This study examines whether and how Islam has bearings on corporate liquidity (cash holdings). A review of 34,895 non-financial firms from 68 countries (12 Islamic countries and 56 non-Islamic countries) for the period 1996 -2011 reveals that cash is lower in Islamic countries than in non-Islamic countries. The positive effect of growth opportunities on cash is also weaker in Islamic countries than in non-Islamic countries, thereby indicating lower propensity to hoard cash for upcoming growth opportunities in the former than in the latter likely because corporate governance is stakeholder-based such that shareholder wealth maximization is not the corporate objective in Islamic countries. Furthermore, the negative effect of debt issuance on cash is stronger in Islamic countries than in non-Islamic countries, thereby signifying higher effectiveness of debt in reducing agency cost in the former than in the latter.
{"title":"Corporate Liquidity: Evidence from Islamic and non-Islamic Countries","authors":"N. Chen, Tsai-Chen Yang","doi":"10.25272/ijisef.644501","DOIUrl":"https://doi.org/10.25272/ijisef.644501","url":null,"abstract":"This study examines whether and how Islam has bearings on corporate liquidity (cash holdings). A review of 34,895 non-financial firms from 68 countries (12 Islamic countries and 56 non-Islamic countries) for the period 1996 -2011 reveals that cash is lower in Islamic countries than in non-Islamic countries. The positive effect of growth opportunities on cash is also weaker in Islamic countries than in non-Islamic countries, thereby indicating lower propensity to hoard cash for upcoming growth opportunities in the former than in the latter likely because corporate governance is stakeholder-based such that shareholder wealth maximization is not the corporate objective in Islamic countries. Furthermore, the negative effect of debt issuance on cash is stronger in Islamic countries than in non-Islamic countries, thereby signifying higher effectiveness of debt in reducing agency cost in the former than in the latter.","PeriodicalId":136568,"journal":{"name":"International Journal of Islamic Economics and Finance Studies","volume":"60 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122820301","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper has tried to assess the level of Shariah compliance in the operation of the Islamic Banks in Bangladesh. The data were collected from questionnaire survey on 400 respondents from six Islamic banks regarding banking operations and from personal interview with bank officials & regulators of the banks. Other data were attained from different journals, books, Qur’an, Sunnah and the websites of the sample banks. Descriptive statistics are used to analyze the data. Most of the Islamic banks are not complying with the shariah with respect to deposits, investments, audit and other activities. The underlying reasons for the non-compliance are the absence of mandatory Shariah guidelines, lack of Shariah scholarly officials, dual compliance, absence of penalties for non-compliance and some other external factors. If the Central bank and other regulatory bodies are concerned enough to form a uniform guideline for all the Islamic banks operating in Bangladesh, it will be easier for the Islamic banks to comply with Shariah. This is the sole study that deals with different areas of operations in the Islamic Banks to assess the shariah compliance. It has incorporated both survey and interview findings to assess the real picture.
{"title":"Level of Shariah Compliance in the Operation of Islamic Banks in Bangladesh: An Empirical Study","authors":"M. Karim, S. Shetu","doi":"10.25272/ijisef.755679","DOIUrl":"https://doi.org/10.25272/ijisef.755679","url":null,"abstract":"This paper has tried to assess the level of Shariah compliance in the operation of the Islamic Banks in Bangladesh. The data were collected from questionnaire survey on 400 respondents from six Islamic banks regarding banking operations and from personal interview with bank officials & regulators of the banks. Other data were attained from different journals, books, Qur’an, Sunnah and the websites of the sample banks. Descriptive statistics are used to analyze the data. Most of the Islamic banks are not complying with the shariah with respect to deposits, investments, audit and other activities. The underlying reasons for the non-compliance are the absence of mandatory Shariah guidelines, lack of Shariah scholarly officials, dual compliance, absence of penalties for non-compliance and some other external factors. If the Central bank and other regulatory bodies are concerned enough to form a uniform guideline for all the Islamic banks operating in Bangladesh, it will be easier for the Islamic banks to comply with Shariah. This is the sole study that deals with different areas of operations in the Islamic Banks to assess the shariah compliance. It has incorporated both survey and interview findings to assess the real picture.","PeriodicalId":136568,"journal":{"name":"International Journal of Islamic Economics and Finance Studies","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122281218","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Labor capital partnership is a financing model that contributes to social development. Although the mudaraba financing is a good alternative for interest-free financial system, the implementation ratio in participation banks is very low in the form of participation banks providing capital and the customer provides labor. This situation has not been handled as much as necessary in the literature, and the suggestions presented have been superficial. This research aims to raise awareness by evaluating possible causes from the perspective of participation bank. The research, which argues that mudaraba financing poses moral risk for participation banks, evaluated this claim by conducting semi-structured interviews with experts in the field within the framework of the relationship between moral risk and the legal infrastructure, informal transactions, commercial maturity level, economic conjuncture and audit concepts. As a result of the interviews and subsequent assessment, it has been concluded that participation banks do not have the infrastructure to implement the mudaraba financing and a new institution that operates differently from the participation banks must be established in order to implement this model in a sustainable manner. In the last section, policy recommendations have been presented in order to increase the applicability of mudaraba financing.
