A. Bouteska, Mohamad Kabir Hassan and M. Faisal Safa
This paper aims to use three proxy variables – initial public offerings, trading volume and business confidence index (BCI) to construct an investor sentiment index both for the…
Abstract
Purpose
This paper aims to use three proxy variables – initial public offerings, trading volume and business confidence index (BCI) to construct an investor sentiment index both for the USA and China, taking into account the challenging periods of the COVID-19 pandemic and the Russo-Ukrainian conflict.
Design/methodology/approach
Based on monthly data for a period from January 2009 to June 2022, this paper uses data of BCI, consumer confidence index (CCI), gross domestic product, trading volume and Fama and French (1993) factor data; linear regression of single and multifactor model; and EGARCH-M model for analyzing the effect of investor sentiment on stock market return and volatility, both in the USA and China.
Findings
The empirical results indicate the suitability of BCI over CCI as a measure of investor sentiment, both in the USA and China. The results indicate that investor sentiment has a significant positive effect on the excess returns in the stock market in both countries. Moreover, the effect of investor sentiment is higher in China than it is in the USA. Such an effect of investor sentiment is significant and fluctuates asymmetrically in the short run but loses its significance in the long run. Optimistic investor sentiment has a larger effect on the stock market volatility in the USA, while the pessimistic investor sentiment has a larger effect in the Chinese stock market.
Originality/value
This paper focuses on finding a more suitable proxy for investor sentiment from BCI or CCI. This paper also contributes by including both optimism and pessimism in explaining the stock return and volatility in both markets. The overall findings are important for understanding investor behavior in different market conditions.
Details
Keywords
Noura Metawa, M. Kabir Hassan, Saad Metawa and M. Faisal Safa
This paper aims to investigate the relationship between investors’ demographic characteristics (age, gender, education level and experience) and their investment decisions through…
Abstract
Purpose
This paper aims to investigate the relationship between investors’ demographic characteristics (age, gender, education level and experience) and their investment decisions through behavioral factors (sentiment, overconfidence, overreaction and underreaction and herd behavior) as mediator variables in the Egyptian stock market.
Design/methodology/approach
This paper collects data from a structured questionnaire survey carried out among 384 local Egyptian, foreign, institutional and individual investors. This paper used a partial multiple regression method to analyze the effect of investors’ demographic characteristics on investment decisions through behavioral factors as the mediator variable.
Findings
Investor sentiment, overreaction and underreaction, overconfidence and herd behavior significantly affect investment decisions. Also, age, gender and the level of education have significant positive effects on investment decisions by investors. Experience does not play a significant role in investment decisions, but as investors gain experience, they tend to overlook the emotional factors.
Practical implications
The findings of this paper would help to understand common behavioral patterns of investors and indicate a path toward the growth of the Egyptian stock market.
Originality/value
There is a lack of research in behavioral finance covering Middle East and North African markets. This paper attempts to fulfill the gap by analyzing behavioral factors in the Egyptian market.
Details
Keywords
M. Kabir Hassan, Benito Sanchez and M. Faisal Safa
This paper aims to examine the impact of financial liberalization and foreign Islamic bank entry on the performance of domestic Islamic banks, and credit availability to the…
Abstract
Purpose
This paper aims to examine the impact of financial liberalization and foreign Islamic bank entry on the performance of domestic Islamic banks, and credit availability to the private sector.
Design/methodology/approach
The authors use the weighted least squares method to estimate four models. These models are suggested by Lee. For this, the inverse of the number of domestic Islamic banks in each period is used to weight the observations in the regressions to correct for varying number of bank observations in each country.
Findings
The results indicate that foreign Islamic banks, on average, follow aggressive financing in host countries and enjoy higher net profit margin. Banking sector returns play an important role in the entry decision and presence of foreign banks. Moreover, favorable macro‐economic conditions play a supportive role while higher tax policies play a hostile role for the entry and presence of foreign Islamic banks. The recent financial crisis does not seem to affect the entry decision significantly. But the profitability of domestic Islamic banks has been seriously affected by the recent crisis. Also domestic tax policy and macro‐economic environment play important roles in determining the domestic Islamic bank performance. Results also indicate that private sector credit availability seems to suffer because of higher tax and reserve rate.
Practical implications
The authors' findings suggest that host Islamic economies should strive for an efficient capital market with supportive macro‐economic environment, which in turn helps the local banking sector to develop and benefit from the foreign Islamic bank entry.
