Handbook of empirical research on Islam and economic life

782 Pages·2017·18.342 MB·English

by  Kabir Hassan (ed.)

HANDBOOK OF EMPIRICAL RESEARCH ON ISLAM

AND ECONOMIC LIFE
M. Kabir Hassan - 9781784710729
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Handbook of Empirical Research
on Islam and Economic Life
Edited by
M. Kabir Hassan
Professor, University of New Orleans, USA
Cheltenham, UK • Northampton, MA, USA
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© M. Kabir Hassan 2017
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or
transmitted in any form or by any means, electronic, mechanical or photocopying, recording, or
otherwise without the prior permission of the publisher.
Published by
Edward Elgar Publishing Limited
The Lypiatts
15 Lansdown Road
Cheltenham
Glos GL50 2JA
UK
Edward Elgar Publishing, Inc.
William Pratt House
9 Dewey Court
Northampton
Massachusetts 01060
USA
A catalogue record for this book
is available from the British Library
Library of Congress Control Number: 2016938613
This book is available electronically in the
Economics subject collection
DOI 10.4337/9781784710736
ISBN 978 1 78471 072 9 (cased)
ISBN 978 1 78471 073 6 (eBook)
Typeset by Servis Filmsetting Ltd, Stockport, Cheshire
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Contents
List of contributors ix
Foreword by Mervyn K. Lewis xxvii
Introduction: empirical research on Islam and economic life 1
M. Kabir Hassan
PART I RELIGION AND GROWTH
1 Social preferences and values: an experimental analysis for religiosity 23
Anwar Shah, Karim Khan and Hayat Khan
2 Openness, culture, legal environment and Islamic finance 47
Kaouthar Gazdar, Rihab Grassa and M. Kabir Hassan
3 Islamic finance in movement: public opinion in the Arab region 72
Clement Henry
PART II ISLAMIC SOCIAL FINANCE
4 Evaluating the impact of zakat by indicator of disaggregated Human
Development Index: an empirical finding 93
Mohammad Soleh Nurzaman
5 Poverty, finance and institutions: evidence from OIC countries 109
Muhammad Tariq Majeed
6 The social and cultural impact on firms’ access to finance in an Islamic
environment 135
Charilaos Mertzanis
7 Reporting of zakat and charitable activities in Islamic banks: theory and
practice in a multi- cultural setting 163
Mamunur Rashid, M. Kabir Hassan, How Shi Min and G.M. Wali Ullah
8 Achieving sustainable economic development through Islamic microfinance
and the potential of a proposed two- tier mudarabah waqf business model 193
Mohammad Ashraful Mobin and Abu Umar Faruq Ahmad
9 Can Islamic banking increase financial inclusion? 213
Sami Ben Naceur, Adolfo Barajas and Alexander Massara
10 Social tax and transfers for poverty alleviation: a case for low- and
middle-i ncome countries 253
Nasim Shah Shirazi and Muhammad Anas Zarka
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vi Handbook of empirical research on Islam and economic life
PART III ISLAMIC BANKING AND FINANCE
11 The impact of the global financial crisis on Islamic banking 275
Faisal Alqahtani and David G. Mayes
12 Country governance and the performance of Islamic and conventional banks:
international evidence 306
Fadzlan Sufian, M. Kabir Hassan, Fakarudin Kamarudin and
Annuar Md. Nassir
13 How institutions shape the gap in efficiency between Islamic and
conventional banks 332
Laurent Weill
14 Differences between Islamic and conventional finance in Malaysia 343
Olga Krasicka and Sylwia Nowak
15 On the co- existence of conventional and Islamic banks: do these banks differ
in business structure? 355
Sajjad Zaheer and Moazzam Farooq
16 Macroeconomic shocks and Islamic bank behavior in Turkey 375
Ahmet Faruk Aysan, Mustafa Disli, Adam Ng and Huseyin Ozturk
17 Explaining intermediation costs of Islamic banks in OIC countries 395
Nurhafiza Abdul Kader Malim, Mansor H. Ibrahim and
Mohamed Eskandar Shah Mohd Rasid
