Search results

This study aims to investigate the market timing strategy in different market conditions (i.e. up, down, normal and in-financial-crisis situation) in the emerging market of Pakistan over the period 1995 to 2015. Furthermore, this study tests the validity of the capital asset pricing model (CAPM) and Fama and French model.

This study considers monthly stock returns of 167 firms and constructs six different portfolios on the basis of different size and book to market ratio. The Treynor and Mazuy model is used to capture the market timing strategy.

The results indicate evidence of the market timing in normal market conditions. However, there is less supportive evidence of market timing in up-market, down-market and in-financial-crisis situations. This study also confirms the validity of the capital asset pricing model and Fama and French three-factor model with strong support of value premium and size premium in the stock market.

The findings of this study are helpful to companies in estimating the cost of issuing equity more accurately. The investors can use market timing to make their investment in a more better and profitable manner.

Unlike other previous studies, this study considers an extended period to test the validity of the capital asset pricing model and Fama and French model. In addition, this study is novel in testing the marketing timing of the firms in the context of emerging economy of Pakistan.

Several studies link Islamic finance to economic growth. There are at least two major limitations in these investigations. First, the proxy used to measure Islamic finance may not represent the whole impact of Islamic finance on economic growth because it only considers a subset of variables like Islamic banks’ deposits or sukuk issuance, etc. Second, it is difficult to extrapolate findings to other markets because most studies were conducted in just one nation or a small group of countries. Overcoming these issues is the driving force behind this research. In doing so, the study aims to use the overall Islamic Financial Development Index as a proxy for Islamic finance. The index measures the quantitative growth, knowledge, corporate social responsibility, governance and awareness of the Islamic financial sector.

Using a panel data set of 67 countries starting from 2012 to 2020, this study investigates the relationship between Islamic finance and economic growth.

The authors find that Islamic finance contributes to economic growth. This connection is more robust in Muslim and developing nations than it is in non-Muslim and developed nations.

To promote a country’s economic growth, the authors propose that regulators should focus on development of Islamic finance. To increase the reach of Islamic products, the government should take initiatives to raise public awareness of Islamic finance.

The findings imply that Islamic finance may have a more significant impact on socio-economic development in countries with a higher concentration of Muslim population and those in the developing stage. It highlights the potential role of Islamic finance in addressing socio-economic challenges and promoting inclusive growth in these regions.

This is the first study to use a more comprehensive sample of countries, covering both Muslim and non-Muslim nations, as well as both developing and developed nations. In addition, this study, unlike its predecessors, used a more robust and comprehensive index of Islamic finance developed by Thomson Reuters.

The main purpose of this study is to enunciate the underlying factors that enhance the performance of scaled momentum strategies.

In previous studies, the negative relationship between the lagged volatility and future return of momentum strategy is exploited to manage the risk. But this negative relationship only holds when volatility is higher, further the volatility is shown to be persistent. The implication of these two characteristics is important and this paper highlights that.

The higher performance of the scaled momentum strategies for the US market is linked with the length of the investment horizon. The traditional asset pricing models fail to explain this relationship. However, the authors find that the excess variance loaded on the long side of these strategies is one important explanation of this horizon bound performance of these strategies.

This study highlights that the volatility scaled momentum strategy has higher gains as the investment horizon increases. Therefore, it is an advisable investment strategy for the pension fund industry.

Momentum strategy is unique as it fulfils two criteria of performance enhancement through volatility scaling, such as, the persistent in volatility and its negative relationship with the returns. However, the impact on the performance of the negative relationship between volatility and return that only exist in highest volatility related states is not discussed. The authors have shown that this aspect of volatility and return relationship of the momentum strategy has an important bearing on the performance of the volatility scaled momentum strategies.

Highlights of the Paper

1. This study finds that the Sharpe ratios and the alphas of the volatility scaled strategies increase as the investment horizon increases.

2. This is because the volatility series are highly persistent and the negative predictive relationship between the volatility and future momentum returns only exist when the volatility is higher. The impact of these two characteristics of the volatility series on the performance of the scaled momentum strategies is not discussed in the literature.

3. We find that the scaled strategies invest more/less when the volatility of the momentum strategy is lower/higher. By investing less when volatility is higher, the scaled strategies avoid momentum crashes and lessens the contribution of the variance from the short side in the overall variance of these strategies.

4. It is further shown that the higher performance of the volatility scaled strategies, at each investment related horizon can be explained by the higher variance loaded on the long side of such strategies in comparison to the traditional momentum strategy.

This study finds that the Sharpe ratios and the alphas of the volatility scaled strategies increase as the investment horizon increases.

