Kamal Naser and Yousef Mohammad Hassan
This study aims to examine the underlying determinants that may influence external audit fees paid by Emirati nonfinancial companies listed on Dubai Financial Market (DFM).
Abstract
Purpose
This study aims to examine the underlying determinants that may influence external audit fees paid by Emirati nonfinancial companies listed on Dubai Financial Market (DFM).
Design/methodology/approach
Data used in this study are mainly collected from the 2011 annual reports and corporate governance reports published by the Emirati nonfinancial companies listed on DFM. Backward regression analysis is used to measure the impact of a set of company characteristics on Emirati non-financial listed firm’s audit delays.
Findings
The findings pointed to a significant and positive association between audit fees and each of corporate size and audit committee independence variables. A significant and negative relationship has been detected between external audit fees and business complexity. The findings also revealed that audit fees are not significantly associated with company’s profitability, risk, industry type, status of audit firm and audit report lag.
Originality/value
The paper helps in expanding limited existing literature about the determinants of audit fees in the Arab and Middle East countries generally and in the UAE context particularly. No prior attempt had been made to investigate the determinants of audit fees paid by Emirati firms listed on DFM because the disclosure of audit fees services provided by external auditors only became effective after April 30, 2010. The findings of the study may be generalized to other Arab countries, particularly neighboring Gulf Cooperation Council states, that have a similar socio-cultural environment.
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Muhammad Nouman, Muhammad Fahad Siddiqi, Karim Ullah and Shafiullah Jan
This paper aims to conceptualize the nexus between the participatory finance and the higher ethical objectives within the Islamic moral economy, also termed as Maqasid al Shari’ah.
Abstract
Purpose
This paper aims to conceptualize the nexus between the participatory finance and the higher ethical objectives within the Islamic moral economy, also termed as Maqasid al Shari’ah.
Design/methodology/approach
Insights from the extant Islamic economics and finance literature are integrated through an interpretative systematic review using the principles from critical interpretative synthesis (CIS).
Findings
A coherent framework is synthesized comprising the typology of the Maqasid al Shari’ah, the axioms of participatory finance and their nexus which is formulated by theorizing the common thread of meaning through the axioms of participatory finance and Maqasid al Shari’ah at the interpretative level. This framework postulates that the participatory finance fits well in the ethos and the value system of Islam. Moreover, “social well-being” invariably provides the nexus between the Maqasid al Shari’ah and participatory finance.
Originality/value
This study contributes to the Islamic economics and finance literature by integrating the dissenting views from the divergent literature related to the basic philosophy of Shari’ah and participatory finance and provides grounds for policy implications, particularly, for designing the financial products. Moreover, it demonstrates an application of interpretative systematic review in Islamic banking and finance research.
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Mohammad Ashraful Ferdous Chowdhury, Mohammad Shoyeb, Chowdhury Akbar and Md. Nazrul Islam
The purpose of this study is to examine the effect of risk sharing and non-risk sharing instruments on both the profitability of Islamic banks and the economic growth of the…
Abstract
Purpose
The purpose of this study is to examine the effect of risk sharing and non-risk sharing instruments on both the profitability of Islamic banks and the economic growth of the country. This study also aims to improve the profit and loss sharing-based asset growth of Islamic banks.
Methodology/approach
The data for this study are obtained from the annual reports of all Islamic banks from Bangladesh using Bank scope database and annual report for the period of 1983–2014. The research uses Autoregressive Distributive Lag approach.
Findings
The findings reveal that risk sharing instruments are positively related to profitability and the economic growth of the country. This study also finds that non-risk sharing instruments play a predominant role in the profitability of the Islamic bank but are negatively related to the economic growth of the country.
Research implications
Banks and other financial institutions need to pay greater attention to systemic risk created by risk transfer and apply risk sharing methods of financing more vigorously than has hitherto been the case.
Originality/value
This study will also contribute to the literature as relatively few Islamic financial literatures deal with the relationship between equity financing and profitability which may make a strong contribution to the area of Islamic finance.
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Yousef Hassan, Rafiq Hijazi and Kamal Naser
The purpose of this paper is to examine the relation between audit committee (AC) and a set of other corporate governance mechanisms in one of the emerging economies, United Arab…
Abstract
Purpose
The purpose of this paper is to examine the relation between audit committee (AC) and a set of other corporate governance mechanisms in one of the emerging economies, United Arab of Emirates (UAE). In particular, the current study examines whether an effective AC can serve as a substitute or as a complement mechanism to board characteristics and ownership structure of Emirati listed non-financial companies.
Design/methodology/approach
Using substitution and complementary theories, a panel data from 48 nonfinancial companies listed on the UAE Stock Exchanges [Abu Dhabi Stock Exchange and Dubai Financial Market] during the period between 2011 and 2013 were used in the current study. A composite measure of four proxies has been used to measure the AC effectiveness, namely, AC size, independence, financial expertise and diligence. To test the hypotheses formulated for the study, a logistic regression model was used to identify the influence of a set of board characteristics and ownership structure variables on the effectiveness of the AC after controlling for firm size, auditor type, industry type and profitability.