18 Liquidity risk management in emerging and Islamic markets in
post- financial crisis in the Gulf Cooperation Council 411
Mazin A.M. Al Janabi
19 How efficient are the commercial, investment and Islamic bank managers
in Jordan? 434
Ihsan Isik, Mohammed Omran and M. Kabir Hassan
PART IV ISLAMIC CAPITAL MARKET
20 Does Islamic investment accrue hedging benefits? 465
Dawood Ashraf and Mohsin Khawaja
21 Volatility forecasting, value- at- risk and expected shortfall estimations under
the Basel II Accord in GCC shariah stocks 485
Chaker Aloui, M. Kabir Hassan and Hela Ben Hamida
22 Do stock returns react to an Islamic label? 509
Raphie Hayat and Celia de Anca
23 Taking a leap of faith: are investors left short changed? 533
Yunieta A. Nainggolan, Janice C.Y. How and Peter Verhoeven
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Contents vii
24 Quantitative studies of Islamic and conventional assets 559
Shumi Akhtar and Maria Jahromi
25 Profit- sharing ratio as a screening device in venture capital 579
Meryem Mehri, Kaouther Jouaber- Snoussi and M. Kabir Hassan
26 On the dependency structure of Islamic assets 602
Mahmoud Bekri, M. Kabir Hassan and Nafis Alam
27 Malaysian investors’ perspectives on the integration and co- movement of
Islamic stock markets in developed and developing countries 624
Marjan Naseri, Syed Othman Alhabshi and Mansur Masih
28 A wavelet approach to timescale relationships among the Islamic and
conventional stock markets and LIBOR 657
AbdelKader O. el Alaoui, Ginanjar Dewandaru, Obiyathulla Bacha and
Mansur Masih
PART V SUKUK (ISLAMIC BONDS)
29 Testing the financial distress prediction model for sukuk- issuing companies
in Malaysia 687
Roslina Mohamad Shafi, Sharifah Raihan Syed Mohd Zain,
Mohamed Eskandar Shah Mohd Rasid and Ahamed Kameel Mydin Meera
30 The economic and political determinants of depth and strength in sukuk
markets 706
Mehmet Asutay and Ercument Aksak
Glossary of Arabic terms 731
Index 733
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Contributors
Abu Umar Faruq Ahmad is currently Associate Professor of Islamic Law of Transactions
and Jurisprudence at UBD School of Business and Economics, Universiti Brunei
Darussalam (UBD). Drawing from his unique expertise in both the theory and practice
of Islamic banking and finance, he has published extensively on different areas of his
specialization. He is also a regular speaker at international conferences in Asia, Europe,
Australia, America and Africa. He has a particular interest in sukuk (Islamic bonds)
takaful (mutual insurance) and retakaful (reinsurance) banking regulations, Sharī‘ah
compliance, and case studies of Islamic banks and financial institutions from legal and
regulatory perspectives. Dr Ahmad is serving as Founding Editor, Senior Editor, Co-
editor and Member of the International Editorial Board of many international journals
of repute. His research on the subject is the first landmark contribution to Australian
Islamic finance in terms of its regulation and the shariah compliance of its current
practice.
Shumi Akhtar is Senior Lecturer in Finance at the University of Sydney. She holds
Bachelor of Commerce, Master of Philosophy, Master of Higher Education and PhD
degrees from the Australian National University. Shumi’s research interests are broad,
and include corporate finance, asset pricing, welfare/retirement/superannuation/pension
systems, risk management, capital markets, multinationals, Islamic finance, market
efficiency, liquidity, behavioural finance, financial systems and higher education. Her
research publications have appeared in leading international and Australian peer-
reviewed journals. Dr Akhtar has received a number of competitive external research
grants, with total funding in excess of US$1.7 million. She currently holds an Australian
Research Council Discovery Early Career Research Award (ARC DECRA) Fellowship.
