International Journal of Islamic and Middle Eastern Finance and Management最新文献

{"title":"Economic growth and sustainable development: evidence from OIC countries","authors":"Inzamam Ul Haq, Chunhui Huo, Irum Saba","doi":"10.1108/imefm-06-2024-0284","DOIUrl":"https://doi.org/10.1108/imefm-06-2024-0284","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This paper aims to examine the dynamic relationship between economic growth and sustainable development, integrating the Environmental Kuznets Curve (EKC) in 22 Organization of Islamic Cooperation (OIC) member countries across income groups.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>Using annual data between 1990 and 2022, the authors apply the cross-correlation coefficient (CCC) approach of Narayan <em>et al.</em> (Economic Modeling, 2016, 53, 388–397) to examine the lead/lag relationship between GDP per capita and sustainable development. This study further validates the findings through a panel Granger causality test and a fixed panel regression model.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>This research provides evidence of a U-shaped EKC for only 1 out of 22 (5%) OIC countries. For 13 out of the 22 (59%) OIC countries, increasing income growth is expected to enhance sustainable development in the future. The results show that as income levels rise, there will be a more significant decline in sustainable development for high-income OIC countries in the future than for both middle-income groups, contradicting the EKC hypothesis. The findings from the panel Granger causality and panel regression models also support the CCC results.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This study proposes a reverse version of the EKC hypothesis and contributes to the literature on economic growth and environmental sustainability. With increasing economic growth, the results can assist OIC member governments and policy-makers in designing tailored policies and practical measures for future sustainable development.</p><!--/ Abstract__block -->","PeriodicalId":47091,"journal":{"name":"International Journal of Islamic and Middle Eastern Finance and Management","volume":"18 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2024-09-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142256606","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Economical rights versus God’s rights: criticising of the implementation Shariah economic in Indonesia","authors":"Muhammad Syauqi Bin-Armia, Muhammad Siddiq Armia, Muhammad Fazlurrahman Syarif","doi":"10.1108/imefm-01-2024-0054","DOIUrl":"https://doi.org/10.1108/imefm-01-2024-0054","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to evaluate the impact of Law No. 11 of 2018 on Islamic Financial Institutions in Aceh, Indonesia. It also aims to understand the balance between the economic rights of individuals under Shariah law and the broader concept of God’s rights, as interpreted by this legislation. In addition, the research argues that the implementation of Law No. 11 of 2018 is untimely, with a focus on examining its influence on the cumulative abnormal return (CAR) of Shariah banks and its slight contribution to the direct economic impact.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>This study adopts a mixed-methods approach that integrates qualitative and quantitative analyses. The qualitative aspect uses a black-letter law approach for legislative scrutiny, whereas the quantitative aspect assesses economic indicators and firm performance using an event study analysis. The study also includes a two-tailed assessment to test hypotheses related to the law’s direct impact on institutional performance.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The study reveals that Law No. 11 of 2018 had minimal impact on national-scale corporate performance and a notable increase in poverty indices in Aceh, indicating a potential misalignment between the law’s intention and its economic consequences. The results also show the law’s ineffectiveness in significantly influencing the CAR of Islamic banks, highlighting a clash of norms and a lack of substantial economic substance in the implementation of Shariah compliance.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>This research is geographically and legally focused on Aceh, Indonesia, with a short-term analysis that may not fully capture the long-term impacts. It primarily considers the stock price performance of specific institutions for quantitative analysis and identifies potential clashes and disharmony-in-law implementation from a qualitative perspective.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>The findings suggest the need for legal frameworks that better comply Shariah principles with economic realities. Regional governments should consider modifying policies to balance religious values and economic objectives.</p><!--/ Abstract__block -->\u0000<h3>Social implications</h3>\u0000<p>This research highlights the importance of balancing religious obligations with economic rights, indicating that strict interpretations of religious law can lead to adverse socioeconomic effects.