Findings
While AC effectiveness appeared to be positively associated with board size and board independence, it is negatively associated with CEO duality. This points to a complementary governance relation. On the other hand, the negative relationship between AC effectiveness and each of institutional and government ownership suggests substitutive relations.
Research limitations/implications
The main shortcoming of the current study is that it examines the influence of a certain set of corporate governance factors on the effectiveness of AC. Other corporate governance mechanisms may, however, contribute to the effectiveness of AC. The findings of the study can be used by companies’ managements and regulators in the UAE to improve the corporate governance system.
Originality/value
To the best of researchers’ knowledge, this study provides the first evidence about the interaction among multiple governance mechanisms required by the code of corporate governance issued by the UAE Ministry of Economy in 2009. The current paper is expected to add to the limited AC literature in Middle East and North African countries in general and Arab World in particular.
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Muneer M. Alshater, M. Kabir Hassan, Ashraf Khan and Irum Saba
Islamic finance is an alternative approach of financial intermediation based on risk-sharing and asset-backed operations, which evolved substantially in recent years in academic…
Abstract
Purpose
Islamic finance is an alternative approach of financial intermediation based on risk-sharing and asset-backed operations, which evolved substantially in recent years in academic research raising the need for quantitative studies to address the intellectual development and scientific performance of this field. This study aims to provide quantitative statistics and comprehensive review of the key influential and intellectual structure of Islamic finance literature.
Design/methodology/approach
The authors apply the trending and cutting-edge quali-quantitative approach of bibliometric citation analysis. This study reviews 1,940 English studies and review papers published in scientific journals indexed by the Scopus database from 1983 to 2019. RStudio, VOSviewer and Excel’s software are used to analyze the collected data and apply the bibliometric tests.
Findings
The results identify the leading academic authors, journals, institutions and countries with relation to Islamic finance. The authors also propose six main research themes in this field, which are as follows: Islamic finance – fundamentals, growth and legitimacy; customer’s attitude and perception toward Islamic finance; accounting and social reporting of Islamic finance; performance and risk management of Islamic finance; Islamic financial markets; and efficiency of Islamic financial institutions. Lastly, the authors identify research gaps in the existing Islamic finance literature and present 24 future research directions.
Research limitations/implications
The data in this study is confined only to the Scopus database of English papers and reviews. It also considers papers directly related to the field of Islamic finance.
Originality/value
To the best of the authors’ knowledge, this paper is one of the first to address the literature of Islamic finance from a bibliometric aspect. The results of this study along with future research questions will help researchers and practitioners to further explore and stand on firm quantitative bases regarding the scientific development of Islamic finance.
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Shatha Qamhieh Hashem and Islam Abdeljawad
This chapter investigates the presence of a difference in the systemic risk level between Islamic and conventional banks in Bangladesh. The authors compare systemic resilience of…
Abstract
This chapter investigates the presence of a difference in the systemic risk level between Islamic and conventional banks in Bangladesh. The authors compare systemic resilience of three types of banks: fully fledged Islamic banks, purely conventional banks (CB), and CB with Islamic windows. The authors use the market-based systemic risk measures of marginal expected shortfall and systemic risk to identify which type is more vulnerable to a systemic event. The authors also use ΔCoVaR to identify which type contributes more to a systemic event. Using a sample of observations on 27 publicly traded banks operating over the 2005–2014 period, the authors find that CB is the least resilient sector to a systemic event, and is the one that has the highest contribution to systemic risk during crisis times.
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Gholam ali Tabarsa, Mohammad Olfat and Sajjad Shokouhyar
This study aims to investigate the influence of organizational members’ social use of social networking sites (SNSs) on employees’ destructive voice directly and considering the…
Abstract
Purpose
This study aims to investigate the influence of organizational members’ social use of social networking sites (SNSs) on employees’ destructive voice directly and considering the mediating role of job satisfaction and affective commitment to the organization.
Design/methodology/approach
In total, 240 employees of Asia-tech Company have participated in this study. To test the hypotheses, the researchers have used the partial least squares (PLS) method with the help of smart PLS software (version 2.0).
Findings
The results showed that organizational members’ social use of SNSs has a positive effect on destructive voice directly and considering job satisfaction as a mediator. However, social use of SNSs in the workplace considering the mediating role of affective commitment has a negative effect on destructive voice.
Practical/implications
The results of the study edify managers on how social use of SNSs in the workplace has paradoxical effects on destructive voice directly and regarding affective commitment as a mediating variable. Thus, the main contribution of this study is the fact that although social use of SNSs has many advantages such as promotion of job satisfaction and affective commitment in the workplace, it might have some detrimental effect such as reinforcement of destructive voice.
Originality/value
The model presented in this study is totally unique. Moreover, the investigations showed that there is no documented study regarding the examination of the effect of social use of SNSs on destructive voice directly and considering the mediating role of job satisfaction and affective commitment.
