This paper investigates the impact of bank regulatory capital on Islamic bank risk using bank-level data from 29 countries and covering the period from 2004 to 2020. Applying the Generalized Method of Moments technique for dynamic panels, we discover that, on average, Islamic bank regulatory capital ratios exceed the level required by Basel III. Our findings provide evidence in support of the Moral Hazard Hypothesis; that is, there is a negative relationship between capital and risk. These findings indicate that Islamic banks are better protected against risk when they fulfil Basel III and IFSB regulatory capital requirements. According to our findings, authorities that aim to improve the financial stability of the banking industry should reinforce their policies and oblige banks to adhere to regulatory capital requirements during a crisis, such as COVID-19. Finally, we observe that different risk indicators have diverse correlations with regulatory capital, and our findings are robust across a variety of estimation methodologies.
{"title":"THE INFLUENCE OF BASEL III ON ISLAMIC BANK RISK","authors":"Xiaoling Ding, Razali Haron, Aznan Hasan","doi":"10.21098/jimf.v9i1.1590","DOIUrl":"https://doi.org/10.21098/jimf.v9i1.1590","url":null,"abstract":"This paper investigates the impact of bank regulatory capital on Islamic bank risk using bank-level data from 29 countries and covering the period from 2004 to 2020. Applying the Generalized Method of Moments technique for dynamic panels, we discover that, on average, Islamic bank regulatory capital ratios exceed the level required by Basel III. Our findings provide evidence in support of the Moral Hazard Hypothesis; that is, there is a negative relationship between capital and risk. These findings indicate that Islamic banks are better protected against risk when they fulfil Basel III and IFSB regulatory capital requirements. According to our findings, authorities that aim to improve the financial stability of the banking industry should reinforce their policies and oblige banks to adhere to regulatory capital requirements during a crisis, such as COVID-19. Finally, we observe that different risk indicators have diverse correlations with regulatory capital, and our findings are robust across a variety of estimation methodologies.","PeriodicalId":31622,"journal":{"name":"Journal of Islamic Monetary Economics and Finance","volume":"14 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77512498","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}
Galuh Tri Pambekti, Rizaldi Yusfiarto, Septy Setia Nugraha
The purpose of the study is to analyse the influence of the motives and benefits of participation in Rotating Savings and Credit Associations (ROSCAs) on household wealth and entrepreneurship through mediating community commitment. Structural equation modeling (SEM) was used on the data collected using purposive sampling and a sample of 225 respondents in the provinces of East Java, Central Java, West Java, D.I. Yogyakarta, and D.K.I. Jakarta. The results show that ROSCAs have a direct effect on entrepreneurial intention and may affect household wealth. It is also concluded that ROSCAs can be an instrument of Islamic social finance, as their characteristics are not burdensome to members. They involve the principle of cooperation, and are not affected by interest rates or inflation.
{"title":"ROSCAs THROUGH THE ISLAMIC COMMUNITY: AN ALTERNATIVE TO ENHANCING ENTREPRENEURSHIP AND WEALTH","authors":"Galuh Tri Pambekti, Rizaldi Yusfiarto, Septy Setia Nugraha","doi":"10.21098/jimf.v8i0.1371","DOIUrl":"https://doi.org/10.21098/jimf.v8i0.1371","url":null,"abstract":"The purpose of the study is to analyse the influence of the motives and benefits of participation in Rotating Savings and Credit Associations (ROSCAs) on household wealth and entrepreneurship through mediating community commitment. Structural equation modeling (SEM) was used on the data collected using purposive sampling and a sample of 225 respondents in the provinces of East Java, Central Java, West Java, D.I. Yogyakarta, and D.K.I. Jakarta. The results show that ROSCAs have a direct effect on entrepreneurial intention and may affect household wealth. It is also concluded that ROSCAs can be an instrument of Islamic social finance, as their characteristics are not burdensome to members. They involve the principle of cooperation, and are not affected by interest rates or inflation.","PeriodicalId":31622,"journal":{"name":"Journal of Islamic Monetary Economics and Finance","volume":"28 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-12-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87562935","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 research measures the efficiency of waqf funds managed by philanthropic institutions in Indonesia using the Data Envelopment Analysis (DEA) approach over the 2013-2021 period. The unit of analysis consists of nine philanthropic waqf institutions. In the measurement of efficiency, the study takes human resource expenses and operational costs as inputs and collection and distribution of waqf funds as outputs. The findings indicate that the efficiency of philanthropic organizations in handling waqf funds varies from year to year between 2013 and 2021. The paper also notes that the Covid pandemic has no substantial impact on the efficiency of the waqf institutions. Interestingly, regional institution clusters are more efficient than mass organization and national institution clusters.
