Pub Date : 2021-07-08DOI: 10.1108/ijif-08-2018-0088
Naji Mansour Nomran, Razali Haron
Purpose There is much debate in the literature about how the performance of Islamic banks (IBs) should be measured. Basically, IBs’ business models are different from that of conventional banks; thus, the performance of IBs should be measured by using a Sharīʿah-based approach. This paper considers zakat (Islamic tax) as an alternative indicator to measure the performance of IBs. This paper aims to examine whether zakat ratios can be used as Islamic performance (ISPER) indicators for IBs besides the conventional performance (COPER) indicators. Design/methodology/approach The investigation covered a sample of 214 yearly observations of 37 IBs located in Indonesia, Malaysia, Bahrain, Saudi Arabia and the United Arab Emirates for the period 2007–2015. This study used a single-factor congeneric model and confirmatory factor analysis, performed using the AMOS 23.0 software. Findings The findings assert that the discriminant validity of multi-bank performance, as measured by ISPER [zakat on assets (ZOA) and zakat on equity (ZOE)] and COPER indicators (return on assets, return on equity and operational efficiency in terms of assets), is very high. Hence, ISPER and COPER measurements are valid, either together to measure the multi-performance of IBs from both the Islamic and conventional perspectives, or independently as each measurement is valid to measure the Islamic and conventional performance if it is used separately. Research limitations/implications This paper does not investigate whether the findings are constant across time. This represents one of the limitations of this study. Practical implications It is strongly recommended that IBs calculate and disclose zakat ratios, particularly ZOA and ZOE, in their annual reports. Researchers and academicians should use these ratios for measuring the ISPER of IBs, either along with COPER or separately. Originality/value Empirical evidence is provided in this paper on the development and validity of zakat ratios as ISPER indicators in the Islamic banking industry. Zakat ratios are suitable indicators that can measure IBs’ performance and achieve the goals of IBs as well as those of Islamic economics. Technically, zakat has a dynamic ability to reflect the profitability of IBs. The more the IBs generate profit, the more they pay zakat. Furthermore, the greater the total assets of IBs, the higher the amount of zakat that they should pay. Thus, zakat ratios can be used as profitability measurements as in the case of tax ratios.
关于如何衡量伊斯兰银行(ib)的绩效，文献中存在很多争论。基本上，IBs的商业模式与传统银行不同;因此，ibb的表现应该通过使用基于shari - tah的方法来衡量。本文将zakat(伊斯兰税)作为衡量ib绩效的替代指标。本文旨在研究天课比率是否可以作为ib的伊斯兰绩效(ISPER)指标，而不是传统绩效(COPER)指标。该调查涵盖了2007-2015年期间对印度尼西亚、马来西亚、巴林、沙特阿拉伯和阿拉伯联合酋长国37家ib的214次年度观察样本。本研究采用单因素同属模型和验证性因子分析，采用AMOS 23.0软件进行。研究结果表明，通过ISPER [zakat on assets (ZOA)和zakat on equity (ZOE)]和COPER指标(资产回报率、股本回报率和资产方面的运营效率)来衡量，多家银行绩效的判别效度非常高。因此，ISPER和COPER测量是有效的，它们可以一起从伊斯兰和传统的角度测量ib的多重性能，或者单独使用，因为如果单独使用，每个测量都可以有效地测量伊斯兰和传统的性能。研究的局限性/意义本文没有调查这些发现是否在不同的时间里是不变的。这是本研究的局限性之一。实际意义强烈建议ib在其年度报告中计算和披露天课比率，特别是ZOA和ZOE。研究人员和学者应该使用这些比率来衡量ib的ISPER，可以与COPER一起使用，也可以单独使用。原创性/价值本文提供了实证证据，证明了天课比率作为伊斯兰银行业ISPER指标的发展和有效性。Zakat比率是衡量ib绩效和实现ib目标以及伊斯兰经济学目标的合适指标。从技术上讲，zakat具有反映商学院盈利能力的动态能力。ib产生的利润越多，他们支付的天课就越多。此外，ib的总资产越大，他们应该支付的天课金额就越高。因此，天课比率可以用作衡量盈利能力的指标，就像在税收比率的情况下一样。