This is because the volatility series are highly persistent and the negative predictive relationship between the volatility and future momentum returns only exist when the volatility is higher. The impact of these two characteristics of the volatility series on the performance of the scaled momentum strategies is not discussed in the literature.

We find that the scaled strategies invest more/less when the volatility of the momentum strategy is lower/higher. By investing less when volatility is higher, the scaled strategies avoid momentum crashes and lessens the contribution of the variance from the short side in the overall variance of these strategies.

It is further shown that the higher performance of the volatility scaled strategies, at each investment related horizon can be explained by the higher variance loaded on the long side of such strategies in comparison to the traditional momentum strategy.

Poverty is a plague which has continental manifestation, but its impact is heavily felt in several Muslim majority nations (MMNs), where unemployment, illiteracy, chronic diseases, food shortage, sectarian wars and wave of militancy are surging at alarming rates. The purpose of this paper is to develop a faith-based model (FBM) to complement the conventional poverty reduction models. Experiences have shown that FBMs find more acceptability among Muslim nations because they have theoretical and theological underpinnings from the Qur’an and Hadith, as opposed to conventional models that are often viewed with suspicion, sequel to Islamic revivalism.

This research adopts a qualitative research method relying on secondary data/information sourced from CIA Factbook, previous scholarly works, working papers, case studies and relevant internet resources. In line with methodological approach of qualitative research, the secondary data/information were subjected to content and thematic analyses (CTA) from which facts, figures and presumptions were derived to support the FBM.

The paper justified the plausibility of integrating corporate social responsibility (CSR), Waqf system (WS) and Zakat system (TZS) as FBM for poverty reduction, enterprise development and economic empowerment in MMNs.

The gap left behind by the paper is for future researchers to carry out an empirical investigation on the viability or otherwise of the FBM. This could include the governance structure, operational modalities and regulatory frameworks that would enhance the functioning of the FBM.

FBM framework is practically a corporate social investment (CSI), which would be heavily funded by Zakat payers, CSR donations and Waqf. The funds would be deployed to poverty reduction in a number of ways ranging from training, micro-credit support for SMEs, apprenticeships, setting up technology business incubation centres, cluster development, infrastructural development in industrial parks, as well as providing welfare support services to the poor, marginalised communities and other economically disadvantaged groups.

The theoretical research is a contribution to theory and practice of CSR in the field of management and Islamic economics. It has developed a FBM for adoption by MMNs who are hesitant in adopting western model for fear of compromising their ethical values.

The unique institution of waqf that was ignored during the colonization of the Muslim areas has to be revived to play its role in shared growth, social inclusion and cohesion in society. This research paper aims to explore the role of waqf as an instrument for a sustainable growth system and to suggest a model for socioeconomic development in an economy like that of Pakistan.

This qualitative research is based on analytical methods to arrive at the frameworks and a model that could facilitate the revival of waqf for community development/social inclusion in economies like that of Pakistan.

As most of the OIC member states like Pakistan are facing serious financial problems due to debt servicing obligations, promoting Waqf for various socioeconomic and cultural functions is a vital requirement for such economies. The inability of the state institutions in providing necessary civic, health and education facilities to the public is causing serious harm to the balance of the society. It requires promoting a formal system of charity and using FinTech for waqf-based donations and financing the micro businesses. The perpetuity complimented by the profitability of the waqf properties makes the waqf institutions sustainable and effective when compared to individual charities.

This is conceptual research discussing the potential of waqf in light of its historical role. Researchers may undertake empirical studies on awqaf operations in various jurisdictions and their role in the empowerment of the poor.

The research will provide the researchers with insight into the potential of waqf as a tool for community development. Besides, it will enable policymakers and implementation authorities to socialize charity for sustained benefits and welfare.

To the best of the authors’ knowledge, it is the first major research that discusses the role of waqf in economies facing budgetary and trade deficits in the eradication of poverty and the promotion of social and economic entrepreneurship in realizing the community development targets for the economies like that of Pakistan.

This paper aims to analyze the role of waqf in the socio-economic development of the organization of the Islamic Cooperation (OIC) countries. Various projects currently use waqf as an instrument for socio-economic development, as reported in the scholarly literature. This study will investigate this literature to explore trends in waqf studies and the role of this Islamic form of endowment in the socio-economic development of OIC countries.

This systematic literature review focuses on peer-reviewed journals and data obtained from the Mendeley database using specific criteria to analyze the socio-economic developmental role of waqf in OIC countries from 2011‐2020.

