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Article
Publication date: 28 June 2013

Farhana Ismail, M. Shabri Abd. Majid and Rossazana Ab. Rahim

The main purpose of this paper is to examine cost efficiencies of the selected Islamic and conventional commercial banks over the period of 2006 to 2009 in Malaysia.

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Abstract

Purpose

The main purpose of this paper is to examine cost efficiencies of the selected Islamic and conventional commercial banks over the period of 2006 to 2009 in Malaysia.

Design/methodology/approach

Data envelopment analysis (DEA) was initially used, to investigate the cost efficiency of the Malaysian banking sector and followed by Tobit regression analysis determine factors influencing the efficiency of Islamic and conventional banks in Malaysia.

Findings

The DEA results reveal technical efficiency as the main contributor of cost efficiency for conventional commercial banks and allocative efficiency as the main contributor for cost efficiency of Islamic commercial banks. This indicates conventional commercial banks have been efficient in utilizing information technology and electronics. Islamic commercial banks conversely have been efficient in allocating and utilizing their resources. Additionally, scale efficiency is found to be the main source of technical efficiency for both Islamic and conventional commercial banks, denoting that size is important in improving bank efficiency. The results of Tobit regression analysis are twofold. First, it documents capitalization and bank sizes are positively and significantly associated to efficiency. Secondly, loan quality is found to be negatively and significantly associated to efficiency.

Originality/value

This paper contributes to the body of knowledge through its literature discussions on the efficiency of both Islamic and conventional banks and the effect of banks' specific characteristics on their efficiency.

Details

Journal of Financial Reporting and Accounting, vol. 11 no. 1
Type: Research Article
ISSN: 1985-2517

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Article
Publication date: 1 January 2006

Mahmood K. Mawlood, Shahnor Basri, Waqar Asrar, Ashraf A. Omar, Ahmad S. Mokhtar and Megat M.H.M. Ahmad

To develop a high‐order compact finite‐difference method for solving flow problems containing shock waves.

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Abstract

Purpose

To develop a high‐order compact finite‐difference method for solving flow problems containing shock waves.

Design/methodology/approach

A numerical algorithm based on high‐order compact finite‐difference schemes is developed for solving Navier‐Stokes equations in two‐dimensional space. The convective flux terms are discretized by using advection upstream splitting method (AUSM). The developed method is then used to compute some example laminar flow problems. The problems considered have a range of Mach number that corresponds to subsonic incompressible flow to hypersonic compressible flows that contain shock waves and shock/boundary‐layer interaction.

Findings

The paper shows that the AUSM flux splitting and high‐order compact finite‐difference methods can be used accurately and robustly in resolving shear layers and capturing shock waves. The highly diffusive nature of conventional flux splitting especially on coarse grids makes them inaccurate for boundary layers even with high‐order discretization.

Originality/value

This paper presents a high‐order numerical method that can accurately and robustly capture shock waves without deteriorating oscillations and resolve boundary layers and shock/boundary layer interaction.

Details

International Journal of Numerical Methods for Heat & Fluid Flow, vol. 16 no. 1
Type: Research Article
ISSN: 0961-5539

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Article
Publication date: 1 June 2004

Mahmood K. Mawlood, ShahNor Basri, Waqar Asrar, Ashraf A. Omar, Ahmad S. Mokhtar and Megat M.H.M. Ahmad

A high‐order compact upwind algorithm is developed for solving Navier‐Stokes equations in two‐space dimensions. The method is based on advection upstream splitting method and…

1318

Abstract

A high‐order compact upwind algorithm is developed for solving Navier‐Stokes equations in two‐space dimensions. The method is based on advection upstream splitting method and fourth‐order compact finite‐difference schemes. The convection flux terms of the Navier‐Stokes equations are discretized by a compact cell‐centered differencing scheme while the diffusion flux terms are discretized by a central fourth‐order compact scheme. The midpoint values of the flux functions required by the cell‐centered compact scheme are determined by a fourth‐order MUSCL approach. For steady‐state solutions; first‐order implicit time integration, with LU decomposition, is employed. Computed results for a laminar flow past a flat plate and the problem of shock‐wave boundary layer interaction are presented.

Details

Aircraft Engineering and Aerospace Technology, vol. 76 no. 3
Type: Research Article
ISSN: 0002-2667

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Article
Publication date: 22 February 2008

Hamim S. Ahmad Mokhtar, Naziruddin Abdullah and Syed M. Alhabshi

In an attempt to enrich the literature of the efficiency of Islamic banks, this study aims to empirically investigate the efficiency of the fully fledged Islamic banks as well as…

14485

Abstract

Purpose

In an attempt to enrich the literature of the efficiency of Islamic banks, this study aims to empirically investigate the efficiency of the fully fledged Islamic banks as well as Islamic windows in Malaysia.

Design/methodology/approach

This study measures the technical and cost‐efficiencies of these banks using the non‐parametric frontier method, data envelopment analysis (DEA).

Findings

The findings show that, on average, the efficiency of the overall Islamic banking industry has increased during the period of study. The study also revealed that, although the fully fledged Islamic banks were more efficient than the Islamic windows, they were still less efficient than the conventional banks. Finally, Islamic windows of the foreign banks were found to be more efficient than Islamic windows of the domestic banks.