{"title":"Validity of zakat ratios as Islamic performance indicators in Islamic banking: a congeneric model and confirmatory factor analysis","authors":"Naji Mansour Nomran, Razali Haron","doi":"10.1108/ijif-08-2018-0088","DOIUrl":"https://doi.org/10.1108/ijif-08-2018-0088","url":null,"abstract":"Purpose\u0000There is much debate in the literature about how the performance of Islamic banks (IBs) should be measured. Basically, IBs’ business models are different from that of conventional banks; thus, the performance of IBs should be measured by using a Sharīʿah-based approach. This paper considers zakat (Islamic tax) as an alternative indicator to measure the performance of IBs. This paper aims to examine whether zakat ratios can be used as Islamic performance (ISPER) indicators for IBs besides the conventional performance (COPER) indicators.\u0000\u0000\u0000Design/methodology/approach\u0000The investigation covered a sample of 214 yearly observations of 37 IBs located in Indonesia, Malaysia, Bahrain, Saudi Arabia and the United Arab Emirates for the period 2007–2015. This study used a single-factor congeneric model and confirmatory factor analysis, performed using the AMOS 23.0 software.\u0000\u0000\u0000Findings\u0000The findings assert that the discriminant validity of multi-bank performance, as measured by ISPER [zakat on assets (ZOA) and zakat on equity (ZOE)] and COPER indicators (return on assets, return on equity and operational efficiency in terms of assets), is very high. Hence, ISPER and COPER measurements are valid, either together to measure the multi-performance of IBs from both the Islamic and conventional perspectives, or independently as each measurement is valid to measure the Islamic and conventional performance if it is used separately.\u0000\u0000\u0000Research limitations/implications\u0000This paper does not investigate whether the findings are constant across time. This represents one of the limitations of this study.\u0000\u0000\u0000Practical implications\u0000It is strongly recommended that IBs calculate and disclose zakat ratios, particularly ZOA and ZOE, in their annual reports. Researchers and academicians should use these ratios for measuring the ISPER of IBs, either along with COPER or separately.\u0000\u0000\u0000Originality/value\u0000Empirical evidence is provided in this paper on the development and validity of zakat ratios as ISPER indicators in the Islamic banking industry. Zakat ratios are suitable indicators that can measure IBs’ performance and achieve the goals of IBs as well as those of Islamic economics. Technically, zakat has a dynamic ability to reflect the profitability of IBs. The more the IBs generate profit, the more they pay zakat. Furthermore, the greater the total assets of IBs, the higher the amount of zakat that they should pay. Thus, zakat ratios can be used as profitability measurements as in the case of tax ratios.","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2021-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48992731","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}
Pub Date : 2021-07-06DOI: 10.1108/IJIF-06-2020-0126
Wan Nuraihan Ab Shatar, J. Hanaysha, Putri Rozita Tahir
Purpose This paper aims to test the main factors that affect cash waqf collection among the employees of Islamic banking institutions (IBIs) in Malaysia. Design/methodology/approach The data was gathered using a survey method from 218 employees of IBIs in Malaysia. The obtained data was analyzed using the Statistical Package for the Social Sciences software and smart partial least squares-structural equation modeling to verify the hypothesis and reach conclusions. Findings The results revealed that word of mouth and trust have significant positive impacts on cash waqf collection. The outcomes also confirmed that convenience and accessibility to cash waqf play significant roles in affecting cash waqf collection. Originality/value Based on the researchers’ knowledge, there are only a few studies which focused on measuring the driver of cash waqf collection from the employees’ perspective, particularly in the Malaysian context. This study specifically applies the theory of reasoned action to determine employees’ attitudes toward cash waqf fund collections in IBIs in Malaysia. Having an understanding of the factors that influence employees to contribute to cash waqf would better equip IBIs in managing their cash waqf contributions and in designing their marketing and branding strategies for promoting their institutions.