Originality/value
This is the first paper to analyze the entry of foreign Islamic banks in the host countries with Islamic banking sector.
Details
Keywords
Tala Abuhussein and Tamer Koburtay
Drawing on the “5Ms” gender cognizant framework, this study seeks to investigate how money, motherhood, management, the market and the macro/meso environment dimensions of the 5Ms…
Abstract
Purpose
Drawing on the “5Ms” gender cognizant framework, this study seeks to investigate how money, motherhood, management, the market and the macro/meso environment dimensions of the 5Ms may influence women's entrepreneurship in Jordan. A related aim is to offer in-depth insights and a fresh understanding of potential factors not included in the original 5Ms model.
Design/methodology/approach
The study takes a qualitative-inductive approach, using semi-structured interviews with 14 women entrepreneurs from various industries in Jordan.
Findings
The paper highlights the positive (or adverse) impact of the 5Ms factors (motherhood, macro/meso environment, the market, management and money) on women entrepreneurs in Jordan and introduces new emerging factors. The paper concludes with an extended view of the 5Ms model.
Practical implications
This study may help develop greater sensitivity and understanding about some of the adverse gender practices faced by women entrepreneurs. Policymakers in Jordan and other Arab countries may consider empowering women entrepreneurs in terms of offering more financial funds and facilities, social support, and managerial empowerment.
Originality/value
The study creates more sensitivity and awareness about the current dynamics, opportunities and impediments that affect women entrepreneurs; thus, it contributes to the extant literature by suggesting new propositions and a novel framework. This study extends Brush et al.'s (2009) 5Ms gendered framework by adding three important factors (Mental health, Maturity and Maintainability). The empirical update and contextual extension of Brush et al.'s (2009) 5Ms model highlight a theoretical contribution.
Details
Keywords
Javid Iqbal, Muhammad Khalid Sohail and Muhammad Kamran Malik
This study aims to predict the financial performance of Islamic banks with sentiments of management from the textual information in annual reports.
Abstract
Purpose
This study aims to predict the financial performance of Islamic banks with sentiments of management from the textual information in annual reports.
Design/methodology/approach
The study uses data from 33 Islamic banks in six Islamic countries from 2006 to 2020. The authors estimate the model using the system GMM because it helps dealing with endogeneity problem, which are inherent in panel data.
Findings
The findings of the study reveal that there is a strong relationship between the sentiment expressed by management in annual reports and the current (future) financial performance of Islamic banks. The higher the positive sentiments of management, the better financial performance. In addition, the study also suggests that negative sentiments using term frequency-inverse document frequency is linked to a decrease in banks’ financial performance.
Research limitations/implications
The study does not present the Islamic view on sentiment analysis in the context of Islamic scriptures due to the unavailability of a relevant dictionary.
Practical implications
The findings of the study suggest that developing accurate models with the help of textual information for performance prediction of Islamic banks help shareholders, regulators and policymakers avoid devastating events. Using textual information may also help reduce the information asymmetry between the management and shareholders, which may lead to more efficient bank supervision. The study can also help investors evaluate their prospective investments in the Islamic bank.
Originality/value
To the best of the authors’ knowledge, this study is the first of its kind that uses management sentiments for performance prediction of the Islamic banking sector. It may add a valuable contribution to the existing literature.
Details
Keywords
Entissar Elgadi and Wafa Ghardallou
This paper aims to empirically assess the impact of gender diversity and board of directors’ size on Islamic banks’ performance.
Abstract
Purpose
This paper aims to empirically assess the impact of gender diversity and board of directors’ size on Islamic banks’ performance.
Design/methodology/approach
Hand-collected data set including 27 banks from 2005 to 2013 is used to investigate the effect of the above mechanisms on banks’ performance as measured by return on equities and return on assets. The study uses pooling regression, which requires estimating a single equation on different cross-sectional data. Specifically, ordinary least squares is used to estimate the model.
Findings
Obtained results suggest that the presence of women on the board of directors does not have a significant influence on banks’ performance. However, gender diversity in the management department is found to have a negative and significant impact. Besides, the findings prove that the board of directors’ size adversely affects banks’ performance.
