INCEIF Knowledge Repository (INCEIF University)
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Wealth as understood in economics and finance
No full textContemporary economic thoughts equate capital, as mentioned in the above quote, to be wealth, which, as stated in the quote, is the accumulation of things of value from the continuous efforts of humans. Wealth is owned in different proportions by individuals, entities and the state. Wealth can be defined broadly as an item that has some economic substance, a value such that the wealth can be used for several intended purposes, in modern economics, for consumption as theoretically glorified by the Utility Maximization Theorem (Arrow-Debreu). As the great philosopher - economist Adam Smith said, wealth is from the efforts of humans to better the human condition, which then eventually leads to wealth as the capital accumulation owned by nations
Empowering youth economic through cash waqf (case of Malaysia)
No full textCash waqf plays an important role if channelled to address economic challenges upon specific segment in the society for their sustainable economic empowerment prepare them upon economic challenges ahead. Through the application of cash waqf, we are able to promote the benefits of Islamic waqf to the society. In this paper, we analyse economic challenges among youth in a developing economic environment in the case of Malaysia. We also try to investigate the practicality of cash waqf utilization as major solutions to the problems. Based on qualitative approach covering library and online academic study, we try to analyse how Islamic cash waqf development can empower the youth ..
Enhancing real economy: what is the role of social cohesion
No full textThe slides highlight 1) finance growth theory used in the study; 2) social cohesion and growth nexus
Role of Islamic microfinance institution in poverty alleviation and enhancement of well-being: case of Islamic Financial Cooperative (BMT) in Indonesia
No full textAll human beings in this world deserve a better physical and social well-being particularly the quality of life. By having proper quality of life, the advancement of individual's physical and mental aspect can be assured. As such, the chronic social disease called poverty must be expelled. In Indonesia, Islamic Financial Cooperative which is known as Baitul Maal wat Tamwil (BMT) has been influential in alleviating poverty by providing financing access and social development programs to the poor, low income and the un-bankable. This paper purports to show that Islamic Microfinance Institution (IsMFI) particularly BMT has contributed towards poverty alleviation as well as enhancement of members' well-being and quality of life. As such, it becomes interesting to firstly find out whether the members have significantly increased their income after gaining financing access from BMT. Secondly, are they satisfied in terms of their physical well-being (PWB) and social well-being (SWB). Data from 750 respondents were analyzed using SPSS software. The study found that the members' Income after joining BMT has significantly increased. It also showed that majority of the members were satisfied with their PWB and SWB after joining BMT for several years
The determinants of mission drift in microfinance and threshold of outreach-financial sustainability of microfinance institutions
No full textThe microfinance industry can reach the poor in large scale and yet attain profitability. To maintain these two objectives which is known as double bottom line, microfinance institutions (MFIs) have to find the right balance between financial sustainability and social performance. However, there have been considerable debates on whether the goals of the double bottom line have been compromised. It is argued that to attain profitability, MFIs have allegedly shifted away from its mandate of serving the poorest borrowers in pursuit of financial sustainability. This phenomenon is described as "mission drift" ..