本文旨在检验影响马来西亚伊斯兰银行机构(IBIs)员工现金收集的主要因素。设计/方法/方法采用调查方法从马来西亚ibi的218名员工中收集数据。利用Statistical Package for The Social Sciences软件和智能偏最小二乘-结构方程模型对所得数据进行分析，验证假设并得出结论。结果表明，口碑和信任对现金募集有显著的正向影响。结果还证实，现金收集的便利性和可及性在影响现金收集方面发挥了重要作用。原创性/价值根据研究人员的知识，只有少数研究侧重于从员工的角度衡量现金收集的驱动因素，特别是在马来西亚的背景下。本研究具体运用理性行为理论来确定马来西亚ibi员工对现金waqf基金收集的态度。了解影响员工向现金流捐款的因素，可使ibi更好地管理其现金流捐款，并设计其营销和品牌战略，以推广其机构。
{"title":"Determinants of cash waqf fund collection in Malaysian Islamic banking institutions: empirical insights from employees’ perspectives","authors":"Wan Nuraihan Ab Shatar, J. Hanaysha, Putri Rozita Tahir","doi":"10.1108/IJIF-06-2020-0126","DOIUrl":"https://doi.org/10.1108/IJIF-06-2020-0126","url":null,"abstract":"\u0000Purpose\u0000This paper aims to test the main factors that affect cash waqf collection among the employees of Islamic banking institutions (IBIs) in Malaysia.\u0000\u0000\u0000Design/methodology/approach\u0000The data was gathered using a survey method from 218 employees of IBIs in Malaysia. The obtained data was analyzed using the Statistical Package for the Social Sciences software and smart partial least squares-structural equation modeling to verify the hypothesis and reach conclusions.\u0000\u0000\u0000Findings\u0000The results revealed that word of mouth and trust have significant positive impacts on cash waqf collection. The outcomes also confirmed that convenience and accessibility to cash waqf play significant roles in affecting cash waqf collection.\u0000\u0000\u0000Originality/value\u0000Based on the researchers’ knowledge, there are only a few studies which focused on measuring the driver of cash waqf collection from the employees’ perspective, particularly in the Malaysian context. This study specifically applies the theory of reasoned action to determine employees’ attitudes toward cash waqf fund collections in IBIs in Malaysia. Having an understanding of the factors that influence employees to contribute to cash waqf would better equip IBIs in managing their cash waqf contributions and in designing their marketing and branding strategies for promoting their institutions.\u0000","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2021-07-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43990080","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}
Pub Date : 2021-06-21DOI: 10.1108/ijif-07-2020-0156
Yusuf Dinc, M. Çetin, M. Bulut, Rashed Jahangir
Purpose This study aims to develop a valid and reliable Islamic financial literacy (IFL) scale that can capture all the segments of the Islamic financial sectors and which could be considered applicable for all jurisdictions across the globe. Design/methodology/approach To build the measure, this study followed a scale development process by collecting 698 a priori items from 81 respondents. Later, it generated an item pool through the analysis of the items with experts and gave the last form (40 items) to 287 respondents in Turkey with another IFL scale that is frequently used in the literature and a scale assessing religiosity. With explanatory factor analysis, the scale demonstrates a four-factor construct with 20 items. This construct provides good fit indexes and reliability scores. Findings Results of the correlation analysis and comparison of the fit indexes of alternative structures provided supportive evidence for discriminant and convergent validity of the scale and its sub-dimensions. As a result, an applicable scale is developed for countries where Islamic financial institutions are operating and where they are not. Originality/value One of the strengths of this study is that it represents a comprehensive scale development for the entire Islamic financial system, including banking, takaful (Islamic insurance) and fund management. In addition, the attempt to design an IFL scale applicable to any economy or individual is a pioneering attempt in the literature.
{"title":"Islamic financial literacy scale: an amendment in the sphere of contemporary financial literacy","authors":"Yusuf Dinc, M. Çetin, M. Bulut, Rashed Jahangir","doi":"10.1108/ijif-07-2020-0156","DOIUrl":"https://doi.org/10.1108/ijif-07-2020-0156","url":null,"abstract":"\u0000Purpose\u0000This study aims to develop a valid and reliable Islamic financial literacy (IFL) scale that can capture all the segments of the Islamic financial sectors and which could be considered applicable for all jurisdictions across the globe.\u0000\u0000\u0000Design/methodology/approach\u0000To build the measure, this study followed a scale development process by collecting 698 a priori items from 81 respondents. Later, it generated an item pool through the analysis of the items with experts and gave the last form (40 items) to 287 respondents in Turkey with another IFL scale that is frequently used in the literature and a scale assessing religiosity. With explanatory factor analysis, the scale demonstrates a four-factor construct with 20 items. This construct provides good fit indexes and reliability scores.\u0000\u0000\u0000Findings\u0000Results of the correlation analysis and comparison of the fit indexes of alternative structures provided supportive evidence for discriminant and convergent validity of the scale and its sub-dimensions. As a result, an applicable scale is developed for countries where Islamic financial institutions are operating and where they are not.\u0000\u0000\u0000Originality/value\u0000One of the strengths of this study is that it represents a comprehensive scale development for the entire Islamic financial system, including banking, takaful (Islamic insurance) and fund management. In addition, the attempt to design an IFL scale applicable to any economy or individual is a pioneering attempt in the literature.\u0000","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2021-06-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47656246","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}
