Abdullah Ayedh, Abdelghani Echchabi, Mohamed Battour and Mohammed Omar
This study aims to examine the factors that could increase the investment in the Bitcoin market among Malaysian Muslim communities.
Abstract
Purpose
This study aims to examine the factors that could increase the investment in the Bitcoin market among Malaysian Muslim communities.
Design/methodology/approach
The study used a survey questionnaire to collect data for a sample of 200 Muslim respondents in Malaysia. Subsequently, the collected data was analysed using structural equation modelling, as well as basic descriptive statistics and one sample test.
Findings
The findings showed that compatibility, awareness and facilitating conditions have a significant impact on Malaysian Muslim communities’ investment in the Bitcoin market.
Originality/value
It is worth emphasizing that this is one of the earliest studies that examine the Muslim communities’ perception and willingness to invest in the Bitcoin market. Hence, it is expected to be one of the foundations for future studies in this area.
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Fekri Ali Shawtari, Muslim Har Sani Mohamad, Hafiz Majdi Abdul Rashid and Abdullah Moh’d Ayedh
The purpose of this paper is to investigate the relationship between board characteristics and real performance among state-owned enterprises (SOEs) in Malaysia in a longitudinal…
Abstract
Purpose
The purpose of this paper is to investigate the relationship between board characteristics and real performance among state-owned enterprises (SOEs) in Malaysia in a longitudinal period following the introduction of transformation policy.
Design/methodology/approach
The study deviates from prior research in utilising a real performance measure rather than traditional measures of performance. The authors adopt the quantile regression approach to examine the impact of board characteristics on real performance in a comparison using ordinary least squares.
Findings
The results of quantile regression reveal that the impact of board mechanisms on real performance was not as expected. Specifically, board size and duality had a bearing on real performance. Board independence also is considered as influential factor through the time. However, such effects were not homogenous across different quantiles. The dummy year variable to compare the period pre- and post-transformation policy reveals that the dummy year is not significant, indicating that performance post-transformation is indifferent compared to the pre-transformation policy period.
Practical implications
It is important for government to reconsider the policies embedded in the transformation policy. This study provides insights on the enhancement of board effectiveness and new developments regarding GLCs.
Originality/value
This is an early to attempt to measure real performance and its link to board characteristics in SOEs post-transformation policy.
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Abdullah Mohammed Ayedh, Wan A’tirah Mahyudin, Mohamad Subini Abdul Samat and Harith Hamidi Muhamad Isa
The purpose of this study is to explore the integration of Shariah compliance in the information system of Islamic financial institutions (IFIs) in the context of Malaysia.
Abstract
Purpose
The purpose of this study is to explore the integration of Shariah compliance in the information system of Islamic financial institutions (IFIs) in the context of Malaysia.
Design/methodology/approach
By applying qualitative approach in the form of in-depth/structured interview of qualified respondents within Islamic financial industries.
Findings
The result of this study indicates that information system advancement will give an increasing level of competitive advantages. Also, the result indicates that the internal control and information system played a vital role in ensuring the Shariah compliance and translating and circulating the Shariah guidelines among the IFIs’ departments and staffs. In terms of Shariah integration in information system, there is a consideration during the development of an information system. Shariah will be an element that needs to be accounted for to develop the information system for IFI.
Research limitations/implications
This includes the scope of the study which is based on Malaysian Islamic banks only. Hence, future studies are recommended to extend this endeavor to other contexts as well. Furthermore, although the initial sample was covering nine IFIs, only two IFIs accepted to participate in the interview. It is suggested that the future studies involve more participants and apply different research techniques such as focus groups or questionnaire survey.
Practical implications
Make sure employees who are in charge of performing any function related to Shariah (i.e. Shariah review, Shariah audit, Shariah research, Shariah risk management) have a basic knowledge on information technology (IT) and information system. Continuous trainings for IFIs’ employees covering the information system and internal control system issues related to the Shariah compliance. Focus on seminars and conferences on outstanding issues related to information system technology in IFIs. Promoting programs and subjects specialized in information system technology in IFIs. IFIs should allocate a budget for system development or enhancement in the financial budget ensuring that IT system is incorporated in Shariah compliance. IFIs should consider enhancement of Shariah compliance encompass and the alignment into the IT system as continuous process, as well as one of their strategic plan aspects. Bank Negara Malaysia as a regulatory body of IFIs should emphasize on regulating the Shariah aspects with regard to the IT system.
