Equity Capital, Profit Sharing Contracts, and Investment: Theory and Evidence

Bashir, Abdel-Hameed M.; Darrat, Ali F.; Suliman, Mohamed Osman

doi:10.1111/j.1468-5957.1993.tb00281.x

Cited by 24 publications

(12 citation statements)

References 9 publications

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“…According to this model, deposits are considered as shares (i.e., equity participation) and are thus entitled to dividends if the investment operates at a profit (Bashir et al 1993). Although demand deposits are not tradable, they are highly liquid by their very nature.…”

Section: Market Discipline In Islamic Banksmentioning

confidence: 99%

Islamic Banks, Deposit Insurance Reform, and Market Discipline: Evidence from a Natural Framework

et al. 2016

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Although it has been intensively claimed that Islamic banks are more subject to market discipline, the empirical literature is surprisingly mute on this topic. To fill this gap and to verify the conjecture that Islamic bank depositors are indeed able to monitor and discipline their banks, we use Turkey as a test setting. The theory of market discipline predicts that when excessive risk taking occurs, depositors will ask higher returns on their deposits or withdraw their funds. We look at the effect of the deposit insurance reform in which the dual deposit insurance was revised and all banks were put under the same deposit insurance company in December 2005. This gives us a natural experiment in which the effect of the reform can be compared for the treatment group (i.e., Islamic banks) and control group (i.e., conventional banks). We find that the deposit insurance reform has increased market discipline in the Turkish Islamic banking sector. This reform may have upset the sensitivities of the religiously inspired depositors, and perhaps more importantly it might have terminated the existing mutual supervision and support among Islamic banks.JEL codes: G23, G28, O52

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Section: Market Discipline In Islamic Banksmentioning

confidence: 99%

Islamic Banks, Deposit Insurance Reform, and Market Discipline: Evidence from a Natural Framework

et al. 2016

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“…The lack of complete data impeded any comprehensive analysis of the experiences of the last three decades. To date, empirical works done in this area of research has yielded inconclusive results (Bashir et al, 1993;Bashir, 1999). The Malaysian banking system has a unique setting, where conventional banks are allowed to offer Islamic banking and finance products along with the conventional products.…”

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confidence: 99%

The efficiency of Islamic banking industry in Malaysia

Sufian

2007

Humanomics

115

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Access to this document was granted through an Emerald subscription provided by NORTH CAROLINA STATE UNIVERSITY For Authors:If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service. Information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comWith over forty years' experience, Emerald Group Publishing is a leading independent publisher of global research with impact in business, society, public policy and education. In total, Emerald publishes over 275 journals and more than 130 book series, as well as an extensive range of online products and services. Emerald is both COUNTER 3 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -To examine the relative efficiency between the domestic and foreign banks Islamic banking operations in Malaysia. Design/methodology/approach -The paper utilises the Data Envelopment Analysis (DEA) methodology, which allows for the decomposition of technical efficiency into its pure technical and scale efficiency components. The authors further examined whether the domestic and foreign banks are drawn from the same population by performing a series of parametric and non-parametric tests. Finally, the authors attempt to investigate the consistency of the estimated DEA efficiency scores by examining its relationship with the traditional measures of banks performance. Findings -The results from the DEA suggest that Malaysian Islamic banks efficiency declined in year 2002 to recover slightly in years 2003 and 2004. The domestic Islamic banks were more efficient compared to the foreign Islamic banks albeit marginally. The source of inefficiency of Malaysian Islamic banks in general has been scale, suggesting that Malaysian Islamic banks have been operating at the wrong scale of operations. The results from the parametric and non-parametric tests further suggest that the foreign and domestic banks are drawn from the same population, as most of the test results could not reject the null hypothesis at the 0.05 levels of significance. The results from the correlation coefficients have further confirmed the dominance of scale in determining the technical efficiency of Malaysian Islamic banks. The results also suggest that profitability is significantly and positively correlated to all efficiency measures.Research limitations/implications -The paper can be extended to consider the production approach along with the intermediation approach, which has been applied in this paper. Investigation of changes in productivity over time as a result of technical change or technological progress or regress by employing the Malmquist Total Factor Productivity Index could yet be another extension to the paper. Originality/value -This paper provides ne...

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“…Islamic guidelines in dealing are considered capable of providing solutions to achieve justice and benefit between investors and business people. Some research that shows this can be found in studies conducted by Bashir et al (1993), Hasan & Siddiqui (1994), Hasan (2010), Khan (2015), and Tag el-Din (1992). Wolf et al (2018) even prove that the PLS scheme can be an alternative to long-term interest-based loans in developing countries.…”

Section: Visualization Of Network Co-word Mapsmentioning

confidence: 92%

Modeling Islamic Economics and Finance Research: A Bibliometric Analysis

Rusydiana¹,

Sanrego

Rahayu

2021

IJIEF

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This study aims to determine the development map of mathematic model in islamic economics and finance research that is indexed by Scopus and other reputable journal with the keyword "Mathematic model in islamic economics and finance". The data analyzed were 100 selected publications. The development map of mathematic model in islamic economics and finance research analyzed using the VOSviewer application program to find out the bibliometric map. The results showed that the number of publications on the development of mathematic model in islamic economics and finance research indexed Scopus from 1983-2019 experienced a significant increase and the most were published in Journal of King Abdulaziz University: Islamic Economics. Network visualization showed that the map of the development of mathematic model in islamic economics and finance research was divided into 3 clusters. The majority of research is related to modeling of Profit Loss Sharing (PLS) schemes. However, despite the development of using mathematical model in those researches, the approach tends to be adaptive (inductive) from conventional models that already exist. A challenge to review the mainstream model need to be further critically reviewed. Hence, it is necessary for researcher to formulate a mathematical model with a deductive approach that is reduced from Islamic norms or ethics derived from the Alquran and Sunnah.

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Equity Capital, Profit Sharing Contracts, and Investment: Theory and Evidence

Cited by 24 publications

References 9 publications

Islamic Banks, Deposit Insurance Reform, and Market Discipline: Evidence from a Natural Framework

Islamic Banks, Deposit Insurance Reform, and Market Discipline: Evidence from a Natural Framework

The efficiency of Islamic banking industry in Malaysia

Modeling Islamic Economics and Finance Research: A Bibliometric Analysis

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