Purpose This paper aims to develop the best practices of Islamic estate planning for Muslims. Islamic estate planning is a fixed proposal for the management and outlook of an individual’s assets throughout their life and upon their passing, created by means of existing Islamic estate planning tools, for instance, farāʾiḍ (inheritance), waṣiyyah (will), hibah (gift) and waqf (endowment). Design/methodology/approach The paper used an interview method to obtain information on the best practices of Islamic estate planning. Semi-structured interviews were conducted with the respondents and estate planning providers in the northern region of Peninsular Malaysia. The data gathered was analysed using thematic analysis which involved five phases to construct the best practices of Islamic estate planning. Findings The paper identifies important elements in Islamic estate planning. The elements were outlined as the crucial things that Muslims should do to plan for intergenerational transfer and earning a good share in the hereafter. Research limitations/implications The first limitation of the paper is that the best practices were developed based on a qualitative method. There is no evidence of its validity, which is a gap that can be explored in the future. Second, it involves the perceptions of two types of respondents (individuals and Islamic estate planning providers), which may be broadened to other related stakeholders such as regulators, in future studies. Originality/value This paper presents a framework of best practices of Islamic estate planning, it being one of the first studies to do so, which is not only useful and relevant for Malaysian Muslims but also for Muslims in other countries.
{"title":"Developing best practices of Islamic estate planning: a construction based on the perspectives of individuals and estate planning providers","authors":"Norazlina Abd. Wahab, Selamah Maamor, Zairy Zainol, Suraiya Hashim, Kamarul Azman Mustapha Kamal","doi":"10.1108/ijif-03-2020-0052","DOIUrl":"https://doi.org/10.1108/ijif-03-2020-0052","url":null,"abstract":"\u0000Purpose\u0000This paper aims to develop the best practices of Islamic estate planning for Muslims. Islamic estate planning is a fixed proposal for the management and outlook of an individual’s assets throughout their life and upon their passing, created by means of existing Islamic estate planning tools, for instance, farāʾiḍ (inheritance), waṣiyyah (will), hibah (gift) and waqf (endowment).\u0000\u0000\u0000Design/methodology/approach\u0000The paper used an interview method to obtain information on the best practices of Islamic estate planning. Semi-structured interviews were conducted with the respondents and estate planning providers in the northern region of Peninsular Malaysia. The data gathered was analysed using thematic analysis which involved five phases to construct the best practices of Islamic estate planning.\u0000\u0000\u0000Findings\u0000The paper identifies important elements in Islamic estate planning. The elements were outlined as the crucial things that Muslims should do to plan for intergenerational transfer and earning a good share in the hereafter.\u0000\u0000\u0000Research limitations/implications\u0000The first limitation of the paper is that the best practices were developed based on a qualitative method. There is no evidence of its validity, which is a gap that can be explored in the future. Second, it involves the perceptions of two types of respondents (individuals and Islamic estate planning providers), which may be broadened to other related stakeholders such as regulators, in future studies.\u0000\u0000\u0000Originality/value\u0000This paper presents a framework of best practices of Islamic estate planning, it being one of the first studies to do so, which is not only useful and relevant for Malaysian Muslims but also for Muslims in other countries.\u0000","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2021-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49438476","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}
Pub Date : 2021-06-08DOI: 10.1108/ijif-06-2021-196
B. S. Sairally
{"title":"Editorial","authors":"B. S. Sairally","doi":"10.1108/ijif-06-2021-196","DOIUrl":"https://doi.org/10.1108/ijif-06-2021-196","url":null,"abstract":"","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2021-06-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44834591","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}
Pub Date : 2021-06-07DOI: 10.1108/IJIF-12-2019-0187
Azniza Hartini Azrai Azaimi Ambrose, F. A. Asuhaimi
Purpose The purpose of this paper is to comprehensively discuss the issue of risk vis-à-vis the perpetuity restriction principle inherent in waqf (Islamic endowment). Specifically, it attempts to consolidate the axioms in both conventional and Islamic finance, such as the risk-return trade-off and al-ghunm bi al-ghurm (liability accompanies gain), with the perpetual nature of waqf. Overall, this paper attempts to find a resolution to the dilemma of perpetuity restriction inherent in cash waqf against the natural occurrence of the risk. Design/methodology/approach This paper is based on the secondary research methodology; past literature encompassing journal articles, books, relevant financial axioms, fatwas (Islamic rulings) and state enactments is critically reviewed to present its case. In regard to state enactments, only Malaysian state enactments have been used, thus restricting the study to the Malaysian case only. Findings This study contends that the dilemma of the perpetuity restriction and the natural occurrence of risk can be resolved through the integration of waqf risk management, especially concerning cash waqf, with the Islamic spiritual approach. By implementing standard operating procedures that inculcate awareness on waqf risk management and Islamic spirituality in waqf stakeholders (waqif (donor), trustee and beneficiaries), the stakeholders may accept the reality of risk that is inevitable even after all efforts have been exhausted. In other words, the violation of perpetuity is exonerated given that mental faculties aligned with revealed texts have been exhaustively used beforehand. Practical implications Findings from this study may broaden the choice of investment avenues for waqf trustees while adhering to the perpetual restriction of waqf. More importantly, waqf trustees will not be forced to invest in interest-bearing securities or be involved in any usurious transactions just to obtain guaranteed returns and preserve the corpus of waqf. Originality/value This study offers a unique perspective on cash waqf risk management by re-analyzing the axioms and concepts of finance and waqf while observing the welfare of the beneficiaries.
