International Journal of Economics, Management and Accounting
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RIBA, PROFIT RATE, ISLAMIC RATE, AND MARKET EQUILIBRIUM
No full textMuslim economists have suggested the profit rate to replace riba in an Islamic economic system. While this suggestion is a step in the right direction, it still has problem since not all profits are halal, as for example, profits from gaming and liquor businesses are definitely haram. This paper discusses the concept of riba and differentiates it from the profit rate and Islamic rate. As riba is prohibited in Islam, this paper explains the concept of Islamic rate, which is lawful in Islam as it is directly derived from the profits of halal business activities. The Islamic rate is the clearing mechanism in the money market and good market. The paper has also derived the money market equilibrium and good market equilibrium conditions or the IS-LM framework which can be used to analyze the efficacy of monetary and fiscal policy in an Islamic state. In order to clear the notion that the conventional banking system has been dictating the decision makings in the Islamic banking system in Malaysia, the paper uses the Toda-Yamamoto technique of Granger causality test to see the causality between the Islamic investment deposit rates, which are Islamic rates, of Islamic banking and the fixed deposit rates, which are riba, of the conventional banking. The results are not conclusive as a number of Islamic investment deposit rates have caused the fixed deposit rates while some fixed deposit rates cause Islamic investment deposit rates, and yet some others show that there are no causality between the two types of rate
Zakat in Malaysia - Present and Future Status
No full textZakat in Malaysia - Present and Future Statu
A NOTE ON THE MATHEMATICAL DERIVATION OF TOTAL FACTOR PRODUCTIVITY (TFP) AND ITS DECOMPOSITIONS
No full textThis article is written with a two-fold objective: to prove the equivalence between Total Factor Productivity (TFP) and technological change when the production function exhibits constant returns to scale, and to decompose the TFP into several components. Toward this end, we established a linkage between the theory of production (specifically the cost of production), and TFP. Prior to that, however, we showed how the TFP is computed using the Divisia indexes or the Tornqvist index. Finally, we showed that if the production is subject to constant returns to scale, the TFP growth rate is identical to the rate of technological change. Otherwise, with the existence of scale effects, the TFP may be decomposed into technological change and scale effects, the two major sources of TFP.JEL classification: C23, D24, O39Key words: Total Factor Productivity, Technical change effects, Scale effect
A TYPOLOGY OF MALAYSIA'S TRADE FLOWS (1990-1997): STRUCTURAL SHIFTS IN THE MERCHANDISE TRADE BALANCE
Get PDFMalaysia's merchandise trade flows between 1990-1997 is decomposed into intra-industry trade (IIT) and net trade (NT). NT is further decomposed into net exports and net imports to evaluate the changing structure of trade on the merchandise trade balance. The Grubel-Lloyd (GL) index was used to indicate the share of IIT in total trade (TT). This accounting framework shows that total trade in the electronic sector (GL > 0.7) increased from 28 percent of TT in 1990 to 45 percent in 1997 with SITC 776 (GL > 0.91) accounting for 13 to 20 percent of Malaysia's TT for the various years. Over the study period, the trade share of the primary sector decreased from 30 percent of total trade (TT) to 16 percent with the surplus of the primary sector decreasing from 14.87 percent of TT in 1990 to 5.42 percent in 1997. The manufacturing sector is always at a deficit although narrowing from -12.24 percent of TT in 1990 to -4 percent in 1997 with some fluctuations in the intervening years. The factors that possibly contributed to the increased internationalization of production as demonstrated by the increasing GL indices from 0.416 to 0.556 are also examined. Vertical IIT rather than horizontal IIT seem to prevail. Government policy like the promotion of the multimedia super corridor does seem to have an impact on Malaysia's trade structure, and subsequently on the structure of the merchandise trade balance.JEL Classification: F10Keywords: Malaysia, Trade balance, Intra-industry trade, Typology of trad
ETHICS IN ACCOUNTING EDUCATION: CONTRIBUTION OF THE ISLAMIC PRINCIPLE OF MASLAHAH