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This study is unique in its comprehensive analysis of the convergence between religious law and economic rights, offering insights into the challenges faced in implementing Shariah-based economic policies in diverse economies, such as Indonesia.</p><!--/ Abstract__block -->","PeriodicalId":47091,"journal":{"name":"International Journal of Islamic and Middle Eastern Finance and Management","volume":"21 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2024-09-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142202967","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Does diversity in top management and boards affect ESG performance? Evidence from Islamic and conventional banks in the MENA region","authors":"Mustafa Raza Rabbani, Madiha Kiran, Abul Bashar Bhuiyan, Ahmad Al-Hiyari","doi":"10.1108/imefm-06-2024-0281","DOIUrl":"https://doi.org/10.1108/imefm-06-2024-0281","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to investigate the impact of gender diversity in top management teams and boards on environmental, social and governance (ESG) performance. The authors propose a corporate social responsibility (CSR) committee as a moderating variable in this relationship, drawing on resource dependence and legitimacy theories. This study is crucial in understanding the dynamics of gender diversity and its impact on ESG performance in the banking sector.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The study examines a sample of Islamic and conventional banks from 10 Middle Eastern and North African countries during 2008–2022. Initial analysis was conducted using fixed effects panel regression, whereas the robustness test used the generalized method of movement dynamic system.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The findings, which are significant for both conventional and Islamic banks, indicate that female directors are crucial in promoting ESG performance in conventional banks. In contrast, female executives do not appear to contribute significantly. However, for Islamic banks, neither board nor executive gender diversity significantly affects ESG performance. Moreover, the find that the positive moderating role of the CSR committee is significant only for the nexus between board gender diversity and conventional banks’ ESG performance and for the connection between executive gender diversity and Islamic banks’ ESG performance.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>Despite the widespread belief that gender diversity in top management teams is pivotal in promoting ESG performance, empirical studies supporting these claims are scarce, particularly in the banking sector. The study, therefore, brings a novel perspective to this discourse. These findings have the potential to significantly assist stakeholders in evaluating how gender diversity in top management teams influences banks’ sustainability practices, thereby empowering them to make more informed and impactful investment decisions.</p><!--/ Abstract__block -->","PeriodicalId":47091,"journal":{"name":"International Journal of Islamic and Middle Eastern Finance and Management","volume":"167 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2024-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142202965","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Exploring the stock market development and sustainable development nexus: insights from emerging market economies","authors":"Yilmaz Bayar, Valentin Toader, Marius Dan Gavriletea, Oguzhan Yelkesen","doi":"10.1108/imefm-03-2024-0136","DOIUrl":"https://doi.org/10.1108/imefm-03-2024-0136","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>Sustainable development is considered a key factor in addressing environmental issues, global inequalities and poverty. This study aims to investigate the impact of stock market indicators on sustainable development across 16 emerging markets from 2003 to 2020.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The research uses causality and cointegration analyses to explore the relationships between stock market indicators and sustainable development.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>Univariate causality analysis reveals a bidirectional causal relationship between the stock market turnover ratio and sustainable development, as well as a unidirectional relationship from sustainable development to stock market capitalization and total value traded. Panel-level cointegration analysis suggests that only stock market capitalization has a weak positive influence on sustainable development. However, the impact of stock market indicators on sustainable development varies significantly among countries, as revealed by country-level cointegration analysis.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>While this study provides valuable insights, it is not without limitations. The findings are limited to the selected emerging markets and the specified timeframe (2003–2020). The complexity of factors influencing sustainable development suggests the need for further exploration in diverse contexts.