Journal of Islamic Monetary Economics and Finance (JIMF)
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Muslim Intention to Participate in Retail CWLS: The Test of Mediation and Moderation Effects
Get PDFCash Waqf-Linked Sukuk (CWLS), which integrates cash waqf instruments and sovereign Sukuk, is an innovative Islamic investment product with social and spiritual dimensions. This study investigates public intention to participate in Retail CWLS (SWR) using the Technology Acceptance Model (TAM) framework with the addition of other relevant constructs. An online survey was conducted using the purposive sampling technique and involved 130 respondents. The data were analysed using Partial Least Squares Structural Equation Modeling (PLS-SEM) supported by WarpPLS. The results indicate that Perceived Ease of Use (PEOU), Perceived Usefulness (PU), Perceived Transparency (PT), and Trust in the Indonesian Waqf Board and Waqf Institutions have a significant positive effect on individual Intention to participate in Retail CWLS. Furthermore, this study reveals that Trust could partially mediate the relationship between PU and individual Intention. However, Religiosity fails to moderate the relationship between PU and individual Intention to purchase SWR. The study also demonstrated other complementary statistical outputs such as split-sample, non-linear relationships among latent variables, effect size, and the Q-squared coefficient to ensure that the processed data were robust. Also, this finding indirectly implies that CWLS is not only targeted at the Muslim community but also for general investors from other religions and beliefs
Islamic, Green, and Conventional Cryptocurrency Market Efficiency During the COVID-19 Pandemic
Get PDFUnlike conventional cryptocurrencies, Islamic ones are new technologies backed by tangible assets and are characterised by their fundamental values. After the COVID-19 outbreak, cryptocurrency responses have shown different behaviour to stock market reactions. However, there is a lack of studies on the efficiency of Islamic and green cryptocurrencies during the pandemic. This paper attempts to analyse the behaviour of three typical families of cryptocurrencies (conventional, Islamic, and green) extracted according to their availability in daily frequencies during COVID-19. For this purpose, their efficiency levels are studied before and after the outbreak by employing multifractal detrended fluctuation analysis (MFDFA) to make the best predictions and strategies. The inefficiency of the cryptocurrencies is assessed through a magnitude of long-memory (MLM) efficiency index, and the impact of COVID-19 on their efficiency is evaluated. The primary results show that HelloGold was the most efficient market before the COVID-19 outbreak and that subsequently Ethereum has been the most efficient. In addition, the findings reveal that the cryptocurrency reactions are not similar and show more resilience in the Ethereum and Litecoin markets than in other cryptocurrency markets. The main contribution of this study is the evaluation of the impact of COVID-19 on the various classes of crypto money. This work has practical implications, as it provides new insights into trading opportunities and market reactions. Moreover, he work has theoretical implications based on its evaluation of three distinct models from different doctrine viewpoints
Islamic Regulations and Islamic Bank Margins: An Empirical Investigation into ASEAN Countries
Get PDFThis paper examines the impact of Islamic regulations on Islamic bank margins in ASEAN countries, utilising the fixed-effect method. The sample consists of 27 Islamic banks in Malaysia, Indonesia, Singapore and Thailand covering the period 2009 to 2017. The results suggest that Islamic regulations, such as the Islamic regulatory framework and Shari’ah supervisory board, are negatively associated with Islamic bank margins. These results have important policy implications for regulators, indicating that they should impose a separate regulatory framework for Islamic banks and bank managers to increase the number of Shari’ah scholars on the Shari’ah board in lowering Islamic bank margins. Overall, the findings suggest that Islamic banks should adopt regulations that should follow Shari’ah requirements, as they help to lower the cost of financial intermediation. As for the other control variables, only the Lerner index has a positive and significant impact on ASEAN Islamic bank's margin. Therefore, appropriate policies are necessary to foster competition in Islamic banks
Mark-Up vs. Interest-Based Financing on GDP: An Application of Agent-Based Computational Model
Get PDFThis study aims to introduce the application of artificial intelligence in the area of Islamic finance by examining the dynamic changes of gross domestic product (GDP) under fully markup-based financing. The application of artificial intelligence using agent-based computational model (ABM) is employed to conduct the simulation. The simulation result shows that the movement of GDP under markup-based financing which represents Islamic financial system has better performance compared to interest-based lending. In this regard, profit shared to depositors has positive impact on GDP which also proofs that Islamic banking system may promote sustainable economic growth and may create wealth for the whole society. This study proofs that Islamic bank essentially more stable than conventional bank and hence may fights against crisis. This study is potentially the initial work to examine the dynamic changes of economic growth under fully Islamic financial system by applying artificial intelligence concept as its methodology. Thus, this study is expected to contribute to the development of Islamic economics and finance research
The Regime Switching of Cycle Instability of Islamic Banking and the Economy: Evidence from Indonesia, Malaysia, and Pakistan
Get PDFThis study aims to examine the cyclical instability of Islamic banking in Indonesia, Malaysia, and Pakistan. A stable Islamic banking system can give the public confidence to conduct transactions and thus grow the economy. The proxy variable for stability used is the z-score, with 156 periods of research data from January 2007 to December 2019. The Markov Switching Vector Autoregression (MS-VAR) method was employed. The results show that Islamic banking stability in Indonesia based on the z-score is more stable than others. Nevertheless, in terms of the regression of all the variables, regime shifting, and the duration of the crisis, overall Malaysian Islamic banking displays the best performance. The instability of the Indonesian model is mostly affected by inflation, whereas Malaysia and Pakistan are affected by the financing to deposit ratio and the fluctuation in global oil, respectively
