Andrew Ebekozien, Clinton Ohis Aigbavboa, Mohamad Shaharudin Samsurijan, Ahmad Kabir Muhammad and Opeoluwa Akinradewo
Several governments in developing countries have attempted via policies and programmes to improve access to low-cost housing (LCH) finance for low-income house owners, but…
Abstract
Purpose
Several governments in developing countries have attempted via policies and programmes to improve access to low-cost housing (LCH) finance for low-income house owners, but sustainability has been an issue. Therefore, sustainable LCH (SLCH) financing framework may mitigate issues hindering LCH financing sustainability in developing countries. There is a paucity of studies about SLCH financing through a framework in Nigeria. Thus, the study investigated the barriers facing low-income earners (LInEs) accessing SLCH finance and developed a framework for promoting Nigerian SLCH financing.
Design/methodology/approach
The research employed a soft system methodology (SSM) to understand Nigeria’s LCH financing sustainability. The adopted method permitted a substitute to enhance LCH financing sustainability part way through a developed framework. The study conducted interviews across seven cities in Nigeria with selected practitioners.
Findings
The results were presented using the SSM seven steps. Findings reveal the state and barriers facing LInEs in accessing SLCH finance. Also, findings show that there is a need for a finance framework. It would improve sustainability, especially for intending low-income house owners across Nigeria’s cities. Findings include a framework to reposition LCH financing sustainability to promote homeowners for intending low-income house owners across Nigeria’s cities.
Originality/value
Besides the developed LCH financing sustainable framework, housing policymakers and developers can employ SLCH financing to improve low-income intending house owners in Nigeria. This may be the first study to develop a SLCH financing framework using SSM in a developing economy.
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Imron Mawardi, Mohammad Haidar Risyad and Muhammad Ubaidillah Al Mustofa
This study aims to explore the impact of instability on bank performance by examining how economic uncertainty interacts with the profitability of both Islamic and conventional…
Abstract
Purpose
This study aims to explore the impact of instability on bank performance by examining how economic uncertainty interacts with the profitability of both Islamic and conventional banks (CBs) in Indonesia.
Design/methodology/approach
This study applies a quantitative methodology, applying dynamic linear analysis through autoregressive distributed lag estimation and leverages time-series data from Indonesia’s banks. Specifically, bank profitability is measured using income before taxes, whereas economic uncertainty is gauged by weighting macroeconomic factors through principal component analysis.
Findings
Economic uncertainty affects the profitability of both Islamic banks and CBs in Indonesia, with CBs being more negatively impacted than Islamic banks.
Research limitations/implications
Economic uncertainty has a notably different impact on banks’ profitability in Indonesia, highlighting the critical need for stabilization measures to reinforce the foundations of the financial institution management system and integration policy frameworks.
Practical implications
Strengthening the management of integration policies should be prioritized to enhance financial stability in larger banks during economic uncertainty. Policymakers should focus on the profitability of CBs during periods of economic uncertainty as it has a bigger impact than the Islamic banking industry.
Originality/value
This study underscores the importance of sustainable development strategies in enhancing banking performance during periods of uncertainty. At the same time, studies examining the relationship between economic uncertainty and bank profitability remain limited, particularly when comparing Islamic banks and CBs in Indonesia.
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Agus Widarjono, Md. Mahmudul Alam, Abdur Rafik, Akhsyim Afandi and Sahabudin Sidiq
This study aims to investigate the relationship between competition and bank risk-taking in Indonesian Islamic banking using linear and non-linear approaches.
Abstract
Purpose
This study aims to investigate the relationship between competition and bank risk-taking in Indonesian Islamic banking using linear and non-linear approaches.
Design/methodology/approach
The dynamic panel regression using a two-step system generalized method of moments (GMM) is used to investigate the impact of competition on Z-score and financing loss provision (FLP) as proxies of bank stability and financing risk, respectively. This study uses all Indonesian Islamic banks (IB) from 2015–2020 using quarterly data.
Findings
The competition positively affects the Z-score and negatively influences the FLP. Furthermore, higher concentration is positively linked to the Z-score but is negatively related to the FLP. This study also incorporates a quadratic term of the competition to examine the competition-stability nexus. The findings indicate that the squared competition is negative for the Z-score and positive for the FLP. In general, this study confirms the competition-stability view.