{"title":"MEASURING THE EFFICIENCY OF WAQF FUND IN INDONESIA","authors":"A. Rusydiana, R. Sukmana, N. Laila","doi":"10.21098/jimf.v8i0.1650","DOIUrl":"https://doi.org/10.21098/jimf.v8i0.1650","url":null,"abstract":"This research measures the efficiency of waqf funds managed by philanthropic institutions in Indonesia using the Data Envelopment Analysis (DEA) approach over the 2013-2021 period. The unit of analysis consists of nine philanthropic waqf institutions. In the measurement of efficiency, the study takes human resource expenses and operational costs as inputs and collection and distribution of waqf funds as outputs. The findings indicate that the efficiency of philanthropic organizations in handling waqf funds varies from year to year between 2013 and 2021. The paper also notes that the Covid pandemic has no substantial impact on the efficiency of the waqf institutions. Interestingly, regional institution clusters are more efficient than mass organization and national institution clusters. ","PeriodicalId":31622,"journal":{"name":"Journal of Islamic Monetary Economics and Finance","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-12-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89290378","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 study examines repeated waqf contributions in Sabah State, Malaysia. Religious obligation, benevolence, and familiarity with and trust in the waqf institution are the variables that are expected to have a positive relationship with the repeated behaviour of giving waqf cash. These antecedents are drawn from previous empirical studies. A total of 200 respondents who have repeatedly contributed to cash waqf shared their opinions through a survey form distributed by using the "convenience sampling" method. The collected data were then tested employing variance-based structural equation modelling and the partial least squares path modelling method using SmartPLS 3.3 software. The results of the analysis show that all the variables, namely religious adherence, benevolence, familiarity with the waqf institution, and trust in the waqf institution significantly influence the behaviour of repeated cash waqf contributions. The study findings could be used by future researchers as a point of reference. In practice, waqf institutions could also benefit from the findings by better understanding their donors' wishes and preferences.
{"title":"REPEATED GIVING OF CASH WAQF: A CASE STUDY OF SABAH, MALAYSIA","authors":"Nurul Izzati Binti Justine, Mohamad Isa Abd Jalil","doi":"10.21098/jimf.v8i0.1448","DOIUrl":"https://doi.org/10.21098/jimf.v8i0.1448","url":null,"abstract":"This study examines repeated waqf contributions in Sabah State, Malaysia. Religious obligation, benevolence, and familiarity with and trust in the waqf institution are the variables that are expected to have a positive relationship with the repeated behaviour of giving waqf cash. These antecedents are drawn from previous empirical studies. A total of 200 respondents who have repeatedly contributed to cash waqf shared their opinions through a survey form distributed by using the \"convenience sampling\" method. The collected data were then tested employing variance-based structural equation modelling and the partial least squares path modelling method using SmartPLS 3.3 software. The results of the analysis show that all the variables, namely religious adherence, benevolence, familiarity with the waqf institution, and trust in the waqf institution significantly influence the behaviour of repeated cash waqf contributions. The study findings could be used by future researchers as a point of reference. In practice, waqf institutions could also benefit from the findings by better understanding their donors' wishes and preferences.","PeriodicalId":31622,"journal":{"name":"Journal of Islamic Monetary Economics and Finance","volume":"93 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-12-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73589000","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}
Norlaila Mazura Hj. Mohaiyadin, A. Aman, Mohd Rizal Palil, Suzana Muhamad Said