{"title":"The Evaluation of Implementation of Mudaraba Financing in Participation Banks in terms of Moral Hazard: The Case of Turkey","authors":"Muhlis Selman Saglam, Taha Eğri","doi":"10.25272/ijisef.689009","DOIUrl":"https://doi.org/10.25272/ijisef.689009","url":null,"abstract":"Labor capital partnership is a financing model that contributes to social development. Although the mudaraba financing is a good alternative for interest-free financial system, the implementation ratio in participation banks is very low in the form of participation banks providing capital and the customer provides labor. This situation has not been handled as much as necessary in the literature, and the suggestions presented have been superficial. This research aims to raise awareness by evaluating possible causes from the perspective of participation bank. The research, which argues that mudaraba financing poses moral risk for participation banks, evaluated this claim by conducting semi-structured interviews with experts in the field within the framework of the relationship between moral risk and the legal infrastructure, informal transactions, commercial maturity level, economic conjuncture and audit concepts. As a result of the interviews and subsequent assessment, it has been concluded that participation banks do not have the infrastructure to implement the mudaraba financing and a new institution that operates differently from the participation banks must be established in order to implement this model in a sustainable manner. In the last section, policy recommendations have been presented in order to increase the applicability of mudaraba financing.","PeriodicalId":136568,"journal":{"name":"International Journal of Islamic Economics and Finance Studies","volume":"147 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130687224","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Ethiopia has a substantial number of Muslims estimated more than 38 million. Ethiopia accommodated Islamic finance in its financial system through interest-free banking window in 2011 and Full-fledged interest-free banking by the end of 2019. This study aims to investigate the prospects and challenges of the newly adopted full-fledged interest-free banking system. For these purposes, several secondary data collected and analyzed descriptively. The result indicates that Islamic finance has a notable opportunity in Ethiopia. Unbanked huge customers, lofty demand, the profitability of IFB windows and the ability of under formation full-fledged interest-free banks to collect the minimum paid-up capital easily indicate the prospects. While negative perception toward Islamic finance, legal framework challenges like the exclusiveness of banking business activity, limitation on investment of banks, tax system and unavailability of controlling mechanism last but not least lack of experts and skilled resource are identified as the main impediments of the sector. Therefore, it is recommended to the government of Ethiopia to make accommodative adjustments on the legal frameworks to resolve the shortcomings and for educational institutions to provide programs, seminars, and training in the area of Islamic finance in order to produce experts that serve the sector.
