Ahmad Abbas, Neks Triani, Wa Ode Rayyani and Muchriana Muchran
This paper aims to describe earnings growth and marketability generated by Islamic banks in Indonesia and to find the effects of a moderated mediation model on the nexus between…
Abstract
Purpose
This paper aims to describe earnings growth and marketability generated by Islamic banks in Indonesia and to find the effects of a moderated mediation model on the nexus between Islamic financial inclusion and literacy, marketability and earnings growth.
Design/methodology/approach
The sample of this research was Islamic commercial banks in Indonesia listed on the Financial Services Authority and Bank Indonesia using time-series data of financial statements from 2014 to 2021. This research was designed using the model of moderated mediation.
Findings
Earnings growth experienced by Islamic banks in Indonesia has a positive average value followed by a positive marketability. Based on the significance test, the level of earnings growth is positively affected by marketability. The result indicates that the higher the marketability, the higher the earnings growth of Islamic banks. In a moderated mediation model, the result has found a positive effect on the nexus between inclusion supported by the role of literacy, marketability and earnings growth. It indicates that Islamic financial inclusion moderated purely by the role of literacy enhances Islamic banking marketability so that earnings growth continuously increases.
Practical implications
The increase of literacy is an empirically proven way to strengthen market power, so the finding obtained in this research can be feedback from the scheme made by the Indonesian government in supporting the Islamic business and for the corporate area being eager to grow greater and faster in competing and equalizing its power in the banking industry. In addition, this research implies that other countries continuously promote and increase the role of Islamic financial literacy and inclusion to enhance market power and increase the growth in Islamic banking.
Originality/value
This research extends the limited scholarly work on the role of Islamic financial literacy and inclusion using a different design from prior studies. The framework of market power theory has been elaborated to find the effect of Islamic financial inclusion supported by the role of literacy on earnings growth through marketability. This research is a trailblazer in testing the nexus model between variables allowing the path analysis using the moderated mediation model.
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Ahmad Abbas and Andi Ayu Frihatni
This paper aims to demonstrate gender diversity in the structure of corporate governance and test the effect of diversity on the firm performance suffering from financial distress.
Abstract
Purpose
This paper aims to demonstrate gender diversity in the structure of corporate governance and test the effect of diversity on the firm performance suffering from financial distress.
Design/methodology/approach
The paper is quantitative using a sample of 467 public firms in Indonesia. Data were analyzed into statistics descriptive and the hypothesis was tested using the test of logistic regression.
Findings
The preliminary results of the paper demonstrate the number of firms employing women and men in the structure of corporate governance of 13% on the commissioner board, 7% on the director board and 5% on the audit committee. Based on the test of effect, this paper further found that firms employing women and men (gender diversity) in the structure of the board of commissioners, tend to suffer from financial distress lower than firms only employing men (non-gender diversity).
Research limitations/implications
This paper is not an effort to make the proportion of voices of women equal to men, however the representation of women at least exists in the structure of corporate governance as part of workforce diversity and inclusivity. In addition, this paper is considered not to use panel data with the purpose of avoiding repetitive data because of the use of a nominal scale in the logistic regression model.
Practical implications
The finding of the paper is addressed to deliver insights into the current conversation on the issue of women's day with the theme of Each for Equal and to firms in positioning women in the structure of boardrooms.
Originality/value
This paper extends the limited scholarly work on the nexus between gender diversity and financial performance. The framework of social identity theory and the tenet of corporate governance are elaborated to disclose the finding that firm shareholders tend to benefit from gender diversity in the structure of the commissioner board.
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The purpose of this paper is to analyze marketability constructed from market share and concentration and to test its effect on the profitability and the mediation effects of…
Abstract
Purpose
The purpose of this paper is to analyze marketability constructed from market share and concentration and to test its effect on the profitability and the mediation effects of profit‒loss sharing under stewardship theory.
Design/methodology/approach
This research employs data of financial statements published by ten sharia commercial banks listed in the Indonesia Financial Services Authority during the period 2011–2016. The data are analyzed into path analysis model using multiple mediators.