This study identifies how blockchain technology can address accountability and transparency challenges in waqf management system by using institutional theory and Islamic institutional logic. An interpretative qualitative research approach is employed, with case studies of Malaysian public university waqf administrators, and data analysis is performed using open, axial, and selective coding. The findings suggest that in terms of coercive isomorphism there are two transparency challenges related to blockchain solutions in the waqf management system: 1) errors in the issuance of receipts (process), which are expected to be overcome by blockchain solutions in the form of individual network technology and ID identifiers; and 2) difficulties in waqf distribution (process), which are predicted to be solved by blockchain solutions in the form of controlling tools, public ledgers, and obtaining waqf distribution data. In normative isomorphism, there are two accountability challenges with blockchain solutions in the waqf management system: 1) difficulties in controlling waqf activities (process), which are expected to be overcome by blockchain solutions which allow internal control; and 2) decisions on waqf distribution (output), which should be solved by blockchain solutions which allow awareness among stakeholders of waqf distribution. In mimetic isomorphism, there is one accountability challenge in the process which has blockchain solutions in the waqf management system, namely system integration, which is predicted to be overcome by a blockchain solution related to traceability. The contributions of the study include extending institutional theory and Islamic institutional logic, and providing blockchain best practices for waqf institutions in addressing accountability and transparency challenges.
{"title":"ADDRESSING ACCOUNTABILITY AND TRANSPARENCY CHALLENGES IN WAQF MANAGEMENT USING BLOCKCHAIN TECHNOLOGY","authors":"Norlaila Mazura Hj. Mohaiyadin, A. Aman, Mohd Rizal Palil, Suzana Muhamad Said","doi":"10.21098/jimf.v8i0.1413","DOIUrl":"https://doi.org/10.21098/jimf.v8i0.1413","url":null,"abstract":"This study identifies how blockchain technology can address accountability and transparency challenges in waqf management system by using institutional theory and Islamic institutional logic. An interpretative qualitative research approach is employed, with case studies of Malaysian public university waqf administrators, and data analysis is performed using open, axial, and selective coding. The findings suggest that in terms of coercive isomorphism there are two transparency challenges related to blockchain solutions in the waqf management system: 1) errors in the issuance of receipts (process), which are expected to be overcome by blockchain solutions in the form of individual network technology and ID identifiers; and 2) difficulties in waqf distribution (process), which are predicted to be solved by blockchain solutions in the form of controlling tools, public ledgers, and obtaining waqf distribution data. In normative isomorphism, there are two accountability challenges with blockchain solutions in the waqf management system: 1) difficulties in controlling waqf activities (process), which are expected to be overcome by blockchain solutions which allow internal control; and 2) decisions on waqf distribution (output), which should be solved by blockchain solutions which allow awareness among stakeholders of waqf distribution. In mimetic isomorphism, there is one accountability challenge in the process which has blockchain solutions in the waqf management system, namely system integration, which is predicted to be overcome by a blockchain solution related to traceability. The contributions of the study include extending institutional theory and Islamic institutional logic, and providing blockchain best practices for waqf institutions in addressing accountability and transparency challenges.","PeriodicalId":31622,"journal":{"name":"Journal of Islamic Monetary Economics and Finance","volume":"42 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-12-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86555735","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 study examines the influences of Islamic microfinancing, human capital development, and information and communication technology (ICT) usage on the performance of Malaysian women micro-entrepreneurs funded by an Islamic microfinance institution (IMFI). It considers Amanah Ikhtiar Malaysia (AIM) as the study setting and adopts a quantitative approach involving 120 women micro-entrepreneurs. The questionnaire was distributed to women micro-entrepreneurs in Selangor state employing a convenience sampling method. The model was analysed utilising the partial least squares structural equation model (PLS-SEM). The findings indicate that Islamic microfinancing, human capital, and ICT usage positively influence the performance of women micro-entrepreneurs. The empirical findings enhance the literature by extending the resource-based view (RBV), a soft theory in the organisational theory literature, by incorporating Islamic microfinancing in the context. It is hoped the study will assist IMFIs and governments in strengthening infrastructures, developing comprehensive business strategies, and educating women micro-entrepreneurs about the possibilities of the digital economy for long-term business sustainability and development.