No full textThere is a growing concern over the apparently low moral standards of some accountants and an increasing number of academics who suggest that the education system should bear some of the blame. Ethical components in accounting education have been found to be insufficient and there is a lack of emphasis on humanizing accountants. The objective of this paper is firstly to address the importance of ethics in accounting education and evaluate the development of literature in this area. Secondly, the paper argues for the direction of accounting education to focus on religious ethical development and values in developing accounting ethics. The paper argues that the Islamic worldview and ethics perspective can provide some insights into the process of developing a more humanized and ethical accountant. This paper proposes the Islamic legal principle of maslahah as an ethical filtering mechanism to be taught as part of the ethical accounting education process. This is aimed at providing awareness to accounting students and accountants on the process to resolve ethical conflicts. The study of Islamic worldview and ethics provides a different ethical dimension on accounting education. Here, the debates on ethics in accounting education need to start with values, not on codes of professional conduct, and on responsibilities, not on rules. JEL classification: M4Key words: Accounting education, Islamic ethics, Maslaha
PROPOSED RESEARCH AGENDA IN ISLAMIC PERSPECTIVES ON MANAGEMENT STUDIES
Get PDFThis paper is a modest attempt to delineate some directions for research in the emerging field of Islamic perspectives to management studies. A case is built up initially by establishing that such research is scanty and then the reasons for scholarly disinterest and the measures possible to deal it with are discussed. The central theme of the paper is built on a typology of approaches. These four approaches have been expressed in colloquial terms as the “dig the goldâ€, “chinks in the armorâ€, “delve deeperâ€, and the “hands-on†approaches. Simultaneously, four directions of research are identified in terms of the environment, organization, relationship of the organization to the environment, and the effective management of organizations. A research framework is evolved on the basis of these four directions. When the research framework is meshed with the research approaches, a broad canvas for research emerges which then leads to the identification of research issues. The paper proceeds to propose certain other aspects for research agenda in terms of the levels of analyses, choice of research design, research methods and time frame.JEL classification: M10, Z12Key words: Islamic perspective; Research in management studies, Islamization of knowledg
WHAT DO ECONOMISTS CONTRIBUTE?
Get PDFEdited by Daniel B. Klein, Houndmills, Basingstoke, Hampshire: Palgrave, 2001, ISBN 0333777603, 156pp. (excluding i-xv)
FACTORS INFLUENCING THE UNDERPRICING OF INITIAL PUBLIC OFFERINGS IN AN EMERGING MARKET: MALAYSIAN EVIDENCE
Get PDFBy using 70 initial public offerings (IPOs) in the period 1992 to 1998, it is found that company size, indigenous population ownership and substantial shareholder losses are significant in explaining the variation of IPOs’ underpricing. Large companies are associated with higher discount on their shares to signal their superior future prospects. The unique characteristic of promoting the indigenous population, Bumiputra, to participate in the Malaysian equity market through the government regulatory intervention reduced underpricing. However, such intervention may have contributed to the losses on the part of the substantial shareholders. Surprisingly, Leland and Pyle’s signalling model on entrepreneur’s fractional ownership cannot be supported.JEL classification: G32, G38Key words: IPOs, Underpricing, Regulatory interventio
EARNINGS MANAGEMENT PRACTICES AMONG MUSLIM AND NON-MUSLIM MANAGERS IN MALAYSIA
Get PDFWe study the differences between the earnings management practices of the Muslim managed firms and the non-Muslim managed firms listed on the Kuala Lumpur Stock Exchange in Malaysia. The influence of Muslim managers on the earnings management practices among the sample firms is measured using discretionary accruals. We compile data for 99 firms over a period of 16 years, i.e. from 1980-1996, to estimate the discretionary accruals using regression analysis. The estimated discretionary accruals are then compared with the actual discretionary accruals in 1997 to measure the differences in the earnings management practices. We hypothesise that firms having a majority of Muslim managers will resort to less earnings management than firms that have a majority of non-Muslim managers. The study finds no statistical evidence to uphold the said hypothesis. JEL classification: M41, Z21 Key words: Earnings management, Muslim managers, Malaysi