Originality/value

The findings of this study will provide some empirical insights as to how these two modes of Islamic banks had fared in the competitive environment from 1997 to 2003.

Details

Humanomics, vol. 24 no. 1
Type: Research Article
ISSN: 0828-8666

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Article
Publication date: 13 February 2017

Nor Nazihah Chuweni and Chris Eves

This paper aims to present a conceptual model on the efficiency of Islamic real estate investment trusts (I-REITs) available in Malaysia. The key difference between the Islamic…

1322

Abstract

Purpose

This paper aims to present a conceptual model on the efficiency of Islamic real estate investment trusts (I-REITs) available in Malaysia. The key difference between the Islamic and their conventional investment vehicle part is mainly its own Shariah framework. For instance, I-REITS must comply with the requirement of Securities Commission Act 1993 as well as the Guidelines on Islamic Real Estate Investment Trusts (Islamic REITs Guidelines).

Design/methodology/approach

The paper reviews and synthesises the relevant literature on the performance analysis and efficiency measurements of REITs. The paper then develops and proposes a conceptual model to measure the efficiency of Malaysian and Islamic REITs.

Findings

The paper identifies and examines the appropriate methods and instruments to measure the efficiency in relation to the risk and profitability of I-REITs. The efficiency measure is important for the fund managers to maximise the shareholders’ return in an investment of property portfolio as well as proposing the best way to allocate resources efficiently.

Research limitations/implications

This is a preliminary review of current work that identifies the issues that will be addressed in future empirical research. The authors will be undertaking this future empirical research in measuring the efficiency of Malaysian real estate investment trusts (M-REITs), particularly the I-REITs, using the non-parametric approach of data envelopment analysis.

Originality/value

To date, there has been very limited research on the efficiency measurement of I-REITs. The current analysis of REIT has been focused on traditional non-Islamic funds. This paper will review and discuss the current literature on efficiency measurement to determine the most appropriate approaches and methodologies for future application in performance analysis of efficiency measure for Malaysian and Islamic REITs.

Details

Journal of Islamic Accounting and Business Research, vol. 8 no. 1
Type: Research Article
ISSN: 1759-0817

Keywords

Available. Open Access. Open Access
Article
Publication date: 19 November 2020

Maizaitulaidawati Md Husin and Razali Haron

This paper aims to provide a systematic review of literature on the demand for takāful (Islamic insurance) from articles published from January 2009 to June 2019. The review aims…

3784

Abstract

Purpose

This paper aims to provide a systematic review of literature on the demand for takāful (Islamic insurance) from articles published from January 2009 to June 2019. The review aims to synthesise and segment previously published research to identify the gaps and provide future research direction.

Design/methodology/approach

A systematic review of the literature was conducted. Past research was analysed, and content comparisons based on research focus, context and methodology were evaluated.

Findings

It was found that not much has been written and published on takāful demand in quality journals. The first two articles were published in 2009, but it was only in 2017 that coverage of the topic rapidly expanded. Although no article was found to have been published in 2018 on takāful demand, there was one published article on the topic in 2019. This paper also found that not much attention has been given to takāful demand from the corporate sector.

Research limitations/implications

The defined rule for document searching and selection excluded out-of-scope documents that might be relevant. Furthermore, as this paper concentrates exclusively on articles published in English journals, the possibility that other relevant works do appear elsewhere in a different language is not denied.

Practical implications

Factors determining takāful demand are provided, and general directions are discussed, which managers can use to develop market share further.

Originality/value

Such an extensive review of literature on takāful demand has not been done before. Other than revealing ambiguities, gaps and contradictions in the literature, this paper sketches an avenue for further research. It also provides information and guidance for other researchers wishing to embark on research on takāful demand.

Details

ISRA International Journal of Islamic Finance, vol. 12 no. 3
Type: Research Article
ISSN: 0128-1976

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Article
Publication date: 13 June 2023

Yonis Ali Mukhtar and Galad Mohamed Barre

The purpose of this paper is to determine current and potential takaful customers’ perception of takaful product and its adoption in Somalia.

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Abstract

Purpose

The purpose of this paper is to determine current and potential takaful customers’ perception of takaful product and its adoption in Somalia.

Design/methodology/approach

This study used three originally selected constructs of perceived relative advantage, perceived compatibility and perceived complexity of diffusion of innovation (DOI) theory and adds three additional constructs of level of customer awareness, culture and perceived trust. A total of 427 questionnaires were collected from the participants of the study using a nonprobability convenience sampling technique. For data analysis, Smart PLS3 and SPSS software were used. The survey was conducted in Somalia, with respondents being current and potential takaful product’s customers. The DOI theoretical model was put to the test using structural equation modeling.

Findings

The findings showed that perceived relative advantage, perceived compatibility, awareness, perceived culture and perceived trust have a positive and significant influence, whereas perceived complexity has an insignificant influence on the adoption of takaful products.

