Selamah Abdullah Yusof and Mohd Nahar Mohd Arshad
This study aims to investigate the level of business exposure to corruption in Malaysia. The authors estimate the effect of bribe requests from business establishments by public…
Abstract
Purpose
This study aims to investigate the level of business exposure to corruption in Malaysia. The authors estimate the effect of bribe requests from business establishments by public officials and identify the level of vulnerability of businesses to such requests.
Design/methodology/approach
This study uses firm-level data from the World Bank Malaysia Enterprise Survey 2014. The analyses are based on binary logit, tobit and generalized ordered logit regressions.
Findings
The authors find that one-fifth of firms applying for construction permits or had visits or meetings with tax officials were expected to pay bribes. Firms’ encounters with corruption were higher still when applying for import (29%) or operating license (24.7%). About 40% of the firms considered corruption an obstacle to their business operations to the degree of moderate, major and even severe. On average, 11% of firms’ total annual sales were apportioned for informal gifts or “speed money.” The authors also find that larger, younger and women-managed/owned companies were more likely to be targeted for bribe payments. The amount of bribe paid by foreign-owned firms was higher than the local firms. Manufacturing firms had lower incidences of bribe requests, but the amount paid was higher than services-related companies. Firms run or owned by women also, on average, paid a higher amount bribe.
Social implications
These findings should be taken into consideration in the efforts to eradicate corruption affecting businesses in Malaysia.
Originality/value
This study is unique in the sense that it is based on firm-level data for a Malaysian case.
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The purpose of this study is to investigate into the factors that influence charitable giving in Malaysia.
Abstract
Purpose
The purpose of this study is to investigate into the factors that influence charitable giving in Malaysia.
Design/methodology/approach
The study employs Malaysia’s Household Income Survey 2009. Results are obtained by undertaking a regression analysis. In the econometric model, charitable giving is proxied by transfer payment made by every respondent. The variable is considered as the dependent variable, while demographic, educational, occupational and geographical factors have been considered as the independent variables.
Findings
In general, factors such as income, age, educational levels, marital status, gender and geographical location have statistically significant effects on Malaysians’ charitable giving. A 1 per cent increase in income would result in an increase in charitable giving by 1.5 per cent, ceteris paribus. In Malaysia, charitable giving would initially increase and peaked at the age of 40 years before decline slowly over the working age – inverted-U shape of the charity–age curve. Women donate 8.7 per cent more than men. The upper secondary school has the highest marginal effects on charitable giving at 10.7 per cent. After upper secondary school, the marginal effects of subsequent levels of education on charitable giving diminish.
Research limitations/implications
The findings need to be supported with experimental studies for more consistent evidence.
Practical implications
Charitable giving can be nurtured especially through early years of education.
Social implications
The understanding derived from this study is crucial in the efforts to build an inclusive and caring heterogeneous Malaysian society.
Originality/value
This study pioneers large sample analysis to understand charitable giving behavior by Malaysians. The computation of marginal effects of education on charitable giving is another major contribution of this study.
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Syed Marwan and Mohamed Aslam Haneef
The purpose of this paper is to examine the world’s first social impact bond (SIB) and the lessons that can be learned for the Islamic finance industry to fulfil its true…
Abstract
Purpose
The purpose of this paper is to examine the world’s first social impact bond (SIB) and the lessons that can be learned for the Islamic finance industry to fulfil its true objectives.
Design/methodology/approach
The Peterborough SIB was recently announced to be successful in achieving its targeted social and investment outcomes, reducing recidivism by 9 per cent and paying back investors a 3 per cent pa return. The paper compares Peterborough SIB with socially responsible investment (SRI) sukuk in terms of form and substance, and finds that there are various lessons from the Peterborough SIB that can be useful for future development of Islamic financial products.
Findings
Innovative social financial tools such as SIB exemplify the true spirit of risk sharing and social responsibility, which is arguably missing in current practices of the Islamic finance industry. With the growing interest towards SRI strategies and increase in socially motivated investors, such financial tools may not only help the sustainable growth of the Islamic finance industry, but also fill in the gap between its theory and practice.
Practical implications
As such, the paper also proposes a social impact sukuk model which integrates the key aspects learned from Peterborough SIB. This includes prioritising social impact, measurable success indicators, data and management systems, flexible contracts, third sector integration, risk sharing and fostering the culture of innovation.
Originality/value
The findings can offer some practical insights in dealing with the issue of Islamic finance practice being overly concerned with its formal adherence with Islamic legal rules whilst neglecting its true fundamental values.
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Muhammad Iqmal Hisham Kamaruddin, Mustafa Mohd Hanefah and Rosnia Masruki
This study aims to explain the justification behind the current weak waqf reporting practices in waqf institutions in Malaysia and also investigates the factors affecting the good…
Abstract
Purpose
This study aims to explain the justification behind the current weak waqf reporting practices in waqf institutions in Malaysia and also investigates the factors affecting the good waqf reporting practices.