Research limitations/implications
Some policy implications can be drawn from this study. Indonesia needs more players, and they are large IB in the form of full-fledged IB. This research uses all IB in Indonesia, but these results reflect conditions in one country with its own business and political environments. Of course, the findings cannot be generalized for all IB worldwide using cross-country data.
Originality/value
To the best of the authors’ knowledge, this is the first study that examines the non-linear relationship between competition and stability using the adjusted Lerner index in IB.
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Oday Hatem Falih, Bahareh Abedin, Mahmood Yahyazadehfar, Mohammad Safari and Erne Suzila Kassim
This study aims to explore the key factors influencing customer loyalty in Islamic banking within the Iraqi market, as well as the consequences of loyalty. Despite the increasing…
Abstract
Purpose
This study aims to explore the key factors influencing customer loyalty in Islamic banking within the Iraqi market, as well as the consequences of loyalty. Despite the increasing global significance of Islamic finance, there is a notable lack of empirical research addressing how both causal and contextual factors shape customer loyalty in Iraq. This research seeks to fill this gap by examining the dynamics of customer loyalty and its perceived value to customers, thereby contributing to a deeper understanding of customer relationships in Islamic banking.
Design/methodology/approach
The research is conducted using a grounded theory approach, allowing for an exploration of the objective through in-depth qualitative analysis. In-depth interviews are conducted with various stakeholders, including customers, managers and bank employees. The inclusion of heterogeneous groups offers a richer and deeper understanding, increasing the validity and transferability of the findings.
Findings
A model of customer loyalty in Islamic banking in Iraq is developed, highlighting social, individual and banking characteristics as indicators of causal factors. Macroeconomic trends, government policy and media and advertising are identified as contextual factors, while competitor actions, life events and demographic profiles are recognized as intervening factors. The findings also suggest that loyalty brings positive values not only to the customers, such as positive experiences, lifetime value and better financial stability, but also to the banking institutions, including word-of-mouth referrals, competitive advantage and increased customer advocacy.
Research limitations/implications
This study contributes to the advanced development of a theoretical framework on customer loyalty. In addition, the findings offer valuable insights into the relationship between Sharia compliance and customer loyalty, calling for banking institutions to prioritize adherence to Sharia principles.
Originality/value
This study explores areas of research within the context of Iraqi Islamic banking, allowing for the discovery of new and original insights into causal, contextual and intervening conditions of customer loyalty, which signify the Iraqi social phenomena. While the scope focuses on customers, the grounded theory approach opens up to emergent patterns and relationships.
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Governments worldwide are placing a greater emphasis on enhancing ecology and the environment as a result of escalating ecological issues. One possible approach is sustainable…
Abstract
Governments worldwide are placing a greater emphasis on enhancing ecology and the environment as a result of escalating ecological issues. One possible approach is sustainable governance. This chapter explores the interrelated roles of internal control, environmental accounting, and environmental auditing mechanisms in promoting sustainable governance and green transformation. By looking at these three aspects, the chapter illustrates how integrated approaches can promote sustainable practices and guarantee adherence to environmental standards. The objective of this chapter is to present a thorough knowledge of the ways in which these components work together to support sustainability as a whole.
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Yunice Karina Tumewang, Indri Supriani, Herlina Rahmawati Dewi and Md. Kausar Alam
This study aims to identify the significant scientific actors, reveal the intellectual structure and explore essential features for future research direction in Sharia governance…
Abstract
Purpose
This study aims to identify the significant scientific actors, reveal the intellectual structure and explore essential features for future research direction in Sharia governance studies.
Design/methodology/approach
The study applies a hybrid review combining bibliometric analysis and content analysis. It uses Rstudio (biblioshiny), VOSviewer and Microsoft Excel to analyze 457 articles published in 206 journals indexed by Scopus and/or Web of Science during the period of 1985 until the end of 2022.