Originality/value
This paper’s contributions lies in the enhancement of the development of the Shariah compliance literature, as well in the integration of Shariah compliance and information system in IFIs.
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Abdullah Mohammed Ayedh and Abdelghani Echchabi
– The purpose of this study is mainly to comprehensively investigate the current practices of Islamic banks’ Shari’ah supervisory boards in the specific context of Yemen.
Abstract
Purpose
The purpose of this study is mainly to comprehensively investigate the current practices of Islamic banks’ Shari’ah supervisory boards in the specific context of Yemen.
Design/methodology/approach
The study uses a qualitative approach in the form of in-depth interviews of a number of Shari’ah scholars active within the Yemeni Islamic banks.
Findings
The findings support the notion that Islamic banking still lacks regulations and standards, as the Yemeni Islamic banks are still following the minimum requirements and only apply the compulsory standards. Another key finding is that Islamic banks in Yemen apply similar principles in Fatwa issuance and Shari’ah compliance assurance, especially in referring to the different Madzhabs’ and scholars’ opinions because of the sensitivity of Yemeni community with regards to the Shari’ah compliance aspect. Finally, the procedure of Shari’ah review of the Islamic banks’ operations varied from the typical set of procedures to the loose ones in terms of the number of staff in the Shari’ah audit department and the application of a comprehensive survey or sampling to review the banks’ transactions.
Originality/value
This study provides some valuable recommendations to further enhance the Shari’ah supervisory practices not only in Yemen but also in similar settings.
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Ramdani Ramdani, Tika Widiastuti and Imron Mawardi
The development of waqf is growing rapidly. To maintain progress of waqf per se sharia, Muslim scholars try to present Islamic values (IVs) in activities and operations of waqf…
Abstract
Purpose
The development of waqf is growing rapidly. To maintain progress of waqf per se sharia, Muslim scholars try to present Islamic values (IVs) in activities and operations of waqf institutions. To find out implementation of IVs in waqf institutions, previous research was carried out as a guide for future research; this study aims to systematically review the literature.
Design/methodology/approach
This study draws on the implementation of IV in waqf institutions. Through the Preferred Reporting Items for Systematic Review and Meta-analysis for Protocol approach, 327 articles were collected, which were then extracted to gain lessons from various case studies related to problems in waqf institutions.
Findings
This study illustrates tawheed, justice, accountability, trust, mutual consultation, Allah consciousness, enjoin virtue and avoiding evil and objectives of shariah in waqf governance.
Research limitations/implications
The materials used in the systematic literature review were retrieved from few databases. The use of more academic databases will be better and more diverse, in addition to the repertoire of knowledge related to management and strategies at waqf institutions.
Practical implications
The identified values provide a framework for practitioners, policymakers and researchers to guide their efforts in developing and governing waqf institutions in accordance with Islamic principles.
Originality/value
The findings provide deep insights into the current state of IV in waqf institution in literature. This paper highlights many gaps in the literature and suggests directions for future studies to advance the understanding of implementation of IV. This study will help researchers to identify the new dimensions of research and contribute to the literature.
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Hana Jaradat and Mohammad Salem Oudat
The purpose of this study is to explore the influence of the regulatory environment on the efficiency of transparency within Islamic finance practices. It specifically examines…
Abstract
Purpose
The purpose of this study is to explore the influence of the regulatory environment on the efficiency of transparency within Islamic finance practices. It specifically examines how the determination of Shariah compliance, corporate governance and auditing standards is shaped by regulatory frameworks and their effects on the level of transparent financial reporting.
Design/methodology/approach
The research path was defined, and the research hypotheses were evaluated in the model using partial least squares structural equation modeling. The study collected data through structured surveys from 203 respondents.