Research limitations/implications
Findings of this study will enhance a better understanding of the interrelationships between performance measures and determinants, which can improve estimations of key inputs in the decision-making process. Such deeper understanding should provide policy and decision makers with an important part of the framework needed to provide quality outcomes. In addition, the results of this study provide some beneficial insights on performance determinants to the policymakers, industry leaders and bank managers. Accordingly, those parties could enhance the profitability of Sudanese Islamic banks by improving capitalisation and assets utilisation and by improving banks operation efficiency, leverage and by reducing the size of the board of directors. Industry leaders and bank managers could also benefit from the findings on bank age, which suggest that they can learn from the experience of newly established banks, as the latter are shown to be able to use their resources to generate more profits.
Practical implications
Results suggest that in the future, Islamic banks should focus on how to weaken the negative performance effect of female executives’ participation. Besides, banks should work to decrease labour market discrimination and increase long-term career commitment amongst women.
Originality/value
After reviewing the literature, the research objective was not accounted for by the existing empirical works. Indeed, the role of gender diversity and board of directors’ size on a bank’s performance was not examined in the case of Sudanese Islamic banks.
Details
Keywords
Salman Alzayani, Mohammed Al Sedran, Safa Aburowais, Jumana Hammad, Noora Almuaili, Shaikha Alkawari, Rayan Bureshaid, Muhannad Almalki, Amer Almarabheh and Afif Ben Salah
Seasonal influenza epidemics accounted for significant morbidity and mortality loads worldwide despite the availability of a safe vaccine as an efficient tool against severity of…
Abstract
Purpose
Seasonal influenza epidemics accounted for significant morbidity and mortality loads worldwide despite the availability of a safe vaccine as an efficient tool against severity of the disease. However, the uptake of the latter was sub-optimal. This study aims to identify predictors and barriers related to seasonal influenza vaccine uptake in the Kingdom of Bahrain.
Design/methodology/approach
A cross-sectional study enrolled 502 individuals attending primary healthcare centers in Bahrain for ambulatory care between July and August 2022. The data were collected using an interviews-based questionnaire which included questions on demographic data, knowledge and attitudes and practices toward influenza vaccine. The authors identified the barriers as well as the determinants of the vaccine uptake and its recommendation to others.
Findings
The mean age of participants was 35.07 years (SD = 13.9). Most of the respondents were Bahraini (86.5%) and 53.4 % were females. The results revealed that 34.1% have previous information about the influenza vaccine and 36.9% versus 69.9% are willing to receive the vaccine or advice it to others, respectively. Determinants of vaccine uptake were identified.
Originality/value
This study confirmed a sub-optimal influenza vaccine acceptance in the general community of Bahrain despite a global access in primary care. Health professionals need to be more proactive in mobilizing the community and particularly females toward influenza vaccination.
Details
Keywords
Yeslam Al‐Saggaf and Mohamed M Begg
There is a major transformation taking place in the Arab and Muslim worlds. People in these nations are poised on the edge of a significant new social landscape. Called the…
Abstract
There is a major transformation taking place in the Arab and Muslim worlds. People in these nations are poised on the edge of a significant new social landscape. Called the Internet, this new frontier not only includes the creation of new forms of private communication, like electronic mail and chat, but also webbased forums, which for the first time enables public discussion between males and females in conservative societies. This paper has been written as a result of an ethnographic study conducted in Saudi Arabia during the period 2001‐2002. The purpose of the study was to understand how online communities in Saudi Arabia are affecting people. The results of the study indicate that while participants to a large extent used online communities in accordance with their cultural values, norms and traditions, the communication medium and the features associated with it, such as the anonymity and lack of social cues, have affected them considerably. For example, many participants became more flexible in their thinking, more aware of the diverse nature of people within their society, less inhibited about the opposite gender, and more self‐confident. On the other hand, participants neglected their family commitments, became less shy and some became confused about some aspects of their culture and religion. These findings and their implications for the Arab and Muslim worlds will be highlighted in this paper.
Details
Keywords
Safa Jallali and Faten Zoghlami
Relying on the agency theory and the financial intermediation theory, the purpose of this paper is to examine to what extent risk governance would improve corporate governance and…
Abstract
Purpose
Relying on the agency theory and the financial intermediation theory, the purpose of this paper is to examine to what extent risk governance would improve corporate governance and risk management effectiveness. The paper especially investigates the mediating role that would have the risk governance mechanisms in explaining both of the following relationships: the corporate governance–the banks’ performance, and the risk management–the banks’ performance.
Design/methodology/approach
This research uses the Baron and Kenny’s (1986) approach to investigate the mediating effect of risk governance; besides, the study refers to structural equation modeling in carrying out the appropriate panel regressions. The data collection was based largely on Bank scope Database, but some missing qualitative data were gathered manually from the banks’ annual reports available on the banks’ websites.
