INCEIF University Journals
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The Moderator Effects of Owner-Manager Knowledge on The Intention to Adopt Islamic Financing Facilities in Malaysia
No full textPurpose ‒ The research aims to investigate the owner-manager knowledge as a moderator variable enhancing intention to adopt Islamic financing facilities (IFF).
Design/Methodology/Approach ‒ The research obtained primary data by conducting a survey of 237 participants from halal-certified companies in Malaysia. The data was analyzed using partial least squares (PLS) to provide support for the hypotheses.
Findings ‒ The results show that relative advantage, top management support, owner-manager knowledge, and competitive pressure have a significant positive impact on the intention to adopt IFF. Owner-manager knowledge was also found to have a negative and significant effect on the relationship between complexity, top management support, and the intention to adopt IFF.
Originality/Value ‒ The research identifies a number of gaps in current literature. Firstly, it addresses the limitations of previous research on the adoption of IFF at an organizational level. Secondly, it examines the role of owner-manager knowledge as a moderating factor in the relationship between innovation, organizational and environmental (IOE) characteristics, and adoption intention, which has not been explored in any empirical studies to date.
Research Limitations ‒ This study has two main limitations. Firstly, the data analysis is based on a cross-sectional design, which cannot provide empirical evidence to support causal inferences. Secondly, the majority of the respondents are from the food/beverage/food supplement industry, as revealed in the results.
Practical Implications ‒ These findings can guide stakeholders in developing effective strategies to enhance the adoption of IFF by halal-certified companies in Malaysia.
 
Intellectual capital in non-profit organisations: lessons learnt for waqf institutions
No full textPurpose
This study aims to highlight the importance of intellectual capital (IC) for the operation of waqf (Islamic endowment) institutions, as few studies have discussed this issue in relation to non-profit religious organisations, particularly waqf organisations. Consequently, this study hopes to contribute to the development of waqf institutions in terms of human capital proficiency, the efficiency of operations and the effectiveness and sustainability of performance.
Design/methodology/approach
The authors reviewed a significant body of relevant studies written on various aspects of IC, to highlight the significance of considering IC in the operation of non-profit organisations (NPOs) and waqf institutions.
Findings
This study highlights the importance of IC in the operation of waqf institutions. It provides a platform that facilitates understanding of the existing obstacles and challenges in waqf institutions (such as lack of accountability, lack of funding, mismanagement and lack of trained labour, among others) and offers potential solutions through the consideration of knowledge and IC.
Research limitations/implications
This study is a conceptual analysis of IC in the context of NPOs. Future studies should conduct empirical testing, which will provide more detailed discussion and enriching insights into the issue of IC and the performance of NPOs, particularly in the case of waqf institutions.
Practical implications
This study provides several important implications for waqf institutions and other NPOs, as it sheds light on the consideration of knowledge and IC in their operations.
Originality/value
To the best of the authors’ knowledge, this study is the first to discuss the issues of waqf in the light of IC and provide an integrated framework for the operation of waqf institutions.
DOI: https://doi.org/10.1108/IJIF-10-2018-011
Are Islamic mutual funds exposed to lower risk compared to their conventional counterparts? Empirical evidence from Pakistan
No full textPurpose
This study aims to comparatively analyze the systematic, idiosyncratic and downside risk exposure of both Islamic and conventional funds in Pakistan to see which of the funds has higher risk exposure.
Design/methodology/approach
The study analyzes different types of risks involved in both Islamic and conventional funds for the period from 2009 to 2016 by using different risk measures. For systematic and idiosyncratic risk single factor CAPM and multifactor models such as Fama French three factors model and Carhart four factors model are used. For downside risk analysis different measures such as downside beta, relative beta, value at risk and expected short fall are used.
Findings
The study finds that Islamic funds have lower risk exposure (including total, systematic, idiosyncratic and downside risk) compared with their conventional counterparts in most of the sample years, and hence, making them appear more attractive for investment especially for Sharīʿah-compliant investors preferring low risk preferences.
