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In standard discussions (capitalistic economy), business firms and the income‐distribution property of production factors are dealt with in a manner in which they are independent from each other and there is no interaction as such between them. Furthermore, no role whatso‐ever is assumed for externalities. If we accept that there is interaction between production factors and these factors because of the existence of externalities affects each other, therefore it is only natural to come to this conclusion that both the definition of business firm and the share of production factors should be changed. The proposal developed in this paper is based on this very important consideration. The profit share of Mudareb (profit‐sharing agent) has been used in this paper to cover more general issues, such as labor's income share in an Islamic system. The Mudareb's relative share might be justified on the grounds that he has the appropriate expertise, profession, so to speak. This justification can be extended to “labor” in general, be it in industry, services, and other economic activities. It seems that, it is not only the degree of expertise and skill which determines the labor's share, but also its interaction with other expertises which makes one qualified to share part of the profit. This interaction provides better results than the same of individual skills. The application of the proposal not only increases output and hence the total revenue of a firm, but also helps keep the production cost at its lowest possible level. Furthermore, it leads one to look at a firm as an interacting body of different expertise. Increase in efficiency together with low production costs are to the mutual benefits of both the workers and the firm. Furthermore, there would not only be zero monitoring cost, but also eliminates shirking while increasing the effort of the workers to its maximum level.

Banks perform, in general, two functions; one is to collect deposits and the other is to issue loans. In the traditional banking system depositor would be guaranteed a predetermined return on the nominal value of the deposit by the bank; furthermore, in most cases the deposits, themselves, are insured (FDIC is an example). Loan users in return pay a predetermined return on the amount of fund used; besides, the user has to provide a safe collateral in order to guarantee the principal and the interest. Hence it can be safely said that these banks play a passive role in the economy in the sense that their operations are quite inflexible in the face of any economic fluctuations. As the result it has rightly been said that in these banks “…since the nominal value of deposits is guaranteed … shocks that can lead to banking crisis can cause divergence between real assets and real liabilities and it is not clear how this equilibrium would be corrected and how long the process of adjustment would take.” This is the real essence of fund intermediary function of a traditional (capitalistic) bank.

This paper aims to explain and present a theoretical framework for providing people with savings to finance two sectors: profitable investment and Gharz-al-Hassane. To do this first, assumptions and presumptions of the theory and framework are expressed, and then the effect of belief on this behavior is explained. Subsequently, this theoretical framework is evaluated in an empirical research.

The theoretical framework is explained by mathematical and logical methods. The experimental study is carried out using real data of 500 households from Zahedan (Center of Sistan and Baluchestan Province of Iran). Data were collected using questionnaire and were analyzed using statistical and econometric methods.

The result indicates that demands of Iranian people are not met within the framework of official markets. This disparity in supply and demand has led to the actions of people outside the formal framework, and so, banks and financial institutions cannot exploit the supply of people’s savings. On this basis, key factors determining people supply in a variety of markets are religious belief, age, income, education level, religious experience and so on, which should be considered in designing the Islamic banking and financial tools.

Today, economics and marketing have shown that an enterprise needs to meet customer demand to succeed. In the field of Islamic banking and finance, financial firms and banks should know this too. However, there are not many research studies in this area.

The purpose of this paper is to study the differences or variance in the yields of Islamic and conventional bank deposits and capital, respectively, in view of their contractual differences, namely the former which is based on equity and the latter on debt.

The paper uses a financial ratio approach.

It was found that deposit yields in conventional banks were lower than return on equity (ROE), which truly reflect the contractual differences between fixed deposit and bank's capital. Also, it was found that Islamic banks' deposit yield and ROEs do not reflect their risk‐taking properties, as their variances were found to be smaller.

The paper adds to the literature on risk‐return relationship in Islamic capital theory, which currently lacks theoretical studies.

The paper shows that increasing the level of risk taking in mudarabah investment account could increase its expected returns.

Since both shareholders' capital and mudarabah investment accounts constitute risk capital, variance in yields should be proportional to risk. The paper is the first attempt to explore and compare yields from Islamic bank capital and mudarabah deposits.

The purpose of this paper is to assess the contribution of Islamic finance to economic growth in countries that were early adopters of Islamic banking: Malaysia, Indonesia and the Gulf Cooperation Council (GCC) countries.

Through panel cointegration analysis, variance decompositions (VDCs) and impulse response functions, this study investigates the Islamic finance and growth nexus.

Islamic banking is found to contribute to economic growth both in the long run and the short run for both GCC countries and the selected East Asia (EA) countries. In the short run however, Islamic banking contributes more to economic growth in Malaysia and Indonesia compared to the GCC countries.