Stock market liberalization implications on macro economy & stock market development
No full textFinancial liberalization became a key economic policy which was implemented by many emerging countries during the 1980s and 1990s. Nevertheless, the academic critiques argue that it could render domestic stock markets highly volatile and economies susceptible to economic turmoil due to the irrational and pro-cyclical nature of international capital flows, and the characteristics of the emerging markets such as market imperfections, information asymmetry, and lack of sound financial infrastructure. The studies generally conducted during the 1990s and early 2000s suggest that being small in size, less liquid, less efficient, highly volatile, and having poor quality of legal environment and governance were common characteristics of the stock markets in the emerging Islamic countries (henceforth, EIC). Supporting this view, a divergence in the performance of stock market development and economic growth appears between EIC and emerging non-Islamic countries (henceforth, ENIC) since the 1990s, in favor of the latter. The limited and relatively dated literature studying the effect of financial liberalization, which is a broader approach, generally suggests that EIC could not derive benefits to the extent that is expected by the main stream. In this regard, Is stock market liberalization (henceforth, SML) a detrimental or beneficial factor for the stock market development and economic growth in EIC in the long run? becomes the problem statement of the study. In order to address the problem statement, the dissertation examines the effect of SML on the stock market volatility, cost of capital, stock market development, and finally economic growth in both EIC and ENIC in a comparative approach. Overall, the study results drived from linear models, i.e. static panel techniques, and non-linear models, i.e. ARCH and its variants, suggest that SML reduces the cost of capital, contributes on the stock market development and economic growth in both EIC and ENIC; and the effects are stronger, at least in magnitude, in EIC. It is suggested that financial liberalization is expected to improve the financial infrastructure by forcing the local authorities to implement necessary reforms in order to eliminate the market deficiencies and improve the standards of financial system. The reformation implemented during the late 1990s and early 2000s along with the policies to liberalize domestic capital markets is the main ground behind the study results
Islamic finance: how it can reduce the gap between the rich and the poor
No full textThe main objectives of this study are: 1) to present the main cause of the huge gap between the rich and the poor since 1970s; 2) to highlight the Islamic approach in handling economic development in a just and ethical manner; 3) to present the alternative financial institutions to interest/riba-based institution providing their financial products, their objective and their impact in narrowing the gap between the rich and the poor
Determinants of social and environmental sustainability disclosure: an analysis of the banking sector in the OIC countries
No full textThe aim of this paper is to investigate the determinants of ESG disclosure in the OIC banking sector. This study considers bank specific, governance specific and macro variables as potential determinants. By analysing 98 banks using Random Login model, the study suggests that asset size and capitalization are significantly positively associated with the disclosure of environmental and social indicators Banks with higher loan to total asset ratio are most likely to disclose their environmental and social indicators. Lower profitable banks perform better environmental and social activities compare to the higher profitable banks
Impact of seasoned equity and private placement disclosures on derivative prices: are the spot and option markets integrated?
No full textThis paper reports evidence of significant abnormal returns in call and put options in the New York Stock Exchange around the disclosure time of two equity funding events. The delta values as risk of options are used to adjust gross returns of calls and puts to obtain adjusted abnormal returns. Theory suggests any stock price increases around private placement announcement dates would make calls to become in-the-money, so call prices should increase: conversely, puts would become out-of-money so put prices should be unaffected. Stock price declines around seasoned equity announcement dates would make put prices to increase since puts become in-the-money: call prices, having become out-of-money, would not change. Further, if the spot to the derivative market price impact is due to both markets being fully integrated, a trading strategy could yield profits. To test this, we apply cointegration and Granger-causality tests: we find there is no predictable spot-to-option-market integration in either direction. The empirical evidence of option price changes reported here and also evidence of no integration provide support for the idea that spot and option prices are being formed independently of each other, therefore prices are consistent with the efficient market hypothesis and the option pricing model
Investigating risk shifting in Islamic banks in the dual banking systems of OIC member countries: an application of two-step dynamic GMM
No full textThe original intent of conventional banking was to serve as pure intermediary between surplus fund holders and deficit units in the economy. In this role banks transferred risk from depositors to borrowers. An edifice of deposit insurance system and supervisory/regulatory structure was erected to protect the creditor at the expense of the debtor. In the last five decades, however, advances in information technology and in financial innovations have made possible the emergence of an immense capacity for rapid regime switching from risk transfer by risk shifting was amply pronounced in the financial crisis of 2007/2008. The fallout from the crisis has intensified calls for a re-examination of current banking model. Banks' tendency to shift the risk of losses to external parties, while internalizing gains through debt-based contracts (Sheng, 2009), creates a minority class (equity holders and financiers) that benefits from economic and financial growth and excludes a majority (depositors and tax payers) from sharing in the prosperity. Worse still, the majority stands to bear the brunt of recurrent risk-shifting induced crises