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>Understanding the nuanced relationships between stock market indicators and sustainable development can offer valuable insights for policymakers, investors and stakeholders.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This research contributes to the existing literature by examining the multifaceted connections between stock market indicators and sustainable development, focusing on country-specific causality relationships. The study highlights the reciprocal nature of this relationship, where financial market development can both influence and be influenced by a country's progress toward sustainability. This approach provides a more nuanced understanding of the complex interaction between stock market maturity and sustainability goals.</p><!--/ Abstract__block -->","PeriodicalId":47091,"journal":{"name":"International Journal of Islamic and Middle Eastern Finance and Management","volume":"315 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2024-09-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142226061","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The new legalities of Islamic contractual interpretation: institutional frameworks and the displacement of intention","authors":"Jonathan G. Ercanbrack, Ali Ali","doi":"10.1108/imefm-03-2024-0156","DOIUrl":"https://doi.org/10.1108/imefm-03-2024-0156","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to examine the extent to which traditional juristic approaches to determining intention in Islamic law are altered in the institutional framework and standard-setting project of the Malaysian state.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The study used the transnational law theory, which views normativity as culturally, socially and religiously embedded. The development of norms, customs and laws is also contingent on self-maximizing behavior. The Sharīʿa Advisory Council’s interpretation of the bayʿ al-ʿīnah standard is a case study of this approach to the development of law.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>This study shows that traditional approaches to determining the validity of an Islamic contract have been displaced by the institutional logic of the state, which prioritizes uniformity and certainty in law and reflects liberal, Western and capitalistic values. Islamic standard setting is part of the state’s objective to uniformize law due to the globalization of financial markets. The normative collisions in the standard-setting project produce a new jurisprudence based on the state’s uniform and purposive determination of a contract’s validity.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>Further research on institutional frameworks is needed to conceptualize how Islamic commercial principles and ethics can be incentivized in the state’s legal systems.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>Few works, if any, have examined the interaction of the state’s institutional environment with jurists’ traditional approaches to determining contractual intention. Most scholarship assumes the decisive role of market forces, but the role of law and institutions in this context is under-researched.</p><!--/ Abstract__block -->","PeriodicalId":47091,"journal":{"name":"International Journal of Islamic and Middle Eastern Finance and Management","volume":"5 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2024-09-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142202995","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"A proposed model for Zakah on financial instruments: accounting approach","authors":"Muhannad Ahmad Atmeh, Bassam Mohammad Maali, Usama Fendi","doi":"10.1108/imefm-01-2024-0055","DOIUrl":"https://doi.org/10.1108/imefm-01-2024-0055","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This paper aims to propose a model of Zakah treatment for financial instruments. The model depends on the link between the financial assets and liabilities that emerge from a financial instrument contract.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The determination of Zakah on contemporary financial instruments is controversial, with various conflicting Fatwas being presented. This paper introduces a theoretical model that integrates Fiqh rules, accounting, finance and economic principles to propose a method for calculating Zakah on financial instruments. This theoretical model can be the foundation for future empirical and statistical testing.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The proposed model advocates omitting the financial assets/liabilities when determining the Zakah base for companies, as the Zakah burden relies on the owner of the real asset. The paper elaborates on the implementation of the model on debts, investments and cash accounts.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>The paper does not investigate whether or not the accounting approach in dealing with financial contracts is deemed acceptable by Fiqh scholars, nor does it discuss whether or not this may affect the Zakah fatwas regarding these types of accounts.