{"title":"Interest Free Banking in Ethiopia: Prospects and Challenges","authors":"Suadiq Mehammed Hailu, Ibrahim Bushera","doi":"10.25272/ijisef.678972","DOIUrl":"https://doi.org/10.25272/ijisef.678972","url":null,"abstract":"Ethiopia has a substantial number of Muslims estimated more than 38 million. Ethiopia accommodated Islamic finance in its financial system through interest-free banking window in 2011 and Full-fledged interest-free banking by the end of 2019. This study aims to investigate the prospects and challenges of the newly adopted full-fledged interest-free banking system. For these purposes, several secondary data collected and analyzed descriptively. The result indicates that Islamic finance has a notable opportunity in Ethiopia. Unbanked huge customers, lofty demand, the profitability of IFB windows and the ability of under formation full-fledged interest-free banks to collect the minimum paid-up capital easily indicate the prospects. While negative perception toward Islamic finance, legal framework challenges like the exclusiveness of banking business activity, limitation on investment of banks, tax system and unavailability of controlling mechanism last but not least lack of experts and skilled resource are identified as the main impediments of the sector. Therefore, it is recommended to the government of Ethiopia to make accommodative adjustments on the legal frameworks to resolve the shortcomings and for educational institutions to provide programs, seminars, and training in the area of Islamic finance in order to produce experts that serve the sector.","PeriodicalId":136568,"journal":{"name":"International Journal of Islamic Economics and Finance Studies","volume":"28(2) 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130994424","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this article, we examine the nature of gold as a precious metal with regard to two basic issues: the gold is both money/ribevî (subject to interest) and merchandise. In this context, the reasons for the acceptance of gold as money within the framework of the chemical properties of gold were investigated. Then, the opinions of fuqaha (Islamic lawyers) about gold were discussed. In this regard, the convictions of the fuqaha who accept gold as ribevî are divided into two: A majority of them accepted gold as money while not raising any concern regarding the use of other goods as money. On the other hand, a minor group accepted only silver and gold as money and opposed to the use of other materials as money. The relevant opinion holders make up the majority of the classical philosophical doctrine. Among those who accepted gold as merchandise, Ibn Taymiyyah and Ibn Qayyimc considered only the ornaments of women, which is exempt from zakat (tax), in this class. Some of the modern-era researchers say that gold has completely lost its nature of being subject to interest today. In this article, we objectively evaluated and compared these expressed views by taking into account the evidence and the counterarguments.
{"title":"THE GOLD AS BEING MONEY AND MERCHANDISE FROM ISLAMIC LAW PERSPECTIVE","authors":"Yusuf Erdem Gezgi̇n","doi":"10.25272/ijisef.692914","DOIUrl":"https://doi.org/10.25272/ijisef.692914","url":null,"abstract":"In this article, we examine the nature of gold as a precious metal with regard to two basic issues: the gold is both money/ribevî (subject to interest) and merchandise. In this context, the reasons for the acceptance of gold as money within the framework of the chemical properties of gold were investigated. Then, the opinions of fuqaha (Islamic lawyers) about gold were discussed. In this regard, the convictions of the fuqaha who accept gold as ribevî are divided into two: A majority of them accepted gold as money while not raising any concern regarding the use of other goods as money. On the other hand, a minor group accepted only silver and gold as money and opposed to the use of other materials as money. The relevant opinion holders make up the majority of the classical philosophical doctrine. Among those who accepted gold as merchandise, Ibn Taymiyyah and Ibn Qayyimc considered only the ornaments of women, which is exempt from zakat (tax), in this class. Some of the modern-era researchers say that gold has completely lost its nature of being subject to interest today. In this article, we objectively evaluated and compared these expressed views by taking into account the evidence and the counterarguments.","PeriodicalId":136568,"journal":{"name":"International Journal of Islamic Economics and Finance Studies","volume":"41 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115384201","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Bu calisma, Islami hisse senedi endeksleri volatilitesinde uzun hafizanin varligini asimetrik model olan FIAPARCH modeli yardimiyla tespit etmek icin yapilmistir. Katilim 30 ve Dow Jones Islami Piyasalar Turkiye endekslerinin 15.05.2013 ile 15.05.2020 tarihleri arasindaki gunluk kapanis degerleri kullanilarak analiz gerceklestirilmistir. Uzun hafiza parametresi istatistiki olarak anlamli bulunmus ve iki endeks getiri serisinin, zayif da olsa uzun hafiza ozelligi sergiledigi tespit edilmistir. Uzun hafiza ozelliginin olmasi, iki endeks icin de Etkin Piyasa Hipotezi’nin gecerli olmadigi anlamina gelmektedir. Ayrica asimetri parametresi olan γ, her iki endeks icin de anlamli ve pozitif degerde belirlenmistir. Bu durum, negatif bilgi soklarinin volatilite uzerinde pozitif bilgi soklarindan daha baskin oldugunu ifade etmektedir.