Findings
The result reveals that sharia banks’ marketability in Indonesia tends to be low. Based on the test of significance through Partial Least Square, it is found that marketability has a positive effect on the level of profitability, indicating that market share and concentration of sharia banks positively lead the change on the level of Return on Asset and Return on Equity. This paper further identifies the mediation effects emerged through mudharabah and musharakah. The results point out that mudharabah has a partial effect and musharakah has a competitive effect on the relationship between market share and profitability.
Practical implications
This paper can be a decision-maker for Central Bank and Financial Services Authority for encouraging sharia banks to enhance the power market through the mode of finances with profit‒loss sharing.
Originality/value
The growth of sharia banks is currently becoming highlight of the literature of sharia banks. This paper provides insights into stewardship theory that sharia banking management provides the concept of the alignment of interest.
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Abbas Ahmad Adamu, Norazilawati Muhamad Sarih and Seng Neon Gan
Poly(ethylene terephthalate) (PET) waste from soft drink bottles was incorporated into palm olein alkyd to produce new polyol for use in polyurethane resins as surface protection…
Abstract
Purpose
Poly(ethylene terephthalate) (PET) waste from soft drink bottles was incorporated into palm olein alkyd to produce new polyol for use in polyurethane resins as surface protection on metal surfaces.
Design/methodology/approach
Alkyd was prepared from palm olein, glycerol and phthalic anhydride. PET underwent simultaneous glycolysis and transesterification reactions with the alkyd. Varying the amount of PET has led to polyols with different viscosities. Polyurethane resins were produced by reacting the polyols with toluene diisocyanate. The resins were coated on mild steel panels and cured. Performances of the cured films were tested.
Findings
The polyurethanes (PU) resin cured to a harder film with better thermal stability. Films showed excellent adhesion properties, while higher content of PET exhibited higher pencil hardness, better water, salt, acid and alkali resistance.
Research limitations/implications
Other vegetable oils could also be used. The alkyd structure could be changed by formulation to have different functionality and the ability to incorporate higher amount of PET waste. Rate of glycolysis of PET could be increased by higher amount of ethylene glycol.
Practical implications
This method has managed to use waste PET in producing new polyol and PU resins. The cured films exhibit good mechanical and chemical properties, as well as excellent adhesion and thermal stability.
Social implications
The non-biodegradable PET has created environmental pollution problems connected to littering and illegal landfilling. It has become necessary to pay greater attention to recycling PET bottles for obtaining valuable products.
Originality/value
This approach is different from the earlier reports, where PET was recycled to recover the raw materials.
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Yasir Abdullah Abbas, Nurwati A. Ahmad-Zaluki and Waqas Mehmood
This paper examines the relationship between the extent and quality of the four dimensions of corporate social responsibility disclosure (CSRD) namely community, environment…
Abstract
Purpose
This paper examines the relationship between the extent and quality of the four dimensions of corporate social responsibility disclosure (CSRD) namely community, environment, workplace and marketplace with the long-run share price performance of Malaysian initial public offering (IPO) companies.
Design/methodology/approach
This study utilised secondary data by the content analysis of the annual reports and Datastream of 115 IPOs listed from 2007 to 2015 in Malaysia. The IPO’s performance was determined by calculating the return measures under the equally weighted and value-weighted schemes of the mean abnormal returns and buy-and-hold abnormal returns covering the three years post-listing using the event-time approach.
Findings
The findings demonstrate that Malaysian IPOs experience substantial overperformance and underperformance when both the IPO performance measures are benchmarked against the matched companies and market. The results indicated that the extent and quality of the community and environment CSRD dimensions are positively and significantly correlated to the IPO’s performance. On the other hand, the extent and quality of the workplace and marketplace CSRD dimensions are negatively and significantly correlated to the IPO performance.
Practical implications
Malaysian regulators could benefit from these findings in their endeavour to carry out a reform process on CSRD to improve its quality. The results of this study are important to investors, regulators, non-government organisations, communities and policymakers. They also enhance the understanding of companies about the importance of disclosing greater CSR information to improve their performance and profitability.