{"title":"Cash Waqf risk management and perpetuity restriction conundrum","authors":"Azniza Hartini Azrai Azaimi Ambrose, F. A. Asuhaimi","doi":"10.1108/IJIF-12-2019-0187","DOIUrl":"https://doi.org/10.1108/IJIF-12-2019-0187","url":null,"abstract":"\u0000Purpose\u0000The purpose of this paper is to comprehensively discuss the issue of risk vis-à-vis the perpetuity restriction principle inherent in waqf (Islamic endowment). Specifically, it attempts to consolidate the axioms in both conventional and Islamic finance, such as the risk-return trade-off and al-ghunm bi al-ghurm (liability accompanies gain), with the perpetual nature of waqf. Overall, this paper attempts to find a resolution to the dilemma of perpetuity restriction inherent in cash waqf against the natural occurrence of the risk.\u0000\u0000\u0000Design/methodology/approach\u0000This paper is based on the secondary research methodology; past literature encompassing journal articles, books, relevant financial axioms, fatwas (Islamic rulings) and state enactments is critically reviewed to present its case. In regard to state enactments, only Malaysian state enactments have been used, thus restricting the study to the Malaysian case only.\u0000\u0000\u0000Findings\u0000This study contends that the dilemma of the perpetuity restriction and the natural occurrence of risk can be resolved through the integration of waqf risk management, especially concerning cash waqf, with the Islamic spiritual approach. By implementing standard operating procedures that inculcate awareness on waqf risk management and Islamic spirituality in waqf stakeholders (waqif (donor), trustee and beneficiaries), the stakeholders may accept the reality of risk that is inevitable even after all efforts have been exhausted. In other words, the violation of perpetuity is exonerated given that mental faculties aligned with revealed texts have been exhaustively used beforehand.\u0000\u0000\u0000Practical implications\u0000Findings from this study may broaden the choice of investment avenues for waqf trustees while adhering to the perpetual restriction of waqf. More importantly, waqf trustees will not be forced to invest in interest-bearing securities or be involved in any usurious transactions just to obtain guaranteed returns and preserve the corpus of waqf.\u0000\u0000\u0000Originality/value\u0000This study offers a unique perspective on cash waqf risk management by re-analyzing the axioms and concepts of finance and waqf while observing the welfare of the beneficiaries.\u0000","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2021-06-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49275793","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}
Pub Date : 2021-02-15DOI: 10.1108/IJIF-10-2018-0116
Abdulsalam Ahmed Sawmar, M. Mohammed
Purpose This paper aims to construct a conceptual framework which explains the relationship between governance of zakat institutions and zakat payment compliance by using the organisational legitimacy theory. Design/methodology/approach This paper adopts content analysis and a review of multidisciplinary literature that primarily relate to zakat institutions, public governance and compliance behaviour. Findings The paper has developed a model, adapted from Abioye et al. (2013), concerning the influence of governance mechanisms on zakat payers’ compliance using trust as a moderator. The model comprises four governance mechanisms which influence zakat payment compliance. The four mechanisms include the board and leadership attributes, transparency and disclosure practices, stakeholder management practices and procedural justice. Trust has a moderating effect on the relationship between governance and zakat compliance. Research limitations/implications This model is applicable to regulated zakat systems, where the state has established zakat institutions and regulations for the collection and distribution of zakat, such as Saudi Arabia, Pakistan, Sudan and Malaysia. Originality/value This paper proposes a model, based on Abioye et al. (2013), to explain the influence of governance on zakat payment compliance. The novelty of the study is the addition of one new critical variable, procedural justice, to the Abioye et al.’s (2013) framework. Secondly, the model is proposed for regulated zakat jurisdictions.