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>The paper establishes a conceptual framework for the Zakah on financial assets. This will pave the way for future empirical research and testing to validate the framework in different contexts. In addition, if regulators adopt this model and apply it to all companies, it would promote fairness and justice at the national level.</p><!--/ Abstract__block -->\u0000<h3>Social implications</h3>\u0000<p>The proposed model advocates omitting the financial assets/liabilities when determining the Zakah base for companies, as the Zakah burden relies on the owner of the real asset. The paper elaborates on the implementation of the model on debts, investments and cash accounts.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>To the best of the authors’ knowledge, this is the first attempt to utilize the accounting approach in order to determine the amount of Zakah.</p><!--/ Abstract__block -->","PeriodicalId":47091,"journal":{"name":"International Journal of Islamic and Middle Eastern Finance and Management","volume":"10 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2024-09-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142202968","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Investigating the role of Fintech innovations and green finance toward sustainable economic development: a bibliometric analysis","authors":"Bakir Illahi Dar, Nemer Badwan, Jatinder Kumar","doi":"10.1108/imefm-01-2024-0018","DOIUrl":"https://doi.org/10.1108/imefm-01-2024-0018","url":null,"abstract":"&lt;h3&gt;Purpose&lt;/h3&gt;\u0000&lt;p&gt;The purpose of this study is to present a bibliometric and network analysis that uses the Scopus and Dimension databases to provide new insights into the progression toward the study of sustainable economic development.&lt;/p&gt;&lt;!--/ Abstract__block --&gt;\u0000&lt;h3&gt;Design/methodology/approach&lt;/h3&gt;\u0000&lt;p&gt;This analysis has been drawn on 665 papers published between 2015 and 2023. Bibliometric analysis characterizes a research topic by identifying leading nations, the most significant authors and expressive publications. Network analysis revealed keyword evolution over time, co-citation patterns and study grouping. Content analysis was used to identify major topic in the discipline, with a focus on their interrelationships. Each publication in the data set is briefly described, along with its methodological approach.&lt;/p&gt;&lt;!--/ Abstract__block --&gt;\u0000&lt;h3&gt;Findings&lt;/h3&gt;\u0000&lt;p&gt;The results of this study show that green finance plays a major role in long-term economic growth, having a significant influence on the preservation of environmental quality, economic efficacy and a more comprehensive economic system. Financial technology also accelerates the transition to a carbon-neutral economy by enhancing the beneficial effects of green finance on aspects of the economic system and environmental conservation.&lt;/p&gt;&lt;!--/ Abstract__block --&gt;\u0000&lt;h3&gt;Research limitations/implications&lt;/h3&gt;\u0000&lt;p&gt;The investigation is based only on Scopus and Dimensions-indexed journal articles. However, additional studies should incorporate publications from other reputable databases, such as Web of Science, PubMed and Science Direct, for the bibliometric analysis, so that the findings of the model analysis become more reliable and valid with examination of more documents. The visualization of similarity viewer was used for data analysis in the study, there is a scope for using other tools such as Biblioshiney and CitNet Explorer.&lt;/p&gt;&lt;!--/ Abstract__block --&gt;\u0000&lt;h3&gt;Practical implications&lt;/h3&gt;\u0000&lt;p&gt;To support long-term economic growth, authorities should encourage Fintech companies to actively participate in various green finance initiatives and environmental conservation businesses. Financial managers should facilitate the integration of technology and green finance for financial services. It is important to encourage institutional and individual investors alike to look into more environmentally friendly ways to invest and save money. Policymakers should provide a platform for global awareness and government agencies should enhance their recommendations to state governments to increase the efficacy of green finance.&lt;/p&gt;&lt;!