Originality/value
To the researchers' best knowledge, this study provides new insights into the association between CSRD and the performance of Malaysian IPO companies, which is considered important.
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Abdullah Awadh Abdullah Bukair
This paper aims to investigate the influence of company-specific attributes on capital structure decisions of Islamic banks (IBs) in Gulf Cooperation council (GCC) countries…
Abstract
Purpose
This paper aims to investigate the influence of company-specific attributes on capital structure decisions of Islamic banks (IBs) in Gulf Cooperation council (GCC) countries during the period 2009-2011.
Design/methodology/approach
To improve the econometric estimates’ efficiency, the paper uses the generalized least square (GLS) regression model to increase the levels of freedom and reduce collinearity.
Findings
The empirical results indicate that bank size, liquidity and corporate age are positively associated with the leverage ratio of GCC IBs, supporting the trade-off theory. Inconsistent with theoretical predictions, it is found that the profitability, tangibility and growth have positive insignificant relationship with the level of leverage, suggesting these determinants are not important in capital structure decisions. Furthermore, gross domestic product (GDP) and non-debt tax shield have negative effects on the leverage ratio and significant for GDP.
Research limitations/implications
Overall, the evidence provided in the study highlights the significance of company-specific characteristics in determining and affecting the capital structure decisions of IBs in GCC countries. It is useful to use these variables in the analysis of IBs’ capital structure in the GCC region before the financial crisis in 2007. One limitation for this study is that the sample is restricted to only the Islamic banking sector. Future research could include all Islamic financial institutions (IFIs) operating within the Gulf region. Second, the study only concentrates on GCC countries to the neglect of other countries. Finally, the study controls for the country level only and does not account for firm factors. Future research could consider all these limitations. Another possible avenue is by examining other variables, such as corporate governance mechanisms.
Originality/value
Despite that most previous studies investigated the determinants of the capital structure of financial conventional industries, research on Islamic banking is almost non-existent. Moreover, the extant literature on Islamic finance has been theoretically explored, and the empirical research regarding capital structure is still in the infancy stage. Accordingly, it is evident that based on the Islamic trade-off perspective, theoretical hypotheses and empirical findings provide a novel addition to the capital structure theory for IFIs.
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This study aims to examine the impact of intellectual capital on the underwriting risk of insurance companies in Pakistan.
Abstract
Purpose
This study aims to examine the impact of intellectual capital on the underwriting risk of insurance companies in Pakistan.
Design/methodology/approach
The study used a quantitative research approach and a longitudinal research design, gathering data from 23 insurance companies listed on the Pakistan stock exchange from 2010 to 2022. The value-added intellectual coefficient (VAIC) was used to measure intellectual capital (IC), and unbalanced panel data were analyzed using static and dynamic regression analyses.
Findings
The findings demonstrate a significant association between intellectual capital and underwriting risk in insurance companies in Pakistan. Specific components of intellectual capital, such as human capital efficiency (HCE), structural capital efficiency (SCE) and capital employed efficiency (CEE), have a strong negative impact on underwriting risk. Control variables like return on assets, insurer size and leverage also showed significant relationships with underwriting risk.
Originality/value
This research provides new insights into the theoretical understanding of the insurance industry by establishing a direct link between intellectual capital and underwriting risk in the context of Pakistan. It suggests that by improving aspects of intellectual capital, specifically HCE, SCE and CEE, policymakers and managers can reduce underwriting risk.
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Farhana Mohamad Suhaimi, Asmak Ab Rahman and Sabitha Marican
This study aimed to analyse the role of the Waqf Fund Scheme, by taking Penang (or Pulau Pinang) as one of the states in Malaysia as a sample of the study. Waqf Fund Scheme was…
Abstract
Purpose
This study aimed to analyse the role of the Waqf Fund Scheme, by taking Penang (or Pulau Pinang) as one of the states in Malaysia as a sample of the study. Waqf Fund Scheme was established by the Islamic Religious Council of Penang, Majlis Agama Islam Negeri Pulau Pinang (MAINPP), in an effort to develop the economy of the Muslim community in the state.