{"title":"Enhancing zakat compliance through good governance: a conceptual framework","authors":"Abdulsalam Ahmed Sawmar, M. Mohammed","doi":"10.1108/IJIF-10-2018-0116","DOIUrl":"https://doi.org/10.1108/IJIF-10-2018-0116","url":null,"abstract":"\u0000Purpose\u0000This paper aims to construct a conceptual framework which explains the relationship between governance of zakat institutions and zakat payment compliance by using the organisational legitimacy theory.\u0000\u0000\u0000Design/methodology/approach\u0000This paper adopts content analysis and a review of multidisciplinary literature that primarily relate to zakat institutions, public governance and compliance behaviour.\u0000\u0000\u0000Findings\u0000The paper has developed a model, adapted from Abioye et al. (2013), concerning the influence of governance mechanisms on zakat payers’ compliance using trust as a moderator. The model comprises four governance mechanisms which influence zakat payment compliance. The four mechanisms include the board and leadership attributes, transparency and disclosure practices, stakeholder management practices and procedural justice. Trust has a moderating effect on the relationship between governance and zakat compliance.\u0000\u0000\u0000Research limitations/implications\u0000This model is applicable to regulated zakat systems, where the state has established zakat institutions and regulations for the collection and distribution of zakat, such as Saudi Arabia, Pakistan, Sudan and Malaysia.\u0000\u0000\u0000Originality/value\u0000This paper proposes a model, based on Abioye et al. (2013), to explain the influence of governance on zakat payment compliance. The novelty of the study is the addition of one new critical variable, procedural justice, to the Abioye et al.’s (2013) framework. Secondly, the model is proposed for regulated zakat jurisdictions.\u0000","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":"1 1","pages":""},"PeriodicalIF":2.3,"publicationDate":"2021-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41323611","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}
Pub Date : 2021-01-06DOI: 10.1108/IJIF-04-2019-0066
Yan Tan, Roslina Mohamad Shafi
Purpose The purpose of this paper is to explore the effects of the capital market on economic growth by considering the role of ṣukūk (Islamic investment certificates) and other capital market sub-components in Malaysia between 1998 and 2018. Design/methodology/approach The empirical investigation is based on the autoregressive distributed lag (ARDL) cointegration bounds test. Findings The results reveal the prevalence of a long-run equilibrium relationship between capital market variables and economic growth. As expected, bond market components (ṣukūk and conventional bonds) have a positive, albeit insignificant influence on economic growth. In contrast, in the long-term, stock market development – regardless of the indicator used on economic growth – is shown to have a significant and positive effect. The study suggests that stock market sub-components affect Malaysia’s economic growth the most. Research limitations/implications The primary limitation of this study is that only corporate ṣukūk were considered, while government ṣukūk were excluded from the estimation due to a lack of requisite information, resources and data. Practical implications A strategic framework should be established, especially in pricing efficiencies. Furthermore, there is a need to create more awareness on the benefits of ṣukūk investment among conventional bond investors, including retail investors. Thus, there will be more players in the ṣukūk market, and this will help to improve market liquidity. Originality/value Apart from conventional capital market sub-components, this study takes into account ṣukūk as a sub-component in the capital market on economic growth using the ARDL framework. Also, this study particularly concentrates on the world’s largest ṣukūk issuer, Malaysia, rather than focusing on other ṣukūk-issuing countries.