{"title":"THE EFFECTS OF ISLAMIC MICROFINANCING, HUMAN CAPITAL AND ICT USAGE ON WOMEN MICRO-ENTREPRENEURS’ PERFORMANCE IN MALAYSIA","authors":"N. Hamdan, Salina Kassim","doi":"10.21098/jimf.v8i0.1421","DOIUrl":"https://doi.org/10.21098/jimf.v8i0.1421","url":null,"abstract":"This study examines the influences of Islamic microfinancing, human capital development, and information and communication technology (ICT) usage on the performance of Malaysian women micro-entrepreneurs funded by an Islamic microfinance institution (IMFI). It considers Amanah Ikhtiar Malaysia (AIM) as the study setting and adopts a quantitative approach involving 120 women micro-entrepreneurs. The questionnaire was distributed to women micro-entrepreneurs in Selangor state employing a convenience sampling method. The model was analysed utilising the partial least squares structural equation model (PLS-SEM). The findings indicate that Islamic microfinancing, human capital, and ICT usage positively influence the performance of women micro-entrepreneurs. The empirical findings enhance the literature by extending the resource-based view (RBV), a soft theory in the organisational theory literature, by incorporating Islamic microfinancing in the context. It is hoped the study will assist IMFIs and governments in strengthening infrastructures, developing comprehensive business strategies, and educating women micro-entrepreneurs about the possibilities of the digital economy for long-term business sustainability and development.","PeriodicalId":31622,"journal":{"name":"Journal of Islamic Monetary Economics and Finance","volume":"241 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-12-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76128891","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}
Izra Berakon, Lu’liyatul Mutmainah, Abdul Qoyum, Hendy Mustiko Aji
Cash Waqf-Linked Sukuk (CWLS), which integrates cash waqf instruments and sovereign Sukuk, is an innovative Islamic investment product with social and spiritual dimensions. This study investigates public intention to participate in Retail CWLS (SWR) using the Technology Acceptance Model (TAM) framework with the addition of other relevant constructs. An online survey was conducted using the purposive sampling technique and involved 130 respondents. The data were analysed using Partial Least Squares Structural Equation Modeling (PLS-SEM) supported by WarpPLS. The results indicate that Perceived Ease of Use (PEOU), Perceived Usefulness (PU), Perceived Transparency (PT), and Trust in the Indonesian Waqf Board and Waqf Institutions have a significant positive effect on individual Intention to participate in Retail CWLS. Furthermore, this study reveals that Trust could partially mediate the relationship between PU and individual Intention. However, Religiosity fails to moderate the relationship between PU and individual Intention to purchase SWR. The study also demonstrated other complementary statistical outputs such as split-sample, non-linear relationships among latent variables, effect size, and the Q-squared coefficient to ensure that the processed data were robust. Also, this finding indirectly implies that CWLS is not only targeted at the Muslim community but also for general investors from other religions and beliefs.