Findings
The results of the PLS analysis demonstrate that Shari’ah compliance practices enhance transparency by making it difficult to breach ethical or social norms. These practices also infuse the presence of good corporate practices and quality audits that promote a culture of financial accountability, which is key for market and stakeholder confidence. The regulatory environment adds a critical moderating influence in these relationships by providing the oversight and enforcement capability required to ensure uniformity in the application of Shari’ah adherence and set transparency standards across borders.
Originality/value
The findings of this study have practical implications for those who implement policies, develop regulatory structures and study Islamic finance, underscoring the importance of achieving robust governance and regulatory frameworks. However, the study admits weaknesses, such as limited geographical coverage, reliance on preexisting data and the use of a cross-sectional analysis. Future research directions should include longitudinal and cross-comparative designs, the effects of modern technologies and the integration of qualitative methods alongside quantitative ones.
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Naji Mansour Nomran and Razali Haron
This study aims to empirically examine whether there is any optimal Shari’ah supervisory board’s (SSB) size that maximizes performance of Islamic banks (IBs). Apparently, IBs…
Abstract
Purpose
This study aims to empirically examine whether there is any optimal Shari’ah supervisory board’s (SSB) size that maximizes performance of Islamic banks (IBs). Apparently, IBs adopt different SSB size based on their different regulations across jurisdictions, and then it is still questionable whether there is any optimal SSB size that can fit all and be recommended to IBs.
Design/methodology/approach
The paper investigates the impact of different SSB size on IBs performance using a sample of 113 banks over 23 countries for the period 2007-2015 based on the generalized method of moments estimator.
Findings
The empirical evidence documented in this study strongly highlights the importance of small SSB size in enhancing the performance of IBs as compared to the large board size. The findings confirm that the SSB size of IBs should neither be lesser than three nor greater than six. More specifically, it is found that the optimal SSB size seems to be five.
Research limitations/implications
First, the study does not investigate whether the findings are constant during crisis and non-crisis periods. Second, the optimal SSB size in IBs should be confirmed from the risk-taking perspective besides performance.
Practical implications
For both the IBs and the regulators, they should give due importance to small SSB size as an important element for improving the IBs performance. It is strongly recommended for the IBs to have a SSB size between three and six, and five is the most recommended. The Accounting and Auditing Organization for Islamic Financial Institutions also should revise their existing standards that only suggest the minimum SSB size of three to include the maximum size of six and the optimal size of five.
Originality/value
Despite the SSB size plays an important role in affecting the performance of IBs, it seems there are no empirical studies attempting to address whether there is any optimal SSB size that can enhance the IBs performance so far.
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Naji Mansour Nomran and Razali Haron
This paper aims to systematically review the existing studies on the relationship of Sharī'ah governance (SG), as represented by the Sharī'ah supervisory board (SSB), with firm…
Abstract
Purpose
This paper aims to systematically review the existing studies on the relationship of Sharī'ah governance (SG), as represented by the Sharī'ah supervisory board (SSB), with firm performance of Islamic banks (IBs), to suggest opportunities for future research in this field.
Design/methodology/approach
By adopting a systematic literature review, 21 empirical and theoretical papers published in Scopus concerning the relationship between SSB and performance of IBs were selected for review and analysis.
Findings
In light of the existing research studies' limitations, this paper suggests that the effect of SSB on IBs' performance still requires more empirical analyses using alternative analytical methods, alternative measures, and different periods (during crisis and non-crisis). Besides that, these studies should take into account the differences across jurisdictions in their SG models, the degree of agencies' intervention in SG practices, the control over cross-memberships of scholars, and the differences across IBs in the position of SSB in the organization structure.
Practical implications
The analysis undertaken in this paper would address the literature gaps on the effect of SSB on IBs' performance as this study serves as a guide for the researchers, academicians, and interested researchers from Islamic international autonomous non-for-profit organizations, e.g. AAOIFI and IFSB in research related to this important area. Importantly, the findings of this study would support regulators and related authorities across jurisdictions with suggestions on improving the current SG practices.