{"title":"Capital market and economic growth in Malaysia: the role of ṣukūk and other sub-components","authors":"Yan Tan, Roslina Mohamad Shafi","doi":"10.1108/IJIF-04-2019-0066","DOIUrl":"https://doi.org/10.1108/IJIF-04-2019-0066","url":null,"abstract":"\u0000Purpose\u0000The purpose of this paper is to explore the effects of the capital market on economic growth by considering the role of ṣukūk (Islamic investment certificates) and other capital market sub-components in Malaysia between 1998 and 2018.\u0000\u0000\u0000Design/methodology/approach\u0000The empirical investigation is based on the autoregressive distributed lag (ARDL) cointegration bounds test.\u0000\u0000\u0000Findings\u0000The results reveal the prevalence of a long-run equilibrium relationship between capital market variables and economic growth. As expected, bond market components (ṣukūk and conventional bonds) have a positive, albeit insignificant influence on economic growth. In contrast, in the long-term, stock market development – regardless of the indicator used on economic growth – is shown to have a significant and positive effect. The study suggests that stock market sub-components affect Malaysia’s economic growth the most.\u0000\u0000\u0000Research limitations/implications\u0000The primary limitation of this study is that only corporate ṣukūk were considered, while government ṣukūk were excluded from the estimation due to a lack of requisite information, resources and data.\u0000\u0000\u0000Practical implications\u0000A strategic framework should be established, especially in pricing efficiencies. Furthermore, there is a need to create more awareness on the benefits of ṣukūk investment among conventional bond investors, including retail investors. Thus, there will be more players in the ṣukūk market, and this will help to improve market liquidity.\u0000\u0000\u0000Originality/value\u0000Apart from conventional capital market sub-components, this study takes into account ṣukūk as a sub-component in the capital market on economic growth using the ARDL framework. Also, this study particularly concentrates on the world’s largest ṣukūk issuer, Malaysia, rather than focusing on other ṣukūk-issuing countries.\u0000","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2021-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42607410","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}
Pub Date : 2021-01-04DOI: 10.1108/IJIF-06-2020-0120
S. Kunhibava, Zakariya Mustapha, Aishath Muneeza, A. Sa’ad, M. Karim
Purpose This paper aims to explore issues arising from ṣukūk (Islamic bonds) on blockchain, including Sharīʾah (Islamic law) and legal matters. Design/methodology/approach A qualitative methodology is used in conducting this research where relevant literature on ṣukūk was reviewed. Through a doctrinal approach, the paper presents analyses on the practice of ṣukūk and ṣukūk on blockchain by discussing its legal, Sharīʾah and regulatory issues. This culminates in a conceptual analysis of blockchain ṣukūk and its peculiar challenges. Findings This paper reveals that digitizing ṣukūk issuance through blockchain remedies certain inefficiencies associated with ṣukūk transactions. Indeed, structuring ṣukūk on a blockchain platform can increase transparency of underlying ṣukūk assets and cash flows in addition to reducing costs and the number of intermediaries in ṣukūk transactions. The paper likewise brings to light legal, regulatory, Sharīʾah and cyber risks associated with ṣukūk on blockchain that confront investors, practitioners and regulators. This calls for deeper collaboration in research among Sharīʾah scholars, lawyers, regulators and information technology experts. Research limitations/implications As a pioneering subject, the paper notes the prospects of blockchain ṣukūk and the current dearth of literature on it. The paper would assist relevant Islamic capital market entities and authorities to determine the potential and impact of blockchain ṣukūk in their respective businesses and the financial system. Practical implications Blockchain ṣukūk will assist in addressing issues inherent in classical ṣukūk and in paving the way to innovative solutions that will facilitate and enhance the quality of ṣukūk transactions. For that, ṣukūk would require appropriate regulatory technology to address its governance and regulation peculiarities. Originality/value Integrating ṣukūk with blockchain technology will add value to it. The paper advances the idea that blockchain ṣukūk revolutionises ṣukūk and enhances its practice against known inadequacies.