Findings
The study findings illustrate the significant role of risk governance mechanisms in improving both corporate governance and risk management’s effectiveness. Especially, this paper finds that risk governance is fully explaining the corporate governance–bank performance relationship, but risk governance would explain partially the risk management–bank performance relationship. Further, findings suggest that the internal corporate governance mechanisms seem to be more relevant than the external ones in improving the sample bank performance, and that risk management mechanisms seem to impede rather the sample bank performance.
Practical implications
The findings would make an important contribution to the current debate on the need to reinvent the optimal organization of the bank’s board and directorates and would allow readers to develop more cost-effective governance and risk-management thinking. Besides, the findings may help bank deciders and boards to rationalize costs and to focus only on the relevant corporate governance and risk management mechanisms. Finally, findings might illustrate to regulatory instance the importance of recommending risk governance in their coming corporate governance guidance.
Social implications
The global credit crisis of 2008 caused significant difficulties to financial institutions, so it would be worth enlightening practitioners and policymakers, even regulators, on the importance of considering the level of potential risk and risk monitoring as a key component in the decision-making process, to strengthen the stability and resilience of banks in an increasingly uncertain environment.
Originality/value
The issues raised in the paper are important in that Islamic banking is an integral part of the global banking and finance industry. This paper extends the knowledge of the potential importance of the new concept of risk governance with specific reference to Islamic banking industry peculiarities. It also provides a telling illustration of the need for the enhancements of the Basel Committee’s prudential requirements as well as the accounting and auditing organization for Islamic financial institutions and Islamic Financial Services Board set out especially regarding the consideration of risk in the strategic decision process.
Details
Keywords
M. Mansoor Khan and M. Ishaq Bhatti
The main objective of this paper is to highlight the unprecedented growth of Islamic banking and finance in the contemporary finance world. It captures the advancements of Islamic…
Abstract
Purpose
The main objective of this paper is to highlight the unprecedented growth of Islamic banking and finance in the contemporary finance world. It captures the advancements of Islamic banking and finance industry across the tools, systems, sectors, markets and over 75 countries from Africa, Asia, Europe and North America.
Design/methodology/approach
The paper deals with the paradigm of Islamic banking and finance. It constitutes a general review that bears special features, facts and figures over the recent developments of Islamic banking and finance across the globe. It takes stock of the growing institutional and infrastructure support for the Islamic banking and finance system in Muslim countries and Western financial markets.
Findings
The findings of the paper hold that Islamic banking and finance industry has been making breakthrough improvements to become a truly viable and competitive alternative to conventional systems at the global level. Islamic banking and finance institutions have acquired booming grounds in the Middle East, South East and South East Asia. These growing Islamic hubs have been acting as a launching pad to promote Islamic banking in Western business and financial markets. There are some core factors contributing to the recent success of Islamic banking and finance, such as spiraling oil prices worldwide, prolonged boom in the Middle Eastern economies, product innovation and sophistication, increasingly receptive attitude of conventional regulators and information technology advancements that have been acting as a catalyst for the Islamic banking and finance industry to go global. Given all growth patterns, Islamic banking may be able to win over the majority of customers from the Muslim world that constitutes almost 24 per cent of the world's population (over 1.3 billion), and other ethical groups across the globe in times ahead.
Research limitations/implications
The paper takes stock of on‐going developments in Islamic banking and finance industry worldwide. It deals with latest information, facts and figures, which however do not amount to a substantive volume to allow statistical testing and analysis to figure out the main factors and their actual contributions in making Islamic banking and finance emerge as the fastest growing industry of the global finance. This paper mostly bears a subjective outlook.
Originality/value
The paper aims to attract the global attention towards the fastest growing industry of the contemporary world of finance. It presents the case of the Islamic banking and finance industry in the most powerful, comprehensive and logical fashions to remove all misgivings about it in some circles, and let it be seen as an industry adding more ethical, competitive, flexible and diversified tools and systems to global financial markets. The paper highlights the increasing moral and material support that Islamic banking has been enjoying from Muslim governments and the public, and Western market players and regulators. It draws attention towards the growing number of products, systems, infrastructures and supporting institutions of Islamic banking over the recent years. The current trends of Islamic banking industry worldwide captured in this paper can tell all about its strength and weakness, future prospects and ambitions to become a truly innovative, competitive and integrated part of contemporary global finance.