--/ Abstract__block --&gt;\u0000&lt;h3&gt;Originality/value&lt;/h3&gt;\u0000&lt;p&gt;This study contributes to the literature by investigating the relationship between Fintech and green financing. This study holds significance for financial intermediaries, industrialists, investors and policymakers by providing insights into the integration of Fintech with green finance for sustainable development. These find","PeriodicalId":47091,"journal":{"name":"International Journal of Islamic and Middle Eastern Finance and Management","volume":"61 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2024-09-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142226060","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"An insight into the signaling role of Sharia status: a case from an emerging IPO market","authors":"Ali Albada","doi":"10.1108/imefm-08-2023-0290","DOIUrl":"https://doi.org/10.1108/imefm-08-2023-0290","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to examine the potential of Sharia status as ex ante information to signal the quality of an issuing firm by improving the decision-making process of potential investors when assessing initial public offerings (IPOs) in an environment where information asymmetry is pronounced. Potential investors face challenges in evaluating and determining the true value of IPO issues, which inherently influences their decision-making. Consequently, this results in pronounced price fluctuations in IPO shares, leading to higher underpricing.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>This study uses a sample of 350 IPOs listed on the Kuala Lumpur Stock Exchange (KLSE) between 2004 and 2021 to examine the signaling role of Sharia-compliance status. A three-model approach is used to ensure that the study's objectives are met. The first model investigates the effect of Sharia status on underpricing to determine whether the main beneficiary of such a signal is the investor or the issuer. The second model examines the effect of Sharia status on investor demand to determine if such a signal influences prospective investors' investment decision-making processes. The third model inspects the effect of Sharia status on investor divergence of beliefs to measure the signal's ability to reduce information asymmetry within the Malaysian IPO market.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The Malaysian IPO market relies heavily on the fixed-price mechanism, which exacerbates high information asymmetry, affecting potential investors' behavior, asset price formation and return generation on the first day of listing. The study results indicate that Sharia status does not have any signaling role in the Malaysian IPO market. This is because investors in the Malaysian market are driven by ex ante information that helps unveil relevant information that leads to capital gains. Furthermore, most new issues in the Malaysian IPO market fall under Sharia status, diluting the relevance of such information for prospective investors in determining profitable investments.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>The findings highlight the challenges faced by issuing firms in estimating market demand due to limited premarket insights and the difficulties prospective investors face in identifying the quality of issuing firms. Efforts to provide more information on investor demand can reduce uncertainty and facilitate more informed decision-making.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This research stands as one of the pioneering efforts to provide an empirical explanation of the potential signaling influence of Sharia status in an emerging IPO market.</p><!--/ Abstract__block -->","PeriodicalId":47091,"journal":{"name":"International Journal of Islamic and Middle Eastern Finance and Management","volume":"27 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2024-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142202994","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Sustainable and responsible investment (SRI) Sukuk: lessons from Khazanah’s Sukuk Ihsan","authors":"Ziyaad Mahomed, Azmy Mahbot","doi":"10.1108/imefm-05-2024-0219","DOIUrl":"https://doi.org/10.1108/imefm-05-2024-0219","url":null,"abstract":"&lt;h3&gt;Purpose&lt;/h3&gt;\u0000&lt;p&gt;SRI Sukuk, with its outcome-based emphasis, aims to align the Islamic finance industry with its original ideals and address criticisms related to form over substance. In Malaysia, while the pioneering Sukuk Ihsan was a “social” sukuk, recent SRI Sukuk issuances have predominantly been “green” or “sustainable” sukuk. This paper aims to evaluate the Malaysian SRI Sukuk market, identifying factors favouring “green” sukuk. It also examines whether structural issues in Sukuk Ihsan deterred subsequent issuers from “social” sukuk. The emergence of SRI Sukuk responds to sustainable development goals and the shift towards a low-carbon economy. Sukuk Ihsan, as the first &lt;em&gt;Shariah&lt;/em&gt;-compliant pay-for-success structure, poses complexity and risk management challenges to meet performance criteria.&lt;/p&gt;&lt;!--/ Abstract__block --&gt;\u0000&lt;h3&gt;Design/methodology/approach&lt;/h3&gt;\u0000&lt;p&gt;The study used a qualitative method in the form of a critical review of literature, interview sessions with experts and stakeholders who are familiar with SRI Sukuk and Sukuk Ihsan and a case study analysis of Sukuk Ihsan.&lt;/p&gt;&lt;!--/ Abstract__block --&gt;\u0000&lt;h3&gt;Findings&lt;/h3&gt;\u0000&lt;p&gt;The popularity of “green” sukuk reflects the growing global environmental consciousness. The main factors driving the popularity of “green” sukuk are the maturity of the market and the existence of a strong supporting infrastructure for “green” issuances while the positive profiling benefits and availability of incentives for “green” issuances also contribute to a lesser extent. The recommendations include the promotion of “social” sukuk by regulators through a focus on establishing a similar supporting infrastructure for “social” sukuk as there are for SRI and standard Sukuk. In addition, issuers of “social” sukuk may want to reconsider the inclusion of key performance indicators (“KPI”) into the structure of future “social” sukuk issuances.