{"title":"MUSLIM INTENTION TO PARTICIPATE IN RETAIL CWLS: THE TEST OF MEDIATION AND MODERATION EFFECTS","authors":"Izra Berakon, Lu’liyatul Mutmainah, Abdul Qoyum, Hendy Mustiko Aji","doi":"10.21098/jimf.v8i0.1427","DOIUrl":"https://doi.org/10.21098/jimf.v8i0.1427","url":null,"abstract":"Cash Waqf-Linked Sukuk (CWLS), which integrates cash waqf instruments and sovereign Sukuk, is an innovative Islamic investment product with social and spiritual dimensions. This study investigates public intention to participate in Retail CWLS (SWR) using the Technology Acceptance Model (TAM) framework with the addition of other relevant constructs. An online survey was conducted using the purposive sampling technique and involved 130 respondents. The data were analysed using Partial Least Squares Structural Equation Modeling (PLS-SEM) supported by WarpPLS. The results indicate that Perceived Ease of Use (PEOU), Perceived Usefulness (PU), Perceived Transparency (PT), and Trust in the Indonesian Waqf Board and Waqf Institutions have a significant positive effect on individual Intention to participate in Retail CWLS. Furthermore, this study reveals that Trust could partially mediate the relationship between PU and individual Intention. However, Religiosity fails to moderate the relationship between PU and individual Intention to purchase SWR. The study also demonstrated other complementary statistical outputs such as split-sample, non-linear relationships among latent variables, effect size, and the Q-squared coefficient to ensure that the processed data were robust. Also, this finding indirectly implies that CWLS is not only targeted at the Muslim community but also for general investors from other religions and beliefs.","PeriodicalId":31622,"journal":{"name":"Journal of Islamic Monetary Economics and Finance","volume":"47 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-12-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79151773","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}
The Capital Asset Pricing Model (CAPM), which has interest rates in its specification, can be deemed non-Shariah compliant. Therefore, the sukuk rate has been proposed to replace these rates in CAPM. This study analyses portfolio modelling by involving two essential elements in Islamic principles, namely zakat and purification. The concept of purification has been applied in the Shariah stock selection process in Indonesia, while at the same time, zakat has been widely socialised in stock investment. The study highlights two models that consider the concept of zakat reduction and the purification factors for portfolios in the Indonesian stock market. According to the robustness tests conducted, the proposed Shariah-compliant asset pricing model developed in this study is valid. Zakat reduction and purification factor integration in mathematical models can be applied in portfolio modelling.
{"title":"CAN ZAKAT AND PURIFICATION BE EMPLOYED IN PORTFOLIO MODELLING?","authors":"R. Subekti, Abdurakhman Abdurakhman, D. Rosadi","doi":"10.21098/jimf.v8i0.1418","DOIUrl":"https://doi.org/10.21098/jimf.v8i0.1418","url":null,"abstract":"The Capital Asset Pricing Model (CAPM), which has interest rates in its specification, can be deemed non-Shariah compliant. Therefore, the sukuk rate has been proposed to replace these rates in CAPM. This study analyses portfolio modelling by involving two essential elements in Islamic principles, namely zakat and purification. The concept of purification has been applied in the Shariah stock selection process in Indonesia, while at the same time, zakat has been widely socialised in stock investment. The study highlights two models that consider the concept of zakat reduction and the purification factors for portfolios in the Indonesian stock market. According to the robustness tests conducted, the proposed Shariah-compliant asset pricing model developed in this study is valid. Zakat reduction and purification factor integration in mathematical models can be applied in portfolio modelling.","PeriodicalId":31622,"journal":{"name":"Journal of Islamic Monetary Economics and Finance","volume":"93 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-12-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79948827","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}
Inequalities and social exclusion are the consequences of imbalanced economic growth, prompting the World Bank to establish new targets for eradicating extreme poverty and promoting shared prosperity. Surprisingly, the contemporary solution methods are consistent with Shari'ah's objectives. Stressing the importance of balanced growth, this study aims to quantify prosperity sharing in 28 developed and 14 developing nations by reshaping the notion of sustainable development from an Islamic perspective. The study examins four pillars of prosperity namely Faradh (social responsibility), Shura (social participation), Al Adl Wal Ihsan (social equilibrium) and Ummah (social cohesion) to capture the essence of prosperity sharing. It begins with a thorough literature review as the basis for designing and developing the dimensions and indicators, followed by an adequacy test of the indicators using Principal Component Analysis (PCA). Then, the study employs panel data regression analysis to identify the determinants that have a significant impact on the shared prosperity indicator (s). The results show that all of the pillars (Faradh, Shura, Al Adl Wal Ihsan, and Ummah) have a significant outcome, confirming that the strength of the association between the variables is strong and adequate as proxies for each pillar. Finally, an Islamicity Prosperity Index is developed, which is a multidimensional index (iPI) to measure prosperity sharing in developed and developing countries.
