Do Islamic banks gain from corruption and money laundering (ML)?

Aish, Kinza; Hassan, M. Kabir; Zaman, Qamar Uz; Ehsan, Sadaf; Abbas, Khurram; Shah, Ijaz Hussain

doi:10.1108/jmlc-09-2021-0094

Cited by 5 publications

(1 citation statement)

References 32 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Empirical studies investigating the role of corruption on bank profitability Aish et al (2021) These studies report that firm-specific, industrial-specific and the macroeconomic variables are significant determinants of bank profitability (Garcia & Guerreiro, 2016;Tan & Floros, 2012). Recently, studies have also accounted the roles of corruption on bank activities (Arshad et al, 2013;Chen, 2017).…”

Section: Corruption and Firm Performancementioning

confidence: 99%

The Effect of Corruption and Money Laundering on Banking Profitability and Stability of Licensed Commercial Banks in Sri Lanka

Hendeniya,

Premarathna,

Tennekoon

2023

J. Bus. Technol.

View full text Add to dashboard Cite

This study investigated the impact of corruption and money laundering on banking profitability and stability of licensed commercial banks in Sri Lanka, by using the panel data of 24 licensed commercial banks from 2015-2021 in Sri Lanka. The data for this study was collected from secondary data sources. In the study, corruption and money laundering data were obtained from Transparency International and Basel Institute of Governance, respectively. The analysis of the study followed the multiple regression analysis. Further, this study used fixed effect and random effect regression techniques for analyzing the data. The result of the study found evidence consistent with previous studies indicating that corruption has a negative and money laundering has a positive relationship with the banking profitability. Further, this paper also found that bank size and management efficiency also have positive impact on banking profitability and stability. Based on the findings of the study Government can take necessary actions to uplift the knowledge of Corruption and Money Laundering in accordance with the findings of this research. Moreover, findings of this study will be useful for future researchers to enhance their knowledge on this area of study.

show abstract

Section: Corruption and Firm Performancementioning

confidence: 99%

The Effect of Corruption and Money Laundering on Banking Profitability and Stability of Licensed Commercial Banks in Sri Lanka

Hendeniya,

Premarathna,

Tennekoon

2023

J. Bus. Technol.

View full text Add to dashboard Cite

show abstract

Nexus of liquidity creation, profitability and bank stability with the moderating role of corruption: an empirical analysis

Javid,

Chandia,

Zaman Malik

2023

JFC

View full text Add to dashboard Cite

Purpose This study aims to investigate the impact of liquidity creation (LC) on the profitability and stability of banks while considering the moderating role of corruption. Design/methodology/approach Panel data from 23 conventional banks and five Islamic banks in Pakistan spanning from 2008 to 2021 were used for analysis. The study used fixed effect and random effect models, along with the generalized method of moments estimation to ensure robustness of the results. Findings The study reveals a negative relationship between LC and banking profitability, but a positive association with banking stability. Additionally, corruption is found to play a moderating role in the relationship between LC, profitability and stability in the banking sector of Pakistan. Research limitations/implications The findings have practical implications for bank managers and investors, emphasizing the negative relationship between LC and profitability in Pakistan. Moreover, the study highlights the significant impact of corruption on bank performance, which can guide policymakers in formulating strategies to strengthen the banking sector and prevent financial turmoil in the future. Originality/value This study makes a significant contribution to the existing literature by examining the moderating role of corruption in the relationship between LC, profitability and stability in both conventional and Islamic banks.

show abstract

The impact of corruption and Islamicity on bank stability and profitability: assessing the moderating effect in dual banking systems

Akbar,

Ur Rehman,

Ijaz

2024

JIABR

View full text Add to dashboard Cite

Purpose This paper aims to examine the impact of corruption on bank stability and bank profitability separately for Islamic banks as well as conventional banks. Moreover, it also investigates whether the existence of Islamicity and corruption in the environment can moderate the Islamic banks-stability and Islamic banks-profitability relationships. Design/methodology/approach Sample of the study consists 136 banks comprising 70 Islamic and 66 conventional banks over the period 2015–2021 from nine countries with dual banking systems. Panel data fixed effect estimator with year effects is used to estimate the results. Findings Results of the study show that Islamicity is positively and corruption is negatively related to bank stability as well as bank profitability. Further, it is found that the effect of corruption is significantly different between Islamic and conventional banks, wherein conventional banks are more adversely affected than Islamic banks. However, an insignificant difference between Islamic and conventional banks is observed in the case of Islamicity. Practical implications The study provides theoretical and practical implications. On theoretical side, the study presents Islamicity as more reliable measure of religiosity based on Islamic values that can help in control of corruption by moderating corruption-bank stability nexus especially in dual banking economies which have high share of Muslim population. On practical side, the study recommends policy and operational measures for mitigating corruption aiming bank stability. Originality/value The results of this study contribute to the corruption-finance, religion-finance and dual banking literature. This study suggests that regulators and bank management must consider corruption and Islamicity while formulating their policies for better bank performance/stability.

show abstract

Do Islamic banks gain from corruption and money laundering (ML)?

Cited by 5 publications

References 32 publications

The Effect of Corruption and Money Laundering on Banking Profitability and Stability of Licensed Commercial Banks in Sri Lanka

The Effect of Corruption and Money Laundering on Banking Profitability and Stability of Licensed Commercial Banks in Sri Lanka

Nexus of liquidity creation, profitability and bank stability with the moderating role of corruption: an empirical analysis

The impact of corruption and Islamicity on bank stability and profitability: assessing the moderating effect in dual banking systems

Contact Info

Product

Resources

About