The results lend support to the view that Islamic intermediation not only leads to economic benefits but also; increases managers' entrepreneurial skills through the involvement of the lender in the decision making and the partnership like relationship between the fund provider and the entrepreneur and also; reduces agency costs which produces positive impact on both the economy and the development of the society. This serves as a motivation for other countries to continuously promote Islamic finance.

To assess the importance of Islamic finance to economic growth, this study compares two main regional Islamic financial hubs, the GCC and EA countries. Another novel aspect of this study is in the methodology; it employs panel cointegration analysis, VDCs and impulse response functions on the set of annual data for period of 2000-2009.

This study aims to investigate the behavioural intention and adoption of internet banking (IB) among clients of local and foreign Islamic banks in Malaysia.

Survey questionnaires were distributed among the Islamic banks’ clients at two main states, namely, Kuala Lumpur and Selangor. The number of clients involved is 319 (n = 319). The data was analysed using the partial least square (PLS) and theoretically, the research framework in this study is guided by the unified theory of acceptance and use of technology 2 (UTAUT2).

The smart PLS analysis yielded three main outcomes, namely, the variables such as performance expectancy, effort expectancy, price value, facilitating conditions and habit have a positive influence over the behavioural intention and subsequently lead to the adoption of IB. The other two variables, namely, social influence and hedonic motivation were negatively-related and insignificant for behavioural intention. Third, this paper also noticed that facilitating conditions and habits have a direct relationship with the adoption of IB.

Based on the findings, Islamic banks can take necessary action to design a better policy to further accelerate the usage of IB among their client. By identifying those factors, this, perhaps, can allow Islamic banks to invest more ideas on those significant factors that influence their interest, and subsequently leads to good business to Islamic banks as the clients nowadays are looking for simplicity and convenience factors when using IB.

This research is expected to enhance existing literature on internet banking, especially in Islamic banking research on the technological edge. Limited research has been done in Malaysia, particularly on the intention and continuous adoption of IB in Islamic banks using the UTAUT2 framework. This would be breakthrough research in identifying factors that influence customers’ continuous adoption of IB.

The purpose of this paper is to find out whether profit‐and‐loss‐sharing (PLS) modes of finance have become viable financial alternatives for entrepreneurship and enterprise development or whether they are still merely an academic endeavour.

The method employed in this study is a combination of extensive examination of existing literature and critical analysis of the outcomes of several relevant studies in order to establish the convergent/divergent relationship between theory and practice in Islamic finance.

Based on available bank level and country level data, the paper presents evidence that the divergence between the theoretical perspective and the practical implementation of PLS modes of finance is widening to an alarming level. The paper argues that this divergence by no means can be attributed to the construct and the disposition of the PLS instruments; it is rather the product of the negative attitude and the lack of proper infrastructure of the majority of Islamic financial institutions (IFIs) – and their (reluctance) to accommodate entrepreneurship through the genuine implementation of PLS instruments.

The findings of this study draw attention to the visible shortage in practical research pertaining to the application of the principles of PLS modes in financing entrepreneurial activities. The study suggests that the relevance, the direction and the resilience of future research undertakings should be focused on bridging the increasing gap between the prescribed role of PLS instruments and the actual performance of IFIs in promoting socio‐economic development through the creation of a vibrant entrepreneurship sector.

The paper points out that while PLS models dominate the theoretical literature on Islamic finance, and whereas the majority of mainstream Muslim scholars and financial authorities overwhelmingly judge PLS models as being compelling financial options and practical developmental tools, the reality of Islamic finance paints a different picture. The paper emphasizes the need for IFIs to conform to their own charters and assume a leading developmental role in order to realize al‐Shariah objectives (maqasid al Shariah). The paper identifies key research areas that warrant the attention of keen researchers with interest in the field of Islamic finance and entrepreneurship development.

The purpose of this research is to seek better relational strategies between formal and informal stakeholder relationships to improve megaproject performance.

The conceptual model was developed with twenty hypotheses based on the literature review. Then a questionnaire survey was conducted, and the collected data were analyzed by Partial Least squares Structural Equation Modeling (PLS-SEM) for validating the proposed model. Finally, the findings were discussed by a comparative study to explain the different effects of the formal and informal relationship on megaproject performance, and the managerial implications are presented for the stakeholders to implement the relationship management in the megaprojects.

The research finding reveals that formal relationship plays a dominating role in cost, quality, and labor protection; meanwhile, it is still more reliable in improving coordination, safety and environmental protection. Both formal and informal relationship is equally important towards collaboration and scheduling while the informal relationship is more effective in communication and project transparency.

The study extends the knowledge of relationship management in the domain of the megaproject performance. It provides a comprehensive and systematic understanding of the impact of formal and informal stakeholder relationships on ten aspects of the megaproject performance by the proposed conceptual model and PLS-SEM results. The research findings contribute to the theory of relationship management on how the different influences between formal and informal stakeholder relationships lead to better megaproject performance from inter-organizational level to project and societal level.