She is an active researcher and presents her work regularly at international and Australian
conferences including the American Finance Association Conference. A number of her
research papers received local and international prestigious awards. She has engaged in
invited research visits to several top US universities, including Harvard, Massachusetts
Institute of Technology (MIT) and Stanford among others. Shumi has 13 research papers
published in local and international refereed journals: Journal of Banking and Finance,
International Review of Finance, Pacific- Basin Finance Journal, Accounting and Finance
and Australian Journal of Management. Shumi has a broad teaching portfolio encom-
passing both undergraduate and postgraduate courses. She has taught seven different
undergraduate finance courses and six different postgraduate courses. She has super-
vised 35 Honours, Masters, MPhil and PhD students. She has been awarded the Vice-
Chancellor’s Award for Teaching Excellence and also the ‘Top Supervisor’ Award. She
also received a number of awards for her research work nationally and internationally.
Ercument Aksak is a Teaching and a Visiting Research Fellow at the Durham Centre
for Islamic Economics and Finance, Durham University. His main research interests
are: corporate risk management, capital structure and financing decisions, economic
ix
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x Handbook of empirical research on Islam and economic life
governance, macro finance and Islamic economics and finance. His research has been
presented at numerous international conferences and published in a number of books.
He teaches to Master’s students on various aspects of corporate finance, banking and
finance, statistics, econometrics and Islamic finance.
Nafis Alam works as an Associate Professor at the Nottingham University Business
School (NUBS) in the University of Nottingham Malaysia Campus (UNMC). Prior to
this, he was attached with Monash University at Sunway campus where he worked as
lecturer in finance. He has published extensively in the area of finance and his scholarly
research has featured in leading journals such as Emerging Markets Review, Pacific-
Basin Finance Journal, Journal of Asset Management, Journal of Banking Regulation and
Journal of Financial Services Marketing among others. He has co- authored three books
on Islamic finance, among them is Encyclopedia of Islamic Finance which is the first of
its kind and has sold over 1000 copies worldwide. He has also participated in leading
finance and Islamic finance conferences worldwide, among the most significant were par-
ticipation in Harvard Islamic Finance forum at Harvard Law School and Gulf Research
Meeting at Cambridge University, UK. Recently Dr Alam was featured as the Professor
of the Month by the Financial Times.
AbdelKader O. el Alaoui is a researcher in Islamic finance. He was a Research Fellow at
Durham Business School during 2014. He received his Master’s in Islamic finance from
the International Centre for Education in Islamic Finance (INCEIF) and has submitted
his thesis to complete soon his PhD in Islamic finance from the same university. He has
worked for a variety of corporations in different disciplines. He also has extensive experi-
ence as a consultant and served with the education ministry in France. He has written
many papers on Islamic finance, published chapters in books, delivered several seminars
in international conferences and has published in the Journal of International Financial
Markets, Institutions & Money. He is lecturing in Paris Dauphine University and the
International University of Rabat (UIR). AbdelKader lives in Paris, France.
Syed Othman Alhabshi is the Chief Academic Officer of INCEIF, a university dedicated
to only postgraduate studies in Islamic finance. He joined INCEIF in March 2007. He
holds a PhD in econometrics from the University of Birmingham, UK. Since 1969, he has
served in various academic capacities in four public universities in the country, namely,
Universiti of Malaya, Universiti Kebangsaan Malaysia, International Islamic University
Malaysia and Universiti Utara Malaysia. In October 1997, he served as the Founding
President and Chief Executive Officer (CEO) of Universiti Tun Abdul Razak until
March 2005, after serving the Institute of Islamic Understanding Malaysia (IKIM) as the
Deputy Director- General from 1992 to 1997. He served on various boards of directors,
including Maybank Islamic (2006–14), Etiqa takaful Berhad (1994–2013), Pak- Kuwait
Takaful Pte Ltd Pakistan (2005–14), and is still serving on the boards of University
Technical MARA, Prima Prai Sdn Bhd and the Institute of Islamic Understanding
Malaysia. He also served in shariah committees of Etiqa Takaful (2008–14), Malayasian
Nasional Reinsurance Berhad (2005–11) and currently still serves Labuan Reinurance
Limited, Singapore Unit Trusts Limited, Nomura Asset Management Malaysia and
Amanah Mutual Berhad. He has recently been appointed as a Member of the Advisory
Board for the recently established Dubai Centre for Islamic Banking and Finance. He
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