Originality/value

This research is a pioneering attempt to investigate the determinants of current and potential takaful customers’ adoption by changing the DOI theory, and it presents a unique contribution to the field with regard to Somalia.

Details

Journal of Islamic Accounting and Business Research, vol. 15 no. 7
Type: Research Article
ISSN: 1759-0817

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Article
Publication date: 3 October 2016

Rossazana Ab-Rahim and Sheen Nie Chiang

The main purpose of this paper is to examine the relationship between the market structure and financial performance of Malaysian commercial banks over the period of 2000 to 2011…

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Abstract

Purpose

The main purpose of this paper is to examine the relationship between the market structure and financial performance of Malaysian commercial banks over the period of 2000 to 2011 by testing the structure-conduct-performance (SCP) and efficient-structure (ESH) hypotheses.

Design/methodology/approach

Data envelopment analysis (DEA) is employed to measure the efficiency of banks, while concentration ratio is used to assess the market structure of Malaysian banks. Next, utilizing the least squares method, both variables – market structure and efficiency of banks – among other explanatory variables (market share, operating expenses, loans ratio and size of banks) are regressed upon the dependent variable, namely financial performance of banks represented by return on asset (ROA), return on equity (ROE) and net interest margin (NIMTA).

Findings

The concentration of Malaysian banking industry is at a declining trend; structurally speaking, Malaysian banks are more competitive due to less market concentration. In terms of efficiency, the DEA results reveal that Malaysian banks are operating below their capacity at 40 per cent of efficiency. Thus, Malaysian banks could reduce their utilization of inputs by 60 per cent to operate on the efficient frontier. Next, the results offer support to ESH, which implies that market concentration and banking efficiency determines the profitability performance of Malaysian commercial banks.

Originality/value

Past studies on Malaysian banking sector had tended to focus either on measuring the performance or assessing the market structure of banks. Thus, this study attempts to fill the gap in the literature by testing the nexus between the market structure and the performance of banks.

Details

Journal of Financial Reporting and Accounting, vol. 14 no. 2
Type: Research Article
ISSN: 1985-2517

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Article
Publication date: 2 August 2013

Dipasha Sharma, Anil K. Sharma and Mukesh K. Barua

The purpose of this paper is to discuss a comprehensive literature survey of studies focusing on the efficiency and productivity of the banking sector using parametric and…

2300

Abstract

Purpose

The purpose of this paper is to discuss a comprehensive literature survey of studies focusing on the efficiency and productivity of the banking sector using parametric and non‐parametric frontier techniques.

Design/methodology/approach

Critically reviewing 106 studies published across the world from 1994 to 2011, a conceptual framework is developed for the studies assessing the efficiency and productivity of the banking industry using non‐parametric DEA frontier approach.

Findings

Both the frontier approaches, parametric and non‐parametric, are gaining an edge over the traditional financial performance measures. In the non‐parametric approach, data envelopment analysis (DEA) is widely applied to measure a bank's efficiency and productivity. Studies conducted in developed countries such as the USA, the UK and Europe are now emerging with the new concepts of banking efficiency.

Research limitations/implications

These findings are based only on the critical review of 106 studies. This study suggests the direction for future research and identifies the gap in existing literature with the development of a conceptual model.

Originality/value

This study is original in nature and included literature published in recent issues of 2011.

Details

Qualitative Research in Financial Markets, vol. 5 no. 2
Type: Research Article
ISSN: 1755-4179

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Article
Publication date: 16 November 2015

Muhammad Bilal and Ahamed Kameel Mydin Meera

The purpose of this paper is to develop a new Islamic credit card model that is in line with Shariah principles and can be adopted as an alternative to contemporary Islamic credit…

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Abstract

Purpose

The purpose of this paper is to develop a new Islamic credit card model that is in line with Shariah principles and can be adopted as an alternative to contemporary Islamic credit card models by Islamic financial institutions in Malaysia.

Design/methodology/approach

This paper is theoretical in nature and mainly based on descriptive research method approach.

Findings

The overall findings indicate that the contemporary practice of Islamic credit card in Malaysia is still controversial in its design and operation. Moreover, the adoption and practice of Shariah contracts in bay’ al-inah, tawarruq and ujrah models are not in line with fundamental doctrines of Shariah and are imbued with the practice of hilah (legal trick), which allows them to circumvent the prohibition of riba. The paper indicates that Al-Muqassah model possibly has a comparative advantage in design and operation when compared with the bay’ al-inah, tawarruq or ujrah models.

Research limitations/implications

The paper is limited to develop a new Shariah-compliant Islamic credit card model. The paper presents a design and defines the underlying Islamic financial contracts and their working mechanisms in the proposed model. However, it will not address other related areas like consumer perception, legal and regulatory requirements.

Practical implications

The paper will have direct implications on contemporary practice of Islamic credit card in Malaysia and elsewhere. The practice of Al-Muqassah model can also possibly have effects on common well-being and economic development.

Originality/value

The paper has relevance for Islamic financial institutions offering Islamic credit cards. The proposed model is fully in line with fundamental doctrines of Shariah and performs the key functions of an Islamic credit card.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 8 no. 4
Type: Research Article
ISSN: 1753-8394

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