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Article
Publication date: 21 June 2011

Kun‐ho Lee and Shakir Ullah

The purpose of this paper is to examine the different motivational factors that lead to customers' Islamic bank selection decision in Pakistan. In particular, it aims to look into…

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Abstract

Purpose

The purpose of this paper is to examine the different motivational factors that lead to customers' Islamic bank selection decision in Pakistan. In particular, it aims to look into the importance of Shari'a compliance for Islamic banks' customers and thereby the potential risk of deposits withdrawal in case of violations of Shari'a principles.

Design/methodology/approach

The paper presents descriptive statistics and cross‐tabulation analysis based on data collected from 357 customers.

Findings

The findings reveal that Islamic banks' customers highly value Shari'a compliance in their banks and that non‐compliance with Shari'a principles leads to disgruntled customers. An interesting pronouncement is that if an Islamic bank is involved in repeated violations of Shari'a, the customers are inclined to switch their banks. Nonetheless, the findings reveal that Shari'a compliance is not the only satisfaction yardstick for Islamic banks' customers; they also expect their banks to be convenient, technologically advanced and provide security of their capital.

Practical implications

The paper has profound implications for Islamic financial institutions operating in Pakistan. Although Shari'a compliance is the most important factor that Islamic banks need to observe, they also need to be competitive with conventional banks.

Originality/value

The paper is a unique contribution to Islamic banks' selection criteria where the importance of Shari'a compliance and conventional bank patronage factors has been explored. The paper's has practical implications for Islamic banks' owners and regulators.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 4 no. 2
Type: Research Article
ISSN: 1753-8394

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Book part
Publication date: 24 April 2023

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Abstract

Details

Essays in Honor of Joon Y. Park: Econometric Theory
Type: Book
ISBN: 978-1-83753-209-4

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Book part
Publication date: 24 April 2023

Kun Ho Kim, Hira L. Koul and Jiwoong Kim

This chapter proposes a test for a parametric specification of the autoregressive function of a given stationary autoregressive time series. This test is based on the integrated…

Abstract

This chapter proposes a test for a parametric specification of the autoregressive function of a given stationary autoregressive time series. This test is based on the integrated square difference between the empirical distribution function estimate and a convolution-type distribution function estimate of the stationary distribution function obtained from the autoregressive residuals. Some asymptotic properties of the proposed convolution-type distribution function estimate are studied when the model’s innovation density is unknown. These properties are in turn used to derive the asymptotic null distribution of the proposed test statistic. We also discuss some finite sample properties of the test statistic based on the block bootstrap methodology. A simulation study shows that the proposed test competes favorably with some existing tests in terms of the empirical level and power.

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Article
Publication date: 21 June 2021

Suzanna ElMassah and Heba Abou-El-Sood

As the popularity of Islamic banking and financial instruments continues to rise globally, a recurring empirical question is what specifically makes consumers choose Islamic…

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Abstract

Purpose

As the popularity of Islamic banking and financial instruments continues to rise globally, a recurring empirical question is what specifically makes consumers choose Islamic banking. This paper aims to investigate the determinants of bank type selection, especially in culturally diverse settings where the Islamic banking sector is well-established. It further examines whether consumers’ gender/religion influences their choices. One intuitive prediction is that Muslim consumers opt for Islamic banking products as “ethical” because of conviction-related reasons. However, the reality is not necessarily straightforward.

Design/methodology/approach

This paper uses structural equation modeling to examine data collected from a survey questionnaire of 790 respondents in an emerging market setting. Further analysis is made based on gender and religion to remove related bias.

Findings

Results suggest that overall consumer awareness significantly affects the selection of Islamic banking products. The positive effect of awareness is more significant for Muslim consumers relative to non-Muslims. Interestingly, social stimuli and bank attributes have an insignificant effect on the banking choices of both Muslims and non-Muslims.

Practical implications

Results suggest that Islamic banks’ marketing managers should adopt differentiated strategies for men and women, focusing on the core benefits of the service or personal interactions with consumers, respectively, along with a focus on different aspects of personal service for each gender. Awareness should be enhanced by adopting informative and effective marketing strategies to attract and retain consumers in the competitive bank environment. Islamic banks (IB) should pay attention to the religious effect without considering it as the sole variable motivating potential customers. They should design segmented and customized marketing strategies based on gender-religion market segmentation to suit different groups’ needs.

Originality/value

The findings fill a gap in the literature and provide Islamic bankers with insights to help design and articulate their business strategies to appeal to consumers in a multicultural context. Examining an integral part of gender and religion mitigates biased estimates due to the omission of variables. The study contributes to the existing literature on customer preferences for IB with a relatively large, new data set.

Details

Journal of Islamic Marketing, vol. 13 no. 11
Type: Research Article
ISSN: 1759-0833

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