Design/methodology/approach
A series of interviews with four waqf officers who are involved with waqf reporting process from four different waqf institutions in Malaysia were conducted.
Findings
The findings show a number of reasons for the current weak waqf reporting practices including the absence of standardised waqf reporting standards, no reporting or disclosure awareness by the waqf management, limited reporting channels from the state authorities to the national authorities, diversification in the governance structure and reluctance of waqf administration to disclose waqf reporting. The findings also identified several factors contributing to good waqf reporting practices. This includes leadership, good cultural setting within the institution, political will as a push factor, limited qualified personnel as well as sustainability issues and finally, the visibility of the waqf report itself.
Practical implications
The study findings and recommendations are useful for the State Islamic Religious Councils and waqf institutions in Malaysia to enhance the waqf reporting practices in Malaysia.
Originality/value
This study is among the few studies that identify the reasons and factors affecting the good waqf reporting practices in Malaysia.
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A.W. Ainol-Basirah and A.K. Siti-Nabiha
This paper aims to systematically review studies of waqf accountability to conceptualise accountability in this unique setting.
Abstract
Purpose
This paper aims to systematically review studies of waqf accountability to conceptualise accountability in this unique setting.
Design/methodology/approach
This review followed the realist and meta-narrative evidence syntheses guidelines for meta-narrative review and used systematic searching for studies related to accountability in waqf institutions, based on the two main social sciences databases (Scopus and Web of Science). Thematic analysis was used to assess patterns regarding how researchers approached the concept of accountability in their studies, along with the context, the theories and the methods they used.
Findings
The number of research papers investigating the issue of waqf institutions’ accountability was severely limited in comparison to the growing literature on waqf institutions themselves. Existing research varies, with accountability practices understood through accounting, reporting and management perspectives, holistic accountability and studying various aspects antecedent to the achievement of accountability, such as governance, performance measurement and intellectual capital.
Originality/value
This study was conducted to fill the gap regarding a systematic review placing specific focus on accountability in the waqf institutional setting. The narrative from the review and suggestions for future research are provided to strengthen understanding of the current state of knowledge on accountability and direction, to enhance its usefulness in both theoretical building and practical improvement.
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This study aims at investigating the effect of corporate governance attributes on the Fraud disclosure of Takaful insurance companies in Saudi Arabia from 2014 to 2022.
Abstract
Purpose
This study aims at investigating the effect of corporate governance attributes on the Fraud disclosure of Takaful insurance companies in Saudi Arabia from 2014 to 2022.
Design/methodology/approach
This study uses a self-constructed disclosure index to quantify the level of fraud information using content analysis. The count regression (Poisson and negative binomial) models in panel data modeling are used to check the interdependence relationship between the Fraud disclosure and the corporate governance structure of 26 Takaful insurers.
Findings
The findings confirm the negative effect of ownership structure and the board size on the Fraud disclosure. However, the high proportion of independent board members, the audit board committee and the size of the risk board committee positively affect the extent of Fraud disclosure. Finally, this study provide evidence that large size of Shariah board is associated with a lower level of voluntary Fraud disclosure.
Research limitations/implications
Both economics-based theories and social exchange theory provide a better basis upon which to understand mechanisms by which board of directors in Takaful insurance provides external stakeholders with valuable information about corporate fraud.
Practical implications
It seems important to equip audit and Shariah board committee with the tools to give them an operational content that focus systematically on the “tone at the top” in investigating fraud, including disclosure and discipline.
Originality/value
Corporate governance is rapidly changing in Saudi Arabia and it is unclear whether adopting a corporate governance practices in financial institutions is appropriate for Islamic insurance companies.
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Shahab Udin, Muhammad Arshad Khan and Attiya Yasmin Javid
The purpose of this paper is to explore the role of corporate governance proxies by ownership structure on the likelihood of firms’ financial distress for a sample of 146…
Abstract
Purpose
The purpose of this paper is to explore the role of corporate governance proxies by ownership structure on the likelihood of firms’ financial distress for a sample of 146 Pakistani public-limited companies listed at the Karachi Stock Exchange over the period of 2003-2012.
Design/methodology/approach
The dynamic generalized method of moments (GMM) estimator and panel logistic regression (PLR) are used to determine the impact of corporate governance on the financial distress. The ownership structure is used as a determinant of corporate governance, while the Altman Z-score is utilized as an indicator of financial distress, as it measures financial distress inversely. The smaller the values of the Z-score, the higher will be the risk of financial distress.
Findings
The authors find insignificant impact of ownership structure on firms’ likelihood of financial distress based on the dynamic GMM method. However, the PLR results indicate that foreign shareholdings have a significant negative association with firms’ likelihood of financial distress, in the case of Pakistan. An evidence of a negative and insignificant relationship between institutional ownership and financial distress was observed, which indicates the passive role of institutional investors in Pakistan. The results also reveal a positive and significant relationship between insider’s ownership and likelihood of financial distress. This finding is consistent with the entrenchment hypothesis which predicts that insiders are more aligned with their self-interest than outside shareholders’ interest when their shareholding increases in the business. Furthermore, the results also reveal insignificant association between government shareholdings and the probability of financial distress. The reason could be the social welfare objective of the government entities rather than profit maximization.