Originality/value
This paper presents a critical review of the existing research on SSB and IB performance and suggests new variables, measurements, analytical methods, and new issues for researchers in this area. Thus, it identifies the literature gap that still needs further empirical investigation and a suitable way to close it.
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Saeed Awadh Bin-Nashwan, Aishath Muneeza, Abdelhamid Elsayed A. Ismaiel, Ismail Mohamed, Anas Rasheed Bajary and Mohammed Mahdi Obaid
Muslim engagement with cryptocurrencies (CC) raises fundamental questions rooted in religious faith: How should Muslims integrate Islamic Accounting principles like zakat into…
Abstract
Purpose
Muslim engagement with cryptocurrencies (CC) raises fundamental questions rooted in religious faith: How should Muslims integrate Islamic Accounting principles like zakat into this new and rapidly evolving financial paradigm? Thus, it is essential to understand CC holders’ perceptions thoroughly and whether they are willing to pay zakat using crypto assets. This research aims to explore factors influencing Muslim CC holders’ intention to pay zakat on CC, emphasizing financial risk, theory of planned behavior (TPB) constructs and Shariah compliance’s moderating role.
Design/methodology/approach
This attempt uses a quantitative approach through a cross-sectional research design, using purposive sampling to gather data from Muslim CC holders. An extended theory of planned behavior (ETPB) model is applied to comprehensively analyze the key factors influencing intentions to pay zakat on CC. SmartPLS software is used to generate meaningful findings.
Findings
The study finds that financial risk associated with CC exerted a negative influence on TPB constructs, attitude (ATT), social norms (SN) and perceived behavioral control regarding zakat on CC (PBC). However, ATT and PBC positively shaped holders’ intention to pay zakat on CC. Interestingly, Shariah compliance-moderated interactions of TPB constructs on payment intentions were statistically significant.
Originality/value
With the rise of CC, a profound transformation is underway in the financial landscape. As this evolution unfolds, it becomes increasingly essential for stakeholders to understand how zakat could fit into such a new and rapidly evolving paradigm. A pioneering effort was made in this study by exploring Muslim CC holders’ intentions to fulfill zakat obligations, bridging a significant gap in the literature.
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Salwa Bin Idrees, Syed Musa Alhabshi, Ashurov Sharofiddin and Anwar Hasan Abdullah Othman
The purpose of this study is to frame the dimensions of the external institutional environment, namely, cultural-cognitive, normative and regulative dimensions as the main actors…
Abstract
Purpose
The purpose of this study is to frame the dimensions of the external institutional environment, namely, cultural-cognitive, normative and regulative dimensions as the main actors in the organisational field. More precisely, Libyan commercial banks have been identified as empirical evidence, to identify constraints of the institutional environment governing the behaviour and decision-making of commercial banks, when adopting Islamic financial transactions.
Design/methodology/approach
A questionnaire has been designed for 14 Libyan commercial banks which is distributed to the Board of Directors, managers, directors of departments, and personnel. The exploratory factor analysis (EFA) and the measurement model by using the first-order and second-order confirmatory factor analysis (CFA) have been applied as essential steps to embody the conceptual framework and test the research hypotheses.
Findings
The results of the EFA indicated sufficient correlation among the dimensions of the external environment. The CFA supported this study’s hypotheses. The modelling showed that the cultural-cognitive, normative and regulative dimensions are institutional constraints impeding Libyan commercial banks’ adoption of Islamic financial transactions. Interestingly, the findings of the CFA align with the EFA findings in supporting the conceptual framework of the research. They portrayed that the cultural-cognitive dimension has been identified by explicit and implicit cognition.
Originality/value
This study systematically embodies the dimensions of the external institutional environment, namely, cultural-cognitive, normative and regulative dimensions, as the main factors in the organisational field to be conceptually rich lenses to investigate social considerations to reinforce institutional thought broadly. The results of this study were consistent with extant Islamic financial literature, reflecting symmetry and similarity across commercial banks, particularly at the first stage of adopting Islamic financial transactions.