{"title":"Ṣukūk on blockchain: a legal, regulatory and Sharī’ah review","authors":"S. Kunhibava, Zakariya Mustapha, Aishath Muneeza, A. Sa’ad, M. Karim","doi":"10.1108/IJIF-06-2020-0120","DOIUrl":"https://doi.org/10.1108/IJIF-06-2020-0120","url":null,"abstract":"\u0000Purpose\u0000This paper aims to explore issues arising from ṣukūk (Islamic bonds) on blockchain, including Sharīʾah (Islamic law) and legal matters.\u0000\u0000\u0000Design/methodology/approach\u0000A qualitative methodology is used in conducting this research where relevant literature on ṣukūk was reviewed. Through a doctrinal approach, the paper presents analyses on the practice of ṣukūk and ṣukūk on blockchain by discussing its legal, Sharīʾah and regulatory issues. This culminates in a conceptual analysis of blockchain ṣukūk and its peculiar challenges.\u0000\u0000\u0000Findings\u0000This paper reveals that digitizing ṣukūk issuance through blockchain remedies certain inefficiencies associated with ṣukūk transactions. Indeed, structuring ṣukūk on a blockchain platform can increase transparency of underlying ṣukūk assets and cash flows in addition to reducing costs and the number of intermediaries in ṣukūk transactions. The paper likewise brings to light legal, regulatory, Sharīʾah and cyber risks associated with ṣukūk on blockchain that confront investors, practitioners and regulators. This calls for deeper collaboration in research among Sharīʾah scholars, lawyers, regulators and information technology experts.\u0000\u0000\u0000Research limitations/implications\u0000As a pioneering subject, the paper notes the prospects of blockchain ṣukūk and the current dearth of literature on it. The paper would assist relevant Islamic capital market entities and authorities to determine the potential and impact of blockchain ṣukūk in their respective businesses and the financial system.\u0000\u0000\u0000Practical implications\u0000Blockchain ṣukūk will assist in addressing issues inherent in classical ṣukūk and in paving the way to innovative solutions that will facilitate and enhance the quality of ṣukūk transactions. For that, ṣukūk would require appropriate regulatory technology to address its governance and regulation peculiarities.\u0000\u0000\u0000Originality/value\u0000Integrating ṣukūk with blockchain technology will add value to it. The paper advances the idea that blockchain ṣukūk revolutionises ṣukūk and enhances its practice against known inadequacies.\u0000","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2021-01-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44413165","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}
Pub Date : 2021-01-01DOI: 10.1108/ijif-07-2020-0139
Muhammad Wajid Raza
Purpose There are a number of differences in the current Sharīʿah screening guidelines formulated by Sharīʿah scholars associated with world-renowned index providers and financial institutions. The purpose of this study is to highlight the consequences of such differences on the portfolio level outcomes for Sharīʿah-compliant investors. This study also investigates the cost of adopting an alternative stock selection methodology. Design/methodology/approach Seven Sharīʿah-compliant equity portfolios (SCEPs) are created from the active constituents of the S&P 500. Size, sector allocation and financial performance of the resulting seven portfolios are evaluated for the period 1984–2019. Style analysis is performed to attribute the difference in financial performance caused by the choice of selection criteria to different risk factors. The cost of switching the selection criteria is evaluated with turnover analysis and break-even transaction cost. Findings The choice of stock selection criteria has a significant effect on the size, sector bets and financial performance of the portfolios. Those portfolios which are constructed with market capitalization-based screens outperform portfolios constructed with total assets-based screens. The turnover analysis revealed that SCEPs are relatively costly in practice. Originality/value This study investigates the performance of Sharīʿah-compliant portfolios in the context of seven different screening guidelines. The effects of transaction cost and performance attribution to different risk factors represent the key contributions of this study.
{"title":"Does the choice of stock selection criteria affect the performance of Sharīʿah-compliant equity portfolios?","authors":"Muhammad Wajid Raza","doi":"10.1108/ijif-07-2020-0139","DOIUrl":"https://doi.org/10.1108/ijif-07-2020-0139","url":null,"abstract":"Purpose There are a number of differences in the current Sharīʿah screening guidelines formulated by Sharīʿah scholars associated with world-renowned index providers and financial institutions. The purpose of this study is to highlight the consequences of such differences on the portfolio level outcomes for Sharīʿah-compliant investors. This study also investigates the cost of adopting an alternative stock selection methodology. Design/methodology/approach Seven Sharīʿah-compliant equity portfolios (SCEPs) are created from the active constituents of the S&P 500. Size, sector allocation and financial performance of the resulting seven portfolios are evaluated for the period 1984–2019. Style analysis is performed to attribute the difference in financial performance caused by the choice of selection criteria to different risk factors. The cost of switching the selection criteria is evaluated with turnover analysis and break-even transaction cost. Findings The choice of stock selection criteria has a significant effect on the size, sector bets and financial performance of the portfolios. Those portfolios which are constructed with market capitalization-based screens outperform portfolios constructed with total assets-based screens. The turnover analysis revealed that SCEPs are relatively costly in practice. Originality/value This study investigates the performance of Sharīʿah-compliant portfolios in the context of seven different screening guidelines. The effects of transaction cost and performance attribution to different risk factors represent the key contributions of this study.","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":"1 1","pages":""},"PeriodicalIF":2.3,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"62692856","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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