Practical implications
As this study shows, Islamic mutual funds exhibit lower risk exposure than their conventional counterparts so investors with lower risk preferences can invest in these kinds of funds. In this way, this research provides the input to the individual investors (especially Sharīʿah-compliant investors who want to avoid interest based investment) to help them with their investment decisions as they can make a more diversified portfolio by considering Islamic funds as a mean for reducing the risk exposure.
Originality/value
To the best of the author’s knowledge, this study is the first attempt at world level in looking at the comparative risk analysis of various types of the risks as follows: systematic, idiosyncratic and downside risk, for both Islamic and conventional funds, and thus, provides significant contribution in the literature of mutual funds.
DOI: https://doi.org/10.1108/IJIF-01-2019-001
An integrated approach for building sustainable Islamic social finance ecosystems
No full textPurpose
Bringing more impact seems to be a real issue for social initiatives and organizations requiring the adoption of new approaches. The paper aims to define an integrated approach for building, maintaining and upgrading Islamic social finance and sustainable ecosystems.
Design/methodology/approach
The paper presents a conceptual framework based on case studies and literature review describing the methodology and the necessary steps to build sustainable ecosystems.
Findings
The paper shows the impact of building social finance ecosystems on tackling social issues. It emphasizes the idea that solving social issues is everybody’s business – from governments to businesses – and that those initiatives require sufficient Sharīʿah-compliant funding to achieve sustainability goals.
Research limitations/implications
The paper does not focus on the Islamic world experiences in building ecosystems serving social causes.
Practical implications
The paper gives an overview on how collaboration between the different social oriented organisations can enhance the social impact of the different initiatives. The aim is to ensure adequate financing to all the ecosystem components during the whole lifecycle.
Social implications
The suggested approach of building sustainable ecosystems can serve as a way to assess the existing social initiatives and practices to find relevant combinations targeting more impact.
Originality/value
In the social sphere, the idea of building ecosystems has been explored in different ways but never in a way that gathers all the components including finance providers, coordinators and the different types of initiatives. The paper adapts the ecosystem concept to the Islamic finance specificities.
DOI: https://doi.org/10.1108/IJIF-10-2018-011
The Legal Implications of Abandoned Digital Assets in Sharīʿah-Compliant Fintech Platforms
Get PDFPurpose — The recent surge in Sharīʿah-compliant fintech platforms has created an increasing volume of intangible digital assets of increasing value across emerging technological platforms. This phenomenon has generated a significant number of digital assets left behind after the demise of their owners. This paper provides a legal analysis of the implications of abandoned digital assets in Sharīʿah-compliant fintech platforms. It seeks answers to two central research questions: what are the Sharīʿah and legal implications of digital assets after the passing of the owner? How can the existing Sharīʿah-compliant fintech platforms prevent uncertainty over digital assets?
Design/Methodology/Approach — This is a conceptual paper which adopts a qualitative analysis of both primary and secondary sources from existing journals and regulatory instruments in Islamic finance jurisdictions to explore the gaps in the law regarding digital assets and regulations regarding unclaimed money. The paper further compares the approaches adopted in Malaysia and Saudi Arabia in regulating digital assets and unclaimed moneys.
Findings — The paper finds that there is scope for the administration of digital assets in both regulated and unregulated Sharīʿah-compliant fintech platforms. Similarly, the adoption of e-KYC that complies with the Sharīʿah ethos is essential to ensure that digital assets are not lost upon the account holder’s demise. The legal right and title of the account holder and legal heirs can only be protected through the operation of digital assets regulation in a Sharīʿah-compliant fintech environment.
Originality — This paper is of value to administrators and legal heirs of account holders in fintech environments. It recommends measures to prevent intestacy and uphold the account holders’ and legal heirs’ intergenerational property rights and financial benefits.
Research Limitations/Implications — As a conceptual paper, the attitude of digital asset users is not examined due to the absence of quantitative or qualitative data on devolution of digital assets.
Practical Implications — Although this study focuses on the implication of digital assets for Sharīʿah-compliant fintech platforms, the findings may well have a bearing on policymakers, legal practitioners, and administrators of estates in the management of emerging asset classes.