{"title":"PROMOTING AN INCLUSIVE ECONOMY: THE RELEVANCE OF SUSTAINABLE DEVELOPMENT AND ISLAMICITY PROSPERITY INDEX","authors":"N. Ismail, Mohamed Eskandar Shah Mohd Rasid","doi":"10.21098/jimf.v8i4.1530","DOIUrl":"https://doi.org/10.21098/jimf.v8i4.1530","url":null,"abstract":"Inequalities and social exclusion are the consequences of imbalanced economic growth, prompting the World Bank to establish new targets for eradicating extreme poverty and promoting shared prosperity. Surprisingly, the contemporary solution methods are consistent with Shari'ah's objectives. Stressing the importance of balanced growth, this study aims to quantify prosperity sharing in 28 developed and 14 developing nations by reshaping the notion of sustainable development from an Islamic perspective. The study examins four pillars of prosperity namely Faradh (social responsibility), Shura (social participation), Al Adl Wal Ihsan (social equilibrium) and Ummah (social cohesion) to capture the essence of prosperity sharing. It begins with a thorough literature review as the basis for designing and developing the dimensions and indicators, followed by an adequacy test of the indicators using Principal Component Analysis (PCA). Then, the study employs panel data regression analysis to identify the determinants that have a significant impact on the shared prosperity indicator (s). The results show that all of the pillars (Faradh, Shura, Al Adl Wal Ihsan, and Ummah) have a significant outcome, confirming that the strength of the association between the variables is strong and adequate as proxies for each pillar. Finally, an Islamicity Prosperity Index is developed, which is a multidimensional index (iPI) to measure prosperity sharing in developed and developing countries.","PeriodicalId":31622,"journal":{"name":"Journal of Islamic Monetary Economics and Finance","volume":"38 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-12-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88594055","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}
We investigate how corporate sustainability (Environmental, Social, and Governance-ESG) influences cash holdings of non-financial firms in Muslim countries from 2003 to 2021. Using panel models, we find that firms with lower ESG hold more cash over the entire period, which aligns with the agency and precautionary motives of cash holdings. We also note that the negative relation between ESG and cash holding is not affected by the COVID-19 pandemic. Looking at individual countries in the sample, we note a positive relation between ESG and cash balances for Saudi Arabia. Meanwhile, similar to the full sample, their relation is negative for firms from Malaysia and Turkiye. Finally, the ESG and cash policies of firms in different industries tend to vary. Overall, firms in Muslim countries use cash holdings as a substitute for corporate sustainability without any changes in the COVID era.
{"title":"HOW DO CORPORATE SUSTAINABILITY AND PANDEMIC AFFECT CASH HOLDINGS IN MUSLIM COUNTRIES?","authors":"Hasan Tekin, Huseyin Burgazoglu","doi":"10.21098/jimf.v8i4.1649","DOIUrl":"https://doi.org/10.21098/jimf.v8i4.1649","url":null,"abstract":"We investigate how corporate sustainability (Environmental, Social, and Governance-ESG) influences cash holdings of non-financial firms in Muslim countries from 2003 to 2021. Using panel models, we find that firms with lower ESG hold more cash over the entire period, which aligns with the agency and precautionary motives of cash holdings. We also note that the negative relation between ESG and cash holding is not affected by the COVID-19 pandemic. Looking at individual countries in the sample, we note a positive relation between ESG and cash balances for Saudi Arabia. Meanwhile, similar to the full sample, their relation is negative for firms from Malaysia and Turkiye. Finally, the ESG and cash policies of firms in different industries tend to vary. Overall, firms in Muslim countries use cash holdings as a substitute for corporate sustainability without any changes in the COVID era.","PeriodicalId":31622,"journal":{"name":"Journal of Islamic Monetary Economics and Finance","volume":"44 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-12-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80249904","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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