Findings
The paper discovered four distinct streams of Sharia governance studies: structure of Sharia governance, Sharia governance and risk management, Sharia governance and sustainability and the effect of Sharia governance toward firm’s financial performance. Furthermore, it derives and summarizes 26 main research questions for future studies.
Research limitations/implications
In terms of theoretical implications, the finding contributes to the general literature on Sharia governance by conducting bibliometric analysis and content analysis. In terms of practical implications, this study suggests that Sharia governance should be strengthened by the management of Islamic banks and other Islamic-based businesses.
Originality/value
To the best of the authors’ knowledge, this study is among the early studies using a hybrid review on the topic of Sharia governance, allowing future researchers in this field to capture the trends and progress of current literature as well as the research gaps to be filled in by future researchers.
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Md. Abu Issa Gazi, Md. Ibrahim, Abdullah Al Masud and Syed Muhammod Ali Reza
The current study aims to investigate how young smartphone users in Bangladesh relate their brand experiences to brand loyalty. In addition, we want to visualize the direct and…
Abstract
Purpose
The current study aims to investigate how young smartphone users in Bangladesh relate their brand experiences to brand loyalty. In addition, we want to visualize the direct and mediating effects of brand satisfaction, brand love and brand advocacy in our model.
Design/methodology/approach
The researchers examined the hypotheses by employing structural equation modeling (SEM) in AMOS and Decision Analyst STATS, version 2.0, with a sample size of 470 Bangladeshi smartphone users. The authors constructed the conceptual model by drawing upon both theoretical and empirical foundations. The researchers obtained data by utilizing an adopted and self-administered pre-structured questionnaire distributed via an online platform.
Findings
The results showed that brand experience greatly influences brand satisfaction, love, advocacy and loyalty, all of which have a significant impact on users’ brand loyalty across the country. The findings also suggested that the function of brand satisfaction as a critical mediator in the link between brand experience and brand loyalty was significant.
Originality/value
This experiment contributes to the body of knowledge by focusing on emotional brand attachments like brand satisfaction, love and advocacy and proposing that they can mediate experience and loyalty in the mobile market. The study also helps managers and executives better understand the primary drivers of smartphones, which are essential for generating and sustaining consumers’ happiness and loyalty in today’s highly competitive consumer market.
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Sean Kruger and Adriana A. Steyn
Several disciplines and thousands of studies have used, developed and supported technology adoption theories to guide industry and support innovation. However, within the past…
Abstract
Purpose
Several disciplines and thousands of studies have used, developed and supported technology adoption theories to guide industry and support innovation. However, within the past decade, a paradigm shift referred to as the fourth industrial revolution (4IR) has resulted in new considerations affecting how models are used to guide emerging technology integration into business strategy. The purpose of this study is to determine which technology adoption model, or models are primarily used when assessing smart technologies in the 4IR construct. It is not to investigate the rigour of existing models or their theoretical underpinnings, as this has been proven.
Design/methodology/approach
To achieve this, a systematic literature review based on the preferred reporting items for systematic reviews and meta-analysis methodology is used. From 3,007 publications, 125 papers between 2015 and 2021 were deemed relevant for thematic analysis.
Findings
From the literature, five perspectives were extracted. As with other information and communication technology studies, the analysis confirms that the technology acceptance model remains the predominantly used model. However, 105 of the 125 models extended their theoretical underpinnings, indicating a lack of maturity. Furthermore, the countries of study and authors’ expertise are predominantly clustered in the European and Asian regions, despite the study noting expansion into 16 different subject areas, far beyond the smaller manufacturing scope of Industry 4.0.
Originality/value
This study contributes theoretically by providing a baseline to develop a generalisable 4IR model grounded on existing acceptance trends identified. Practically, these insights demonstrate the current trends for strategists and policymakers to understand technology adoption within the 4IR to direct efforts that support innovation development, an increasingly crucial factor for survival in the digital age. Future research can investigate the additional constructs that were impactful while considering the level of research they were applied to.
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This study aims to investigate whether offering contractual rebates in deferred sales equals or differs from offering them in loans and critically evaluate the practice of…
Abstract
Purpose
This study aims to investigate whether offering contractual rebates in deferred sales equals or differs from offering them in loans and critically evaluate the practice of discretionary rebates in Islamic finance.
