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Publication date: 6 July 2020

Abu Hanifah Ayob and Abrar Ali Saiyed

The paper is grounded in a comparatively unexplored but growing research interest, which seeks to explain the effect of a country’s religious composition on its economic activity…

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Abstract

Purpose

The paper is grounded in a comparatively unexplored but growing research interest, which seeks to explain the effect of a country’s religious composition on its economic activity. As an extension of that, this study aims to examine the relationship between Muslim populations and the prevalence of entrepreneurial activity across nations. Integrated with institutional theory, the authors also consider formal and informal institutional variables as contingency factors in this milieu. So, it further investigates if the strategic intervention of formal and informal institutions moderates the relationship between religion and entrepreneurship.

Design/methodology/approach

This study uses multi-source data sets from the association of religious data archive, global entrepreneurship monitor and the World Bank. The sample includes 88 countries for analysis, aggregated from 2012 to 2014. The ordinary least squares regression using statistical package for the social sciences (SPSS) Statistics Version 26 is used for the analysis.

Findings

The findings show that Muslim populations are negatively associated with the rate of new business activities in a country, including the formal type of entrepreneurship. However, further analysis reveals that Muslims entrepreneurship is actually driven by necessity and not by opportunity.

Practical implications

The regulatory environment and entrepreneurial culture are not enough to overcome resistance toward entrepreneurship among Muslims. One possible practical recommendation is to empower religious institutions to preach a clear message supporting participation in economic activities.

Social implications

This research sheds light on the discrepancy between Islamic religious teaching and eventual behavior of the followers.

Originality/value

This research contributes to both academics and practitioners in several ways. First, it responds to the recent call for more studies on the effect of religious beliefs toward secular organizations by providing empirical evidence on how the prevalence of Muslims in a particular country is associated with levels of entrepreneurship. Second, it adds to the theoretical understanding of the mechanism that explains the relationship between the two. As institutional theory has not been applied extensively in the study of religion and entrepreneurship, it proposes that dynamic institutions play major roles to accelerate or attenuate the effect of Islam on entrepreneurship.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 13 no. 4
Type: Research Article
ISSN: 1753-8394

Keywords

Open Access
Article
Publication date: 25 June 2024

Nourhen Sallemi and Ghazi Zouari

This study examines the impact of external corporate factors (external auditors, insured satisfaction and corporate social responsibility) on the performance (ROA, ROE, ROI) of…

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Abstract

Purpose

This study examines the impact of external corporate factors (external auditors, insured satisfaction and corporate social responsibility) on the performance (ROA, ROE, ROI) of takaful providers of distinguishable Muamalah contracts (wakalah and Hybrid).

Design/methodology/approach

The full sample includes 30 Takaful insurance companies listed in Southeast Asia (SEA) and Gulf Cooperation Council (GCC) countries over the period 2011–2021. We use the FGLS method for data analysis.

Findings

Our results reveal that Takaful insurance, which holds one of the Big Four with qualified Shariah members as external auditors, leads to improved performance (ROA, ROE and ROI). In addition, our findings show that Takaful insurance should be concerned with insured satisfaction to determine its success and generate higher performance for both the wakalah and hybrid contracts (ROA, ROE and ROI). Furthermore, Corporate Social Responsibility is considered a source of efficiency that enhances Takaful’s performance for the two types of wakalah and hybrid models (ROA, ROE and ROI).

Practical implications

Some suggestions may be useful for Takaful insurance regulatory authorities to intensify CSR activities, hold one of the Big Four as an external auditor and realize insured satisfaction.

Originality/value

This study highlights that it is beneficial for policymakers, insurers and investors to explore external factors that influence financial performance (return on assets, ROA; return on equity, ROE; return on investment,) in the Takaful insurance market, which uses wakalah and hybrid contracts.

Details

Asian Journal of Accounting Research, vol. 9 no. 3
Type: Research Article
ISSN: 2459-9700

Keywords

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