&lt;/p&gt;&lt;!--/ Abstract__block --&gt;\u0000&lt;h3&gt;Research limitations/implications&lt;/h3&gt;\u0000&lt;p&gt;Although all respondents considered Sukuk Ihsan to be a success, some potential areas of improvement were also noted. These include the structuring of future “social” sukuk issuances with a bigger discount to compensate for the additional risk being assumed by the investor; the need to be more careful in the KPI selection process; and one respondent even went so far as to suggest the possibility of totally removing the step-down feature of Sukuk Ihsan.&lt;/p&gt;&lt;!--/ Abstract__block --&gt;\u0000&lt;h3&gt;Practical implications&lt;/h3&gt;\u0000&lt;p&gt;Industry implications of Sukuk Ihsan study include findings that require balancing disclosure and economics by providing additional disclosure requirements for SRI Sukuk that may pose risks without corresponding benefits for issuers. KPI selection and investor confidence should also be properly identified, as KPIs are essential for the pay-for-success model to work successfully. For sukuk holders, findings indicate that any approval for waivers during issuance can impact investor con","PeriodicalId":47091,"journal":{"name":"International Journal of Islamic and Middle Eastern Finance and Management","volume":"20 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2024-08-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142202996","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Application of tàawun (mutual assistance) in cross-subsidisation of surplus among different takaful operators: an exploratory study in Malaysia","authors":"Md. Habibur Rahman, Md. Faruk Abdullah, Noor Mohammad Osmani, Nur Suhailah Zakiyyah Binti Aziz","doi":"10.1108/imefm-12-2023-0479","DOIUrl":"https://doi.org/10.1108/imefm-12-2023-0479","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to investigate the possibility of practicing cross-subsidisation of underwriting surplus among different takaful operators. It responds to the recent discussion paper published by Bank Negara Malaysia (BNM) on broader application of tàawun (mutual assistance), which seeks insights into cross-tàawun of underwriting surplus within takaful industry.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>A qualitative, semi-structured interview is used to gather primary data, featuring 13 one-to-one interviews with selected Sharìah and operational experts in takaful. Open-ended questions are drafted according to BNM’s discussion paper to guide the interview. A content analysis method is used to delve into the topic based on scholarly papers, books and regulatory guidelines. A thematic analysis is applied to explore the qualitative data.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>This study establishes the feasibility of cross-subsidisation of underwriting surplus in takaful. Given that participants are the rightful owners of the underwriting surplus, cross-tàawun is deemed permissible with participants’ consent. With the view that underwriting surplus belongs to the fund due to outright transfer of contributions by participants, the regulators have discretion to permit cross-tàawun. The authorities can make any decision if it serves the public interest. Furthermore, the study provides Sharìah and regulatory requirements to govern the practice of cross-tàawun in takaful. Respondents of the study advocate for policy reviews and regulatory adjustments to facilitate cross-subsidisation of takaful surplus.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>This study significantly contributes to the existing body of knowledge in Islamic insurance studies. It offers valuable insights for the regulators to formulate the required policies and guides takaful operators to develop products accordingly. Moreover, the study supports Sharìah scholars in making informed decisions about cross-tàawun practices.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This study fills a critical gap in the existing literature by being the first to examine cross-subsidisation of underwriting surplus in takaful. The proposed cross-subsidisation of underwriting surplus will enhance sustainability of takaful funds and contribute to stability of takaful industry. As a foundation, this study encourages future research to explore other relevant aspects of cross-subsidisation of underwriting surplus in takaful operation.</p><!--/ Abstract__block -->","PeriodicalId":47091,"journal":{"name":"International Journal of Islamic and Middle Eastern Finance and Management","volume":"38 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2024-08-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142226197","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}