Design/methodology/approach
The study follows a qualitative approach. It obtains primary data through 15 qualitative interviews with Sharìah scholars and Islamic bankers. A general review is conducted to consult classical sources of Sharìah and other related scholarly materials to delve into the issue. The study utilises a thematic analysis technique to investigate qualitative data.
Findings
The study finds that a contractual increase in the price of deferred sales due to a moratorium is permissible, and it differs from an increment in loans, which is riba, i.e., usury. Likewise, a contractual rebate on deferred sales due to early settlement is lawful, not riba. Even a contractual loan reduction due to early repayment is permissible, not riba, based on the Prophet’s saying dà wa tàajjul, i.e., “reduce and expedite.” Offering contractual rebates does not contradict Sharìah. Rebates motivate clients to make regular and prompt repayments. The study verifies that a discretionary rebate does not provide this benefit; instead, clients feel insecure about whether and how much rebate they will obtain, depending on banks’ discretion. A discretionary rebate may cause disputes and gharar, i.e. ambiguity, in agreement. The study posits that a contractual rebate can be offered, and necessary clauses on a mandatory rebate and its calculation formula shall be incorporated into the main contract. Nonetheless, offering rebates has become a custom, resembling an agreement stipulation. The regulators could oblige to offer rebates, provided it secures public wellbeing and eliminates possible harm.
Practical implications
This study advocates a contractual rebate, which removes clients’ unhappiness and the possibility of dispute. By incorporating a binding rebate into the agreement, Islamic banks will remain competitive and flexible in pricing. A secure rebate genuinely encourages customers to settle their debt promptly. Moreover, the study would lead to a harmonisation of rebate offerings in Islamic finance across jurisdictions.
Originality/value
Previous studies theoretically addressed contractual rebates but made no difference between loan and credit sale rebates. This study is an unprecedented effort to examine empirically the validity and implications of contractual rebates. It highlighted the difference between the loan and deferred sale rebates. Additionally, the study will support Sharìah scholars, Islamic bankers and regulators in allowing and guiding contractual rebates accordingly.
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Xiao Ling Ding, Razali Haron and Aznan Hasan
This study aims to determine how Basel III capital requirements affect the stability of Islamic banks globally during the global financial crisis and the COVID-19 pandemic.
Abstract
Purpose
This study aims to determine how Basel III capital requirements affect the stability of Islamic banks globally during the global financial crisis and the COVID-19 pandemic.
Design/methodology/approach
The secondary data for all Islamic banks worldwide from 2004 to 2021 is obtained from the FitchConnect database. The main technique was a two-step generalized method of moment (GMM) system, and the data were tested using pooled ordinary least squares, fixed effects and difference GMM models for robustness checks.
Findings
Regression results support the moral hazard hypothesis based on evidence that both the total capital ratio and the Tier 1 capital ratio have a statistically significant positive impact on the stability of Islamic banks globally. Furthermore, neither the global financial crisis of 2008–2009 nor COVID-19 (2020–2021) significantly impacted the stability of Islamic banks worldwide. The results are robust across alternative measures of stability, capital buffers, dummy variables and estimation techniques. According to the descriptive statistics, the number of Islamic banks that disclose their regulatory capital ratios to the public has increased over the study period, and the mean of total capital and Tier 1 ratios are considerably greater than what is required by Basel II and Basel III.
Research limitations/implications
Bankers, regulators and policymakers should benefit from the evidence on capital and risk management in Islamic banking according to Basel Committee on Banking Supervision (BCBS) and Islamic financial services board (IFSB) international standards in various jurisdictions.
Originality/value
This research builds on earlier studies that were both beneficial and instructive by exploring the relationship between BCBS and IFSB capital guidelines and the trustworthiness of Islamic banks in greater depth. This study uses numerous capital ratios, buffers and stability measures to provide an international context for research on Islamic banking. In addition, the database is up-to-date to include information about the COVID-19 pandemic aftereffects in the year 2021. This study also introduces the Basel membership of Islamic banks to provide context for countries still at the Basel II stage or are yet to begin implementing the Basel III international standard.