Article Classification — Conceptual pape
The Scale of Muslims’ Consumption Intelligence: A Maqāṣid Insight
Get PDFPurpose — This paper aims to develop a scale for measuring consumer intelligence based on the maqāṣid framework (al-nitāq al-maqāṣidi).
Design/Methodology/Approach — A large pool of items representing consumer intelligence based on maqāṣid al-Sharīʿah (objectives of Islamic law) was generated from one of the primary Islamic sources, i.e., Qurʾānic texts. The initial scale was purified and validated. A survey of 388 respondents who completed a usable questionnaire was used to run the analysis. The latter was split into two. The first half was utilised to run the exploratory factor analysis (EFA) and the second half was used to run the confirmatory factor analysis (CFA).
Findings — The EFA result revealed that the maqāṣid-consumption intelligence scale is a four-dimensional construct consisting of 21 items. The scale includes metacognition, cognition, motivation, and behaviour. The CFA confirmed the dimensionality, reliability and validity of the maqāṣid-consumption intelligence scale.
Originality/Value — There is currently no readily available scale to measure consumption intelligence among Muslims based on maqāṣid al-Sharīʿah. The study is expected to fill this gap.
Research Limitations/Implications — The maqāṣid-consumption intelligence scale can determine an individual’s level of consumption intelligence based on maqāṣid al-Sharīʿah. It is expected that the scale will stimulate further research on Muslim consumption intelligence, i.e., how is the consumption of an ideal Muslim consistent with Sharīʿah (Islamic law) values.
Practical Implications — The maqāṣid-consumption intelligence scale may eventually assist halal industries in formulating strategies to increase product demand
Waqf governance in the Republic of Guinea: legal framework, issues, challenges and way forward
No full textPurpose
The purpose of this paper is to seek to establish an effective governance framework for waqf (Islamic endowment) in the Republic of Guinea that would assist in enhancing socio-economic activities and eradicating poverty in the country.
Design/methodology/approach
It examines key governing features within the said country’s waqf legal framework and undertakes a comparison with other countries’ legal frameworks. This paper also examines waqf-related legal references of Guinea and other countries and analyses relevant online sources such as journal articles, research papers, webpages as well as informal discussions with persons informed on the subject matter within and outside the Republic of Guinea.
Findings
This paper identifies a number of prevailing issues affecting the development of the institution of waqf in the Republic of Guinea and, thereafter, proposes key reformatory measures. These include the passing of general codified legislation that comprehensively governs waqf affairs in the country and the setting up of a dedicated supervisory entity and competent managerial bodies to ensure the smooth and effective operation of the institution in the country.
Originality/value
This research proposes an innovative and befitting governance framework for waqf operations in the Republic of Guinea. These recommendations, if correctly adopted, would ensure the viability and efficacy of the institution of waqf in the Republic of Guinea and would lead to socio-economic development, as has been the case in other nations. Moreover, other countries with underdeveloped waqf governance systems could also model their waqf operations based on these recommendations, as they are most likely already encountering or going to encounter identical issues in this particular field.
DOI: https://doi.org/10.1108/IJIF-03-2020-006
Does the choice of stock selection criteria affect the performance of Sharīʿah-compliant equity portfolios?
Get PDFPurpose
There are a number of differences in the current Sharīʿah screening guidelines formulated by Sharīʿah scholars associated with world-renowned index providers and financial institutions. The purpose of this study is to highlight the consequences of such differences on the portfolio level outcomes for Sharīʿah-compliant investors. This study also investigates the cost of adopting an alternative stock selection methodology.
Design/methodology/approach
Seven Sharīʿah-compliant equity portfolios (SCEPs) are created from the active constituents of the S&P 500. Size, sector allocation and financial performance of the resulting seven portfolios are evaluated for the period 1984–2019. Style analysis is performed to attribute the difference in financial performance caused by the choice of selection criteria to different risk factors. The cost of switching the selection criteria is evaluated with turnover analysis and break-even transaction cost.
