ Abstract__block -->\n<h3>Design/methodology/approach</h3>\n<p>Islamic banks of 21 nations constitute the unbalanced panel data. Financial development and entrepreneurship indices were developed using factor analysis and panel median regression to estimate the nonlinear financial market development effects and Islamic financing moderation model.</p><!--/ Abstract__block -->\n<h3>Findings</h3>\n<p>The results indicated that low financial market development is entrepreneurship deterring because of interest burden effect, which could be eased with a proportional increase in the Islamic financing, which is participative. The moderating effect has led to the categorization of the sample countries into entrepreneurship promoting and entrepreneurship discouraging with respect to the current incidence of financial market development and Islamic financing, which can help policymakers in understanding the entrepreneurship promoting combination of financial development and Islamic financing.</p><!--/ Abstract__block -->\n<h3>Research limitations/implications</h3>\n<p>Central banks and <em>Shari’ah</em> advisory councils can adopt Islamic financing transition in the national financial inclusion policy for new business facilitation.</p><!--/ Abstract__block -->\n<h3>Originality/value</h3>\n<p>This study is instrumental in exploring the assessment of introducing Islamic financing while developing the financial sector on multidimensional entrepreneurship.</p><!--/ Abstract__block -->","PeriodicalId":46046,"journal":{"name":"Journal of Islamic Accounting and Business Research","volume":"93 1","pages":""},"PeriodicalIF":2.5000,"publicationDate":"2024-02-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Islamic Accounting and Business Research","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1108/jiabr-07-2023-0206","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
Purpose
Literature has pointed that conventional financial development theories have inconclusive role on motivating new businesses. New ventures often consider the conventional system that passes through risk and provides fixed-interest lending as a burden. Comparatively, Islamic finance contributes using participative and equitable substitute for startups and has a potential in promoting new businesses. This study aims to investigate the holistic financial development index quadratic effect on entrepreneurship and include the moderating role of Islamic financing at national level.
Design/methodology/approach
Islamic banks of 21 nations constitute the unbalanced panel data. Financial development and entrepreneurship indices were developed using factor analysis and panel median regression to estimate the nonlinear financial market development effects and Islamic financing moderation model.
Findings
The results indicated that low financial market development is entrepreneurship deterring because of interest burden effect, which could be eased with a proportional increase in the Islamic financing, which is participative. The moderating effect has led to the categorization of the sample countries into entrepreneurship promoting and entrepreneurship discouraging with respect to the current incidence of financial market development and Islamic financing, which can help policymakers in understanding the entrepreneurship promoting combination of financial development and Islamic financing.
Research limitations/implications
Central banks and Shari’ah advisory councils can adopt Islamic financing transition in the national financial inclusion policy for new business facilitation.
Originality/value
This study is instrumental in exploring the assessment of introducing Islamic financing while developing the financial sector on multidimensional entrepreneurship.
期刊介绍：
The journal provides a dynamic forum for the advancement of accounting and business knowledge based on Shari’ah and Islamic activities that have an impact on the welfare of society. JIABR publishes articles on the interplay between Islamic business ethics, accounting, auditing and governance, in promoting accountability, socio-economic justice (adl) and everlasting success (al-falah). It seeks to inform, among others, current theoretical and empirical research and practice in Islamic accounting, auditing and corporate governance, management of Islamic organizations, accounting regulation and policy for Islamic institutions, Shari’ah auditing and corporate governance, financial and non-financial performance measurement and disclosure in Islamic institutions and organizations. All styles of research, theoretical and empirical, case studies, practice-based papers and research notes that are well written and falling within the journal''s scope, are generally welcomed by the journal. Scope/Coverage Development of accounting, auditing and corporate governance concepts based on Shari’ah Socio-political influence on accounting and auditing regulation and policy making for Islamic financial institutions and organizations Historical perspectives on Islamic accounting, auditing and financial management Critical analysis on issues and challenges on accounting disclosure and measurement, Shari’ah audit and corporate governance Controls and risks in Islamic organizations Financial and non-financial performance measurement and disclosure.
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