Practical implications
The findings of this study provide more insight to corporate managers and investors about the association between the quality of corporate governance and the degree of financial distress, with respect to Pakistani firms. Furthermore, this study contributes to the existing literature by adding new evidence from developing countries like Pakistan which are helpful for regulatory bodies and policymakers in the formulation of long-term corporate governance strategies to manage the financial distress. It is well established that strengthening the quality of corporate governance practices enhances the efficiency of capital markets and reduces the probability of financial distress.
Originality/value
The study extends the body of existing literature on corporate governance and the likelihood of financial distress with reference to Pakistan. The results suggest that policymakers may pay special attention to the quality of corporate governance, specifically ownership structure, while predicting corporate financial distress.
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Aishah Binti Tamby Omar, Rasidah Arshad and Rosmah Mat Isa
This study aims to examine the relationship between tie strength and poor asnaf student’s normative commitment and its impact on behaviour.
Abstract
Purpose
This study aims to examine the relationship between tie strength and poor asnaf student’s normative commitment and its impact on behaviour.
Design/methodology/approach
A sample of 129 poor asnaf students participated in this study. SMART-PLS 3.2.8 was used to analyse the data.
Findings
The findings show that the tie strength dimension (trust, emotional intensity, mutual confiding and relational exchange) positively relates to poor asnaf student’s normative commitment. Also, the result shows that poor asnaf students’ normative commitment is positively related to recipient behaviour.
Research limitations/implications
This study focuses on poor asnaf students receiving zakat financial education aid.
Practical implications
The findings provide valuable information on the factors that encourage poor asnaf students’ normative commitment. Related parties, such as the zakat institution, could use these findings to plan further action to enhance the poor asnaf student’s normative commitment and behaviour.
Originality/value
The study showed that the social tie strength framework could be used to determine the variables affecting poor asnaf student’s normative commitment and behaviour.
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Saleh F.A. Khatib, Dewi Fariha Abdullah, Hamzeh Al Amosh, Ayman Hassan Bazhair and Ali Shariff Kabara
This study aims to present a detailed investigation of Shariah audit research based on a systematic literature review.
Abstract
Purpose
This study aims to present a detailed investigation of Shariah audit research based on a systematic literature review.
Design/methodology/approach
A total of 53 studies were collected from the Scopus and Web of Science databases following a systematic methodology. These studies were analyzed and evaluated based on the theoretical perspective, geographical distribution, research settings and themes background.
Findings
The findings indicate an increase in the literature on Shariah auditing over time, especially in the Malaysian context, with a dearth of research in other contexts and institutions (Takaful). It has been also revealed that the existing literature is still unclear about the effectiveness and consequences of effective Shariah auditing, pointing the need for more work on these areas. The authors outline opportunities for future Shariah auditing research.
Originality/value
The synthesized findings are helpful for policymakers and managers to understand better how research in Shariah auditing is developing and how to translate research findings into practice. To the best of the authors’ knowledge, this is the first research to comprehensively synthesize the literature on this topic and identify the potential opportunities for future research directions.
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Malek Alshirah and Ahmad Alshira’h
The aim of this study is to measure the risk disclosure level and to determine the relationship between ownership structure dimensions (institutional ownership, foreign ownership…
Abstract
Purpose
The aim of this study is to measure the risk disclosure level and to determine the relationship between ownership structure dimensions (institutional ownership, foreign ownership and family ownership) and corporate risk disclosure in Jordan.
Design/methodology/approach
This study used a sample of 94 Jordanian listed firms from the Amman Stock Exchange for the period from 2014 to 2017. This study measured risk disclosure using the number of risk-related sentences in the annual report, while random effects regression was used for hypotheses testing.
Findings
The results revealed that family ownership has a negative effect on risk disclosure practices, but institutional ownership, foreign ownership, firm size and leverage have no significant effect on the risk disclosure level.
Practical implications
The finding of this study is more likely be useful for many concerned parties, researchers, authorities, investors and financial analysts alike in understanding the current practices of the risk disclosure in Jordan, thus helping them in reconsidering and reviewing the accounting standards and improving the credibility and transparency of the financial reports in the Jordanian capital market.
Originality/value
This study offers novel evidence detailing the impact of ownership structure toward corporate risk disclosure, its implementation in emerging markets following the minimal amount of scholarly efforts on the topic. To the best of the authors’ knowledge, this is the first examination of the impact of ownership structure on corporate risk disclosure. Thus, this study has important implications for the decisions of executives, policymakers, shareholders and lenders, as it enables them to better understand the linkage between ownership structure on corporate risk disclosure.