Multidimensional Risk and Religiosity Towards Indonesian Muslims’ Sharia Investment Decision
Get PDFThe decision-making process for Sharia investment needs to consider the individual’s risk tolerance since every type of investment is closely attached to the risk-return trade-off. This study examines whether multidimensional risk tolerance and religiosity influence Sharia investment decisions. The study used 300 potential Muslim investors in Indonesia as the primary data source through an online survey with a convenience sampling method and analysed the data using Partial Least Squares Structural Equation Modelling (PLS-SEM). The results show that three multidimensional risks (risk propensity, risk attitude and risk capacity) have a significant effect on the Sharia investment decision. The research also tested the moderating effect of religiosity levels by performing Multi-Group Analysis (MGA) and found significant differences between risk propensity and sharia investment decisions among moderate and devout religious individuals
Halal Awareness and Halal Traceability: Muslim Consumers’ and Entrepreneurs’ Perspectives
Get PDFThe objective of this paper is to analyse the role of halal awareness, employing variables that can be both influential (determinant) and influenced (output). The study examines two perspectives, namely those from consumers and business actors. From a consumer perspective, this relates to the influence of halal awareness on the intention to purchase a halal product. Meanwhile, from the perspective of business actors, it considers how halal awareness affects the halal traceability of products. Halal traceability is also analysed from the consumers’ perspective as a moderating variable in the relationship between halal awareness and consumer purchase intentions. Questionnaires were distributed online and data were collected from 176 consumers and 95 entrepreneurs. SEM-PLS was then applied to analyse the data. The results show that halal awareness influences the consumers’ purchase intention and the halal traceability of the business actors. While the consumers’ halal awareness was determined by knowledge and halal certification. In contrast, religiosity has an insignificant influence on the consumers’ halal awareness. Meanwhile, the halal awareness of the business actors was influenced by knowledge, halal certification and religiosity. Halal traceability failed to moderate the relationship between halal awareness and consumer purchase intentions
40-Year Bibliometric Analysis of Waqf: Its Current Status and Development, and Paths for Future Research
Get PDFWaqf (Islamic endowment) has received great attention from contemporary scholars, in line with the increasing attention being paid to social welfare. However, it is conceptually unclear, with no consensus having been reached among researchers on its current status. This study provides a brief overview of recent Waqf research developments, hence paving the way for future research. The research employs a bibliometric approach to analysing and summarising the trends and status quo in Waqf growth. Only articles written in English extracted from both the Web of Science and Scopus databases were considered for the study. The paper is an attempt to establish a solid conceptual base and to suggest directions for future research. The research provides a clear picture of the growth of Waqf, and indicates research gaps by reaching comprehensive conclusions about what has been achieved in the field. It hence opens new doors for scholars to develop innovative Waqf models to bridge socioeconomic issues. Our findings show that Indonesian and Malaysian scholars and their educational institutions have had a robust research commitment to the theme of Waqf during the last forty years. However, there is a lack of research on the countries where Waqf was first practised
Understanding the Factors Influencing Banking Customers’ Financial Asset Ownership
Get PDFThe objective of this study is to evaluate the factors which influence banking customers' financial asset ownership. Using the pyramid of Maslahah framework, the study classifies the needs of banking customers into four levels: those for basic financial services (hajjiyat); for financial assets for security or as a precaution (darruriyat); for financial assets for investment (tahsiniyah); and those for financial assets for religious purposes. To answer the research questions, a binomial logistic model was applied and the primary data were collected using a questionnaire survey with 300 respondents in Indonesia. It was found that the pattern of ownership of financial assets follows the order proposed in the theory of the pyramid of Maslahah. The study also found that financial asset ownership for transaction needs was mainly influenced by the variables of income and credit and that ownership of such assets for security or precautionary needs was largely determined by life cycle variables. In addition, ownership for investment needs was strongly influenced by the level of education, and for religious needs it was mainly determined by income levels and life cycle variables. The study findings provide important information for mapping the financial needs of Islamic banking customers.
ACKNOWLEDGMENT
This research was funded by the Department of Sharia Banking of the Indonesian Financial Services Authority under the Research Fellowship Program 2016.
Are Islamic Stocks Less Exposed to Sentiment-Based Mispricing Than Non-Islamic Ones? Evidence from the Indonesian Stock Exchange
Get PDFThe aim of this research is to verify the role of Islamic value in stock mispricing in the Indonesian capital market. Empirically, high investor sentiment can lead to mispricing on equity appraisal. When investors feel excessively optimistic about their valuation, equity will be overpriced, or vice versa. The presence of Islamic values, such as the prohibition of interest, speculative and uncertain transactions, and excessive leverage, arguably reduce sentiment-based mispricing. Daily and cross-sectional market data were employed. In addition, principal component analysis was conducted to construct a firm-specific investor sentiment variable. With regard to the method, the Hausman-Taylor (H-T) approach was used to deal with heterogeneity, endogeneity, and the time-invariant variable in Fama-MacBeth regression. The results show that our baseline analysis confirms the mispricing of overall stocks. However, Islamic stocks are less exposed to sentiment-based mispricing than their non-Islamic counterparts. The results are consistent with our robustness test, in which we estimate the equation model across industry and portfolio. Finally, our findings imply various insights for both investors and policymakers