Findings
The choice of stock selection criteria has a significant effect on the size, sector bets and financial performance of the portfolios. Those portfolios which are constructed with market capitalization-based screens outperform portfolios constructed with total assets-based screens. The turnover analysis revealed that SCEPs are relatively costly in practice.
Originality/value
This study investigates the performance of Sharīʿah-compliant portfolios in the context of seven different screening guidelines. The effects of transaction cost and performance attribution to different risk factors represent the key contributions of this study.
DOI: https://doi.org/10.1108/IJIF-07-2020-013
A bibliometric analysis of quality research papers in Islamic finance: evidence from Web of Science
Get PDFPurpose
The purpose of this study is to provide quantitative information on the growth of Islamic finance literature. The study focused on publishing trends, countries producing research on Islamic finance, key authors, major contributing organizations, authorship patterns, keywords and articles with the highest citations.
Design/methodology/approach
Bibliometric analysis is applied to analyse the growth and publishing trends in Islamic finance literature. The Web of Science (WoS) database was used to extract bibliometric data covering the period 1939–2019 for Islamic finance literature.
Findings
The study finds that Islamic finance research has gained remarkable momentum in the literature. However, such growth is largely manifested in Malaysia because of a conducive atmosphere for this type of research. Interestingly, the study finds that the three most productive journals are located in the UK and Malaysia, while Professor M. Kabir Hassan from the University of New Orleans, the USA appears to head the list of authors with 23 publications on Islamic finance.
Practical implications
This study provides up-to-date literature on the current state of Islamic finance in the world; as a result, it supports the development of policies by the Islamic finance industry. The findings of the study also serve as a reference point for Islamic finance training and educational institutions.
Originality/value
Islamic finance is an emerging financial discipline; as such, there is a need for more awareness of this financial system in the world. Muslim-majority countries, especially Saudi Arabia, Turkey, Indonesia, the United Arab Emirates (UAE), Pakistan and Bahrain, have to include Islamic finance in their curriculum and establish research institutions and research journals. In addition, Arabic language journals should be indexed in WoS and/or Scopus to provide a high-quality publication platform. This study provides a more comprehensive bibliometric analysis on the growth of Islamic finance literature (1939–2019) in the WoS database; most of the prior studies have covered relatively few areas of focus and a lower range of years in some cases.
DOI: https://doi.org/10.1108/IJIF-03-2020-005
The regulation of Islamic banking in Mauritius
No full textPurpose
The purpose of this paper is to analyse the main components of the regulatory framework for Islamic banking in Mauritius. This small island state of the Indian Ocean aspires to host Islamic banking products while diversifying the range of financial services offered within its hybrid jurisdiction despite having a minority Muslim population. The study also aims at drawing some comparisons with the well-established regulatory framework that applies to conventional banking.
Design/methodology/approach
In this qualitative analysis of the regulatory framework of Islamic banking in Mauritius, the doctrinal approach is adopted. This method relies principally on a scrutiny of the provisions of the law and delves into the primary and secondary sources of law guiding Islamic banking practices in the Mauritian jurisdiction.
Findings
The research study concludes that, with the view of encouraging investors into Islamic banking, policymakers took some regulatory initiatives but these remained timid. These initiatives relied too often on borrowing from the regulatory framework in place for conventional banking practices instead of regulating the area within its own precepts. Prospects for expanding Islamic banking exist but will require more audacious regulatory steps so as to secure the environment within which Islamic banking is to flourish. In the meantime, the industry is in a status quo position with no further legal action currently being envisaged to re-launch this area.
Originality/value
This research study is among the first generated specifically on the regulatory framework of Islamic banking in a small financial centre that operates mostly offshore financial activities. Previous research work either focused on the empirical analysis or on reviewing the challenges and the prospects but no study has provided an in-depth analysis of the regulatory provisions circumscribing Islamic banking. This lacuna is being filled up by this research paper which highlights the regulatory needs of Islamic banking and comments on the inclusion of and the need for specific rules related to Islamic finance instead of relying on the overlap with conventional banking laws.
DOI: https://doi.org/10.1108/IJIF-09-2019-013