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Mohammad Ashraful Ferdous Chowdhury, Chowdhury Shahed Akbar and Mohammad Shoyeb
The purpose of this paper is to examine the linkage between Islamic financing principles and economic growth (EG) by taking into consideration two Islamic Financing Principles…
Abstract
Purpose
The purpose of this paper is to examine the linkage between Islamic financing principles and economic growth (EG) by taking into consideration two Islamic Financing Principles: Risk Sharing and non-risk sharing separately.
Design/methodology/approach
The data for this study are obtained from the annual reports of all Islamic banks from Bangladesh using Bank scope database and annual report for the period 1984-2014. The research uses an Autoregressive Distributive Lags (ARDL) approach. For robustness, this study also employs a continuous wavelet transform approach.
Findings
The empirical findings reveal that the risk sharing instruments are positively related to the EG of the country. On the other hand, non-risk sharing instruments are negatively related to the EG of the country.
Research limitations/implications
The dominant use of non-risk sharing-based financing has undermined the greater possibility of Islamic banking to contribute more to the EG of the country. Banks and other financial institutions need to pay greater attention to systemic risk created by risk transfer and apply risk sharing methods of financing more vigorously to achieve greater equity, efficient allocation of resources, stability and growth of the financial system and welfare of the society as a whole.
Originality/value
This study has advanced the knowledge by examining the issue of Islamic financing principles and EG. This is probably one of the first attempts to find the linkage between Islamic financing principles and EG by taking into consideration two portfolios: risk sharing and non-risk sharing separately and provide significant insights for policy makers, market players and academicians.
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Md. Mizanur Rahman, Mohammad Ashraful Ferdous Chowdhury, Md. Mahmudul Haque and Mamunur Rashid
Owing to religious and economic preferences in Muslim-dominated countries, middle-income customers are at the heart of banks’ strategic targeting. This study aims to investigate…
Abstract
Purpose
Owing to religious and economic preferences in Muslim-dominated countries, middle-income customers are at the heart of banks’ strategic targeting. This study aims to investigate selected middle-income Islamic bank customers from Sylhet, one of Bangladesh’s top religious and cultural cities, to examine their perceptions of the Islamic banking services.
Design/methodology/approach
This study forwards three determinants of overall satisfaction. These are perceived relative advantage (PRA), perceived risk management (PRM) and perceived customer engagement (PCE). The study has used structured questionnaire and collected complete data on 300 middle-income Islamic bank users. The data was analysed using exploratory factor analysis (EFA), confirmatory factor analysis (CFA) and structural equation modelling (SEM).
Findings
While all the three selection factors significantly influence overall satisfaction, PCE has greater positive impact on overall customer satisfaction, followed by PRA and PRM. “Convenient location”, “competitive charges” and “return on deposit despite low earnings” are the top three instruments measuring “PCE”. Religion did not qualify as a standalone selection factor. The results are robust across tests conducted by using EFA, CFA and SEM.
Practical implications
Gross purchasing power of middle-income class in Bangladesh grew from 7% to over 30% during the past decade, and the purchasing power of this class stood at US$100bn. Having a greater portion of this population as Muslims, banks can design products and marketing campaigns by using the three selection criteria that offer a combination of faith and non-faith-based variables.
Originality/value
Similar studies on the middle-income customer group have been rare, especially from the Islamic banking perspective. These findings offer a concise list of three factors for the bank managers to build their strategies. With respect to the Vision 2021, these findings carry greater socio-economic significance given the transition of Bangladesh to a middle-income country.
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Halil Zaim, Erdem Erzurum, Selim Zaim, Burhan Uluyol and Gökhan Seçgin
This study aims to propose a practical, virtue-centric model of leadership based on Islamic principles. The structure of the Islamic leadership construct is validated through…
Abstract
Purpose
This study aims to propose a practical, virtue-centric model of leadership based on Islamic principles. The structure of the Islamic leadership construct is validated through confirmatory factor analysis. Its relationship with performance and organizational commitment is examined and the mediating role of organizational commitment is assessed.
Design/methodology/approach
Islamic leadership model is tested using confirmatory factor analysis with data collected from employees working in the services sector in Turkey. Relationships between Islamic leadership, organizational commitment and performance are examined through a path analysis.
Findings
The factor analysis results presented a good fit for the proposed Islamic leadership model, which consists of wisdom, religiosity, justice and kindness dimensions. Regarding path analysis, findings indicated a positive relationship between Islamic leadership and job performance. Moreover, organizational commitment partially mediated the relationship between Islamic leadership and job performance.
Originality/value
Previous studies on Islamic leadership contain a very little number of empirical models. This study proposes a valuable empirical model of Islamic leadership consisting of moral values, spirituality, ethics and wisdom. In addition, the proposed model is supported with empirical pieces of evidence. Evidence of the partial mediating role of organizational commitment between Islamic leadership and job performance is also revealed by the study.