Design/methodology/approach
This study analysed the contribution that this endowment fund makes towards a comprehensive scheme of economic development, namely, in terms of the economic, spiritual and social welfare of the Muslim community in Penang. The primary source of data was obtained through interviews conducted by the researcher with the Manager of the Waqf Fund Scheme, the Head of Administration and Finance Section and the Account Executive of MAINPP. The researcher also interviewed respondents from four institutions that were beneficiaries of the Waqf Fund Scheme.
Findings
The findings of this research show that the endowment fund scheme plays an important role in the economic development of the Muslim community in Penang. The Waqf Fund Scheme contributes by way of providing a financing facility towards the acquisition of waqf assets or through cash support channelled to associations or committees of a masjid.
Research limitations/implications
This study only focuses on Waqf Fund Scheme which was established by MAINPP.
Practical implications
This study is expected to contribute to the improvement of the Waqf Fund Scheme management.
Originality/value
The paper is the first attempt to address the Waqf Fund Scheme contributions by MAINPP, particularly in Penang.
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Fraz Inam, Aneeq Inam, Muhammad Abbas Mian, Adnan Ahmed Sheikh and Hayat Muhammad Awan
Considering the economic dimension of sustainability, the purpose of this paper is to analyze the risk of bankruptcy in the Pakistani firms of the non-financial sector from years…
Abstract
Purpose
Considering the economic dimension of sustainability, the purpose of this paper is to analyze the risk of bankruptcy in the Pakistani firms of the non-financial sector from years 1995 to 2017.
Design/methodology/approach
Three techniques were used which include multivariate discriminant analysis (MDA), logit regression and multilayer perceptron artificial neural networks. The accounting data of firms were selected one year before the bankruptcy.
Findings
Findings were obtained by comparing and analyzing the methods which show that neural networks model outperforms in the prediction of bankruptcy. They further conclude that profitability and leverage indicators have the power of discrimination in bankruptcy prediction and the best variables to predict financial distress are also found and indicated.
Practical implications
Practically, this study may help the firms to better anticipate the risks of getting bankrupt by choosing the right method and to make effective decision making for organizational sustainability.
Originality/value
Three different techniques were used in this research to predict the bankruptcy of non-financial sector in Pakistan to make an effective prediction.
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Pakistan had never been a place of serious and nuanced debate and contestation of politics of postcolonial critique, that is, the continuity of economic, political, and cultural…
Abstract
Pakistan had never been a place of serious and nuanced debate and contestation of politics of postcolonial critique, that is, the continuity of economic, political, and cultural dependency of newly independent countries (NICs) on ex-colonizers as pointed out by neocolonialism, dependency theory, and postcolonial theory, respectively. Instead, Pakistan is presented by extant liberal academic literature as a “failed nation” and a state dominated by the military and plagued by religious extremism. As opposed to this, through the literary and activists writings of Aziz-ul-Haq, this chapter will try to illustrate how cultural contestation of the nation-building project postindependence from British rule was a lot more complex and interesting in Pakistan. This was so because the nation-building project of Pakistan was, on the one hand, an amalgamation of Indo-Persian, Arab, Indian, and Western colonial and civilizational influences and, on the other hand, entailed suppression of resilient local and national cultures of its constituent nationalities developed over centuries. This was later expressed in ethno-nationalist politics. However, when it came to the politics of the marginalized in the late 1960s, there were important political, theoretical, and literary insights which caused a change in the direction of political practice in Pakistan, which paralleled the politics expressed by writers like Fanon and early Subaltern Studies influenced by the Naxal Movement in India. The contestation and confusion arising from this dialectic also entered Pakistan's literary and cultural sphere. This chapter not only tries to give a different postcolonial critique of the failure of nation-building project in Pakistan but, though at a preliminary level, is an attempt to separate the original postcolonial theory in its radical tradition from contemporary postmodern/poststructuralist postcolonial theory marked with pessimism and resignation.