The socio-economic developmental role of waqf in OIC countries has been widely studied. In total, 68 academic articles were found that are relevant to themes of poverty alleviation, social welfare, entrepreneurship, education, health services and religious facilities. They reveal that the role of waqf in social welfare was the most discussed topic in the research. In addition, the majority of studies used an interview method to study waqf institutions in nine OIC countries. Furthermore, the number of publications on the theme has increased significantly every year, although the largest proportion occurred in unindexed journals.

This study provides an overview of research trends in the socio-economic developmental role of waqf. Its results can provide practical input for waqf institutions as they encourage its practice in OIC countries, and for policymakers in formulating their management strategies to promote the role of waqf in the social and economic aspects of society.

This paper reviews the current development of the socio-economic role of waqf in OIC countries. It will help researchers improve their understanding of this role. It will also provide waqf managers in OIC countries with adequate information on waqf projects which they can implement to achieve socio-economic development in their countries.

This study aims to propose Islamic solutions to the Covid-19 health and economic crises, specifically using Islamic social finance (ISF) instruments, including zakat, infaq and waqf.

This study applies the qualitative content analysis method, guided by a model of composite approaches of poverty alleviation in Islam, integrated Islamic commercial and social finance (IICSF) and crisis management of Umar bin Khattab, to construct various programs and/or policy actions toward economic recovery in Indonesia.

The results show that ISF with its instruments, especially zakat, infaq and waqf could help the government and the economy to recover from the crisis. The proposed solutions include: save lives, including medical assistance using zakat-infaq and health-care waqf using waqf; save households, by creating a social safety net and graduation program using zakat-infaq; save businesses, especially micro-small enterprises (MSEs), through financial and business assistance (especially digital marketing) leveraging zakat-infaq-waqf and save financial institutions, especially micro-small financial institutions, by the development of cash waqf and the adoption of fintech and IICSF, especially in Islamic financial institutions targeting MSEs.

This study is exploratory in nature, which needs further investigations using more sophisticated qualitative and/or quantitative methods.

If the above programs using ISF instruments are implemented, the economic surplus would be re-established and the acceleration of economic recovery can be realized.

The successful adoption of ISF could at the same time reduce poverty, accelerate MSEs development and improve equitable well-being.

The Covid-19 pandemic has caused health, economic and social problems, which must be solved holistically, including ISF within IICSF.

This study aims to examine whether corporate social responsibility (CSR) of Islamic banking is delivering financial returns or otherwise enhancing the cost.

The methodology of this study includes the content-analysis approach with aid of the CSR disclosure index, and it deploys the partial least squares regression to examine the CSR-financial performance relationship. Regarding CSR disclosure and financial measures, this study takes the data from the annual reports of Islamic banking of Pakistan, from the year 2003 to 2017.

The results of this study indicate that there is a significant positive relationship exists between CSR and financial performance of Islamic banks, consistent with the instrumental-stakeholder theory. These results imply that Islamic banks, which ensure that CSR is practiced extensively, and aim to positively affect their stakeholders, perform well. Hence, the CSR engagement by Islamic banks yields instrumental returns rather it is a cost.

Islamic banks of Pakistan must work on a better CSR policy, it would enhance the reputation of Islamic banks, on the other hand, it would also increase their capabilities to cope with future reputation damage and negative news, thus it would protect and secure the financial results. In addition to these, investors of Islamic banks must also look at the social and ethical engagements of Islamic banks of Pakistan, while making investment decisions.

In general, there is a dearth of research in the domain of CSR-financial performance regarding Islamic banking. This is one of the studies which contributes to this area.

Foreign and local banks in Malaysia are competing in terms of skilled staff, innovative products and services, rendering quality services and customer satisfaction. The purpose of this paper is to examine the overall service quality and customer satisfaction of both foreign and local banks.

The data used to test the hypothesis were collected from 748 foreign and local bank customers in Malaysia. The research model was analysed using a structural equation modelling technique.

Results show that knowledge and staff competencies, as well as convenience of the bank is more significant for local bank customers while bank image and internet banking are important components for foreign bank customers. The results also reveal that foreign bank customers have higher satisfaction as compared to local bank customers.

No analysis is undertaken of any difference in the service quality dimensions between banks of different size. Further research on banking services could usefully test services quality dimensions across banks of different sizes.

The findings serve as a valuable reference for local banks understand service quality challenges they may face from foreign banks in this competitive industry. Findings suggest that, to provide high-quality services, financial institutions need to heighten customer satisfaction differentiation strategies.

The outcomes of this study enhance the knowledge on the performance of both local and foreign banks in Malaysia as well as customer satisfaction, which are invaluable to all bank managers and industry players in improving their services.