International Journal of Economics, Management and Accounting
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The Moderating Effect of Board Homogeneity on the Relationship Between Intellectual Capital Disclosure and Corporate Market Value of Listed Firms in Nigeria
Full text linkThis paper examines whether or not concentration of board members based on ethnicity and religion can impact on intellectual capital disclosure and thereby influence the corporate market value in Nigeria. This article reports the results from a two-step dynamic system generalized method of moment estimation based on 455 firm-year observations from 91 listed firms on the main board of the Nigeria Stock Market for the period 2010-2014. The study measures board homogeneity based on religious and ethnic affiliations of corporate board members in line with upper echelons theory in explaining their moderating effect on the relationship between intellectual capital disclosure and firm value which is proxied by cost of capital and share price volatility. The empirical results indicate that board ethnic and religious composition has moderating effect on the relationship between intellectual capital disclosure and cost of corporate market value. Though the finding might not be extended to smaller firms which could be a limitation, the results of this study are useful to all stakeholders especially the financial reporting council of Nigeria in policy formulation and perhaps issuance of corporate governance standard that would provide a more diversified board than currently being practiced in the country among the larger firms. The study is the first to consider moderating effect of religious and ethnic composition on the relationship between intellectual capital (IC) disclosure and corporate market as well as controls for heteroscedasticity and endogeneity issues by adopting two-step system generalized method of moments as a parameter estimator
Does Home Financing Promote Affordability of Home Ownership in Malaysia? An Empirical Analysis Between Islamic and Conventional Banks
Full text linkThe aim of this study is to examine the influence of home financing offered by both Islamic and conventional banks and affordability of home ownership (as measured by House Price/GDP per capita) in Malaysia. At the same time, it attempts to assess the effects of employment and interest rate as measured by Overnight Policy Rate (OPR) on home ownership affordability. The study employs the Auto Regressive Distributed Lag Model (ARDL) on yearly data from 2007 to 2014 in order to investigate the link between affordability and selected banking variables such as total home financing by Islamic banks and OPR. Data were extracted from the National Property Information Center (NAPIC) and Bank Negara Malaysia (BNM) Monthly Statistical Bulletin. This study finds that there are cointegrating relationships among all the selected variables at the selected lag length. Home financing of both Islamic and conventional banks were found to be significant in influencing Affordability of Home ownership in Malaysia. Consistent with the fundamentals of Islamic finance, our findings further suggest that OPR (interest rate) is less significant in determining home affordability in the case of Islamic home financing compared to conventional home loan. This study is an empirical attempt to analyze the effect of Islamic home financing as well as conventional loan on affordability. The approach used is technically not new, but it offers better insights into the applicability of Islamic finance in promoting affordability of home ownership. This finding therefore warrants a more in-depth analysis to explore alternative home financing mechanisms such as rental rate pricing to promote home ownership affordability among low to medium income earners in Malaysia
Short- and Long-Term Determinants of Residential Electricity Demand in Turkey
Full text linkThe purpose of this study is to predict the factors affecting the residential electricity demand by using a multivariate econometric model. The variables of the model established in this context are net electricity consumption in the residential sector, the price of electricity, real income per capita, average air temperature showing the climatic conditions and the urbanization rate. Residential electricity demand was analyzed for short- and long-term with the ARDL-Bound Testing by using the annual data for the years 1990-2014 in Turkey. As a result of the analyses both short- and long-term residential electricity demand was found to be negatively and significantly affected by price of electricity and positively and significantly affected by income, average temperature and urbanization rate. The price elasticity of demand was estimated to be smaller than 1 in both short- and long-term. Although income elasticity of demand was estimated to be smaller than 1 in the short-term, income elasticity of demand was found to be higher than 1 in the long-term. In addition, climatic condition was found to be most effective variable affecting residential electricity demand
Some Management Lessons in Sūrah Al-Baqarah Based on the Works of Khaled (n.