{"title":"Testing Long Memory with Asymmetric Model in Islamic Index Volatility","authors":"Hidayet Güneş","doi":"10.25272/ijisef.746850","DOIUrl":"https://doi.org/10.25272/ijisef.746850","url":null,"abstract":"Bu calisma, Islami hisse senedi endeksleri volatilitesinde uzun hafizanin varligini asimetrik model olan FIAPARCH modeli yardimiyla tespit etmek icin yapilmistir. Katilim 30 ve Dow Jones Islami Piyasalar Turkiye endekslerinin 15.05.2013 ile 15.05.2020 tarihleri arasindaki gunluk kapanis degerleri kullanilarak analiz gerceklestirilmistir. Uzun hafiza parametresi istatistiki olarak anlamli bulunmus ve iki endeks getiri serisinin, zayif da olsa uzun hafiza ozelligi sergiledigi tespit edilmistir. Uzun hafiza ozelliginin olmasi, iki endeks icin de Etkin Piyasa Hipotezi’nin gecerli olmadigi anlamina gelmektedir. Ayrica asimetri parametresi olan γ, her iki endeks icin de anlamli ve pozitif degerde belirlenmistir. Bu durum, negatif bilgi soklarinin volatilite uzerinde pozitif bilgi soklarindan daha baskin oldugunu ifade etmektedir.","PeriodicalId":136568,"journal":{"name":"International Journal of Islamic Economics and Finance Studies","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129738583","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"From Homoeconomicus to Homo Islamicus: A Comparative Research","authors":"Ali Can Yenice","doi":"10.25272/ijisef.751251","DOIUrl":"https://doi.org/10.25272/ijisef.751251","url":null,"abstract":"","PeriodicalId":136568,"journal":{"name":"International Journal of Islamic Economics and Finance Studies","volume":"37 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122315825","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
İslam iktisadı çalışmalarına önemli katkıları olan Sabri Orman’ın çevirmenliğini üstlendiği kitap, İslam iktisat tarihi alanında Türkiye’deki mevcut çalışmaların yetersiz olması sebebiyle önemlidir. Çalışma, bu anlamda literatürdeki önemli bir boşluğu doldurmaktadır. Kitabın yazarı Duri, İslam tarihçisi olmakla beraber İslam ekonomisi ve sosyal tarihi ile ilgili birçok eser ortaya koymuştur. “İslam İktisat Tarihine Giriş” isimli kitap, Arapça kaleme alınmış olup Türkçe’ye tercüme edildiği gibi Almanca tercümesi de mevcuttur. Yazarın 1968 yılında kaleme aldığı çalışma 1991 yılında Türkçe’ ye çevrilmiştir (Tomar, 2016, ss. 348–350).
{"title":"İslam İktisat Tarihine Giriş","authors":"Saime Kavakçi","doi":"10.25272/ijisef.708021","DOIUrl":"https://doi.org/10.25272/ijisef.708021","url":null,"abstract":"İslam iktisadı çalışmalarına önemli katkıları olan Sabri Orman’ın çevirmenliğini üstlendiği kitap, İslam iktisat tarihi alanında Türkiye’deki mevcut çalışmaların yetersiz olması sebebiyle önemlidir. Çalışma, bu anlamda literatürdeki önemli bir boşluğu doldurmaktadır. Kitabın yazarı Duri, İslam tarihçisi olmakla beraber İslam ekonomisi ve sosyal tarihi ile ilgili birçok eser ortaya koymuştur. “İslam İktisat Tarihine Giriş” isimli kitap, Arapça kaleme alınmış olup Türkçe’ye tercüme edildiği gibi Almanca tercümesi de mevcuttur. Yazarın 1968 yılında kaleme aldığı çalışma 1991 yılında Türkçe’ ye çevrilmiştir (Tomar, 2016, ss. 348–350).","PeriodicalId":136568,"journal":{"name":"International Journal of Islamic Economics and Finance Studies","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130546984","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Murat Bozkurt, Nurullah Altintaş, Fatih Yardımcıoğlu
Son yillarda, finansal gelisme ve ekonomik buyume arasindaki iliski, yazinda dikkat ceken konulardan biri haline gelmistir. Turkiye’de de katilim bankaciligi olarak bilinen Islami bankaciligin finans piyasasi icerisinde agirliginin artmasi ile finansal gelisme ve ekonomik buyume iliskisi katilim bankaciligi ozelinde tartisilmaya baslanmistir. Bu calismada hem katilim bankaciliginin hem de geleneksel bankaciligin gelisiminin ekonomik buyumeye etkisi 2005-2016 donemi ceyrek verileriyle ARDL Sinir Testi yaklasimi ile incelenmistir. Elde edilen sonuclara gore katilim bankaciligi ve geleneksel bankaciligin gelisimi ile ekonomik buyume arasinda dogrusal olmayan bir iliski tespit edilmistir. Yapilan analizler ve tespitler neticesinde bazi oneriler sunulmustur. Bu dogrultuda ekonomik buyumeyi artirmada katilim bankaciliginin gelistirilmesi ve derinlestirilmesi onerilmektedir.
