Asymmetric spillover effects of Covid-19 on the performance of the Islamic finance industry: A wave analysis and forecasting

Ghouse, Ghulam; Bhatti, M. Ishaq; Aslam, Aribah; Ahmad, Nawaz

doi:10.1016/j.jeca.2022.e00280

Cited by 16 publications

(7 citation statements)

References 29 publications

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“…Utilizing wavelets for analysis not only addresses the limitations of spectral analysis and the Fourier transform but also demonstrates effectiveness in handling time series data with varying characteristics, establishing itself as a proficient approach for time series analysis. In our study, we adhere to the conclusions drawn by Ghouse et al (2023), Mensi et al (2016) and Yang et al (2018). The distinctive characteristics of wavelets in their different representations include the father (ɸ) and mother (j) wavelets, which are delineated.…”

Section: Wavelet Analysismentioning

confidence: 60%

Examining Inflation Expectations within Asian Economies: Application of Wavelet Quantile Analysis towards Assessing Monetary Policy Credibility

Rehman,

Ghouse

2024

J. Econ. Impact

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The relevance of rational expectations has generated a renewed interest in assessing the accuracy of monetary policy declarations. Despite the enduring principles of the rational expectations theory, a remarkably dependable central bank can alleviate inflation by skillfully managing inflation expectations, thus avoiding adverse effects on employment. This paper explores the complex relationship between inflation expectations, target inflation rates, and the credibility of monetary policy, emphasizing the importance of rule compliance and transparent communication for establishing public confidence in central banks. While the estimation processes the study utilizes wavelet-based quantile regression by investigating data from 1990q1 to 2021q4, with variations across selected countries. The credibility index (CI) is employed to instrument the dependability of monetary policies. Nevertheless, the results of this study indicate that Policy credibility has a significant impact on inflation expectations in Bangladesh and Sri Lanka, underscoring the importance of clear communication and institutional reforms. Different outcomes in India and considerable effects in Pakistan underscore the necessity of customized policy measures and communication strategies to address inflation and promote economic stability in South Asia.

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Section: Wavelet Analysismentioning

confidence: 60%

Examining Inflation Expectations within Asian Economies: Application of Wavelet Quantile Analysis towards Assessing Monetary Policy Credibility

Rehman,

Ghouse

2024

J. Econ. Impact

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“…For example, Zhang et al (2023) find significant and greater spillovers among the clean energy, electricity, and energy metals markets under extreme quantile conditions, and obtain that COVID-19 is an important driver of spillover effects. Ghouse et al (2023) investigate the spillover effects of the waves of the COVID-19 pandemic that affected the performance of the Islamic financial sector in Pakistan, finding an asymmetric effect of the pandemic on the financial sector in each wave.…”

Section: Introductionmentioning

confidence: 99%

Realized volatility spillovers between energy and metal markets: a time-varying connectedness approach

Cunado,

Gabauer,

Gupta

2024

Financ Innov

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This paper analyzes the degree of dynamic connectedness between energy and metal commodity prices in the pre and post-COVID-19 era, using the time-varying parameter vector autoregressive connectedness approach of Antonakakis et al. (J Risk Financ Manag 13(4):84, 2020). The results suggest that market interconnectedness increased slightly following the outbreak of COVID-19, although this increase was lower and less persistent than that observed after the Global Financial Crisis of 2008. Furthermore, we find that crude oil was the main net transmitter of shocks before COVID-19 while heating oil, gold, and silver were the main net transmitters of shocks during the COVID-19 pandemic. In contrast, natural gas and palladium were the main net receivers of shocks during the entire sample period, making these two commodities attractive hedging and safe haven options for investors during the pandemic. Overall, our results suggest that hedging and diversification opportunities decrease during crises. Furthermore, they indicate that accurate forecasts of the volatility of several commodities, such as natural gas and different metals, can be obtained by exploiting the information content of crude oil. However, they also reveal that crude oil lost its leading position as a net shock transmitter during the COVID-19 pandemic.

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“…Exploring adaptation is important in times when Islamic finance markets are growing through new types of instruments and areas of markets (Hassan et al , 2022), requiring persistent adaptation and organizational learning to support the growth. Along with the opportunities for growth, Islamic financial institutions also need to combat emergent threats (Ghouse et al , 2023) by adapting to the new requirements. The adaptation, however, at times needs to be restricted through the established Shariah norms to migrate off the context instead of adapting (Ullah, 2014), as in such a situation, the social norms can protect from harmful movements in the market (Bhatti, 2019a; Bhatti and Basov, 2022) and avoid Shariah non-compliance risks (Bhatti, 2019b).…”

Section: Introductionmentioning

confidence: 99%

Organizational learning and adaptation in participatory Islamic finance

Nouman

Ullah

Jan

et al. 2023

QRFM

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Purpose Islamic banking has undergone significant adaption since its inception. This study aims to investigate why and how Islamic banks adapt their services, using participatory financing as evidence. Design/methodology/approach A qualitative study is designed, using working capital financing and commodity operations financing in Pakistan as analytical units. The data for each analytical unit is analyzed using a qualitative content analysis, while the findings are synthesized using a cross-case synthesis method. Findings Findings suggest that participatory financing has undergone extensive adaptation in the Islamic banking industry of Pakistan, in the wake of resolving constraints to participatory financing and increasing its viability. Consequently, participatory finance has emerged as an attractive and viable option in Pakistan. These findings suggest that unlike in the past, where Islamic banks used to buffer themselves from the environment and ignore the market demands, they have learned to respond effectively to the market demands and the challenges posed by the environment. Research limitations/implications Findings suggest that the adaptation strategy is more effective than the migration strategy, because it enables the financial service systems to reduce the underlying risks by avoiding emergent threats and eradicating the inherent weaknesses. Originality/value The extant literature provides a generalized view on the adaptation process that Islamic banks undergo to comply with their environment. However, it is limited in terms of conceptualizing the adaptations and innovations in their products and the underlying structural variations. The present study fills this gap.

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Asymmetric spillover effects of Covid-19 on the performance of the Islamic finance industry: A wave analysis and forecasting

Cited by 16 publications

References 29 publications

Examining Inflation Expectations within Asian Economies: Application of Wavelet Quantile Analysis towards Assessing Monetary Policy Credibility

Examining Inflation Expectations within Asian Economies: Application of Wavelet Quantile Analysis towards Assessing Monetary Policy Credibility

Realized volatility spillovers between energy and metal markets: a time-varying connectedness approach

Organizational learning and adaptation in participatory Islamic finance

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