{"title":"KATILIM BANKACILIĞI VE KONVANSİYONEL BANKACILIĞIN EKONOMİK BÜYÜME ÜZERİNDEKİ ETKİLERİ: TÜRKİYE ÜZERİNE BİR İNCELEME","authors":"Murat Bozkurt, Nurullah Altintaş, Fatih Yardımcıoğlu","doi":"10.25272/ijisef.637258","DOIUrl":"https://doi.org/10.25272/ijisef.637258","url":null,"abstract":"Son yillarda, finansal gelisme ve ekonomik buyume arasindaki iliski, yazinda dikkat ceken konulardan biri haline gelmistir. Turkiye’de de katilim bankaciligi olarak bilinen Islami bankaciligin finans piyasasi icerisinde agirliginin artmasi ile finansal gelisme ve ekonomik buyume iliskisi katilim bankaciligi ozelinde tartisilmaya baslanmistir. Bu calismada hem katilim bankaciliginin hem de geleneksel bankaciligin gelisiminin ekonomik buyumeye etkisi 2005-2016 donemi ceyrek verileriyle ARDL Sinir Testi yaklasimi ile incelenmistir. Elde edilen sonuclara gore katilim bankaciligi ve geleneksel bankaciligin gelisimi ile ekonomik buyume arasinda dogrusal olmayan bir iliski tespit edilmistir. Yapilan analizler ve tespitler neticesinde bazi oneriler sunulmustur. Bu dogrultuda ekonomik buyumeyi artirmada katilim bankaciliginin gelistirilmesi ve derinlestirilmesi onerilmektedir.","PeriodicalId":136568,"journal":{"name":"International Journal of Islamic Economics and Finance Studies","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123099695","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
It is more or less agreed that even though the rising trend has occurred in the stock markets of emerging countries during 1990s, those in the emerging Islamic countries (EIC), with the common characteristics of small size, less liquidity, less efficiency, high cost of capital and volatility, have not been able to perform at the same pace. The proponents of stock market liberalization (SML) prescribes liberalization as a full-fledge solution to the problems of the EIC, whereas the limited number of studies illustrate mixed results. Against this backdrop, this study aims to examine the effects of SML on the development of stock markets in EIC. Relying on panel data techniques on the sample of 7 EIC over the years 1989 to 2008, the results demonstrate that SML significantly increases stock market size and liquidity, hence contributing to the development of stock markets in the EIC. With these results, the study produces policy implications suggesting that SML has been beneficial to the stock markets and further liberalization policies should be implemented to deepen and broaden the stock markets in the EIC.
{"title":"Stock Market Liberalization: Effects on Stock Market Development in the Emerging Islamic Countries","authors":"B. Ilhan","doi":"10.25272/ijisef.629755","DOIUrl":"https://doi.org/10.25272/ijisef.629755","url":null,"abstract":"It is more or less agreed that even though the rising trend has occurred in the stock markets of emerging countries during 1990s, those in the emerging Islamic countries (EIC), with the common characteristics of small size, less liquidity, less efficiency, high cost of capital and volatility, have not been able to perform at the same pace. The proponents of stock market liberalization (SML) prescribes liberalization as a full-fledge solution to the problems of the EIC, whereas the limited number of studies illustrate mixed results. Against this backdrop, this study aims to examine the effects of SML on the development of stock markets in EIC. Relying on panel data techniques on the sample of 7 EIC over the years 1989 to 2008, the results demonstrate that SML significantly increases stock market size and liquidity, hence contributing to the development of stock markets in the EIC. With these results, the study produces policy implications suggesting that SML has been beneficial to the stock markets and further liberalization policies should be implemented to deepen and broaden the stock markets in the EIC.","PeriodicalId":136568,"journal":{"name":"International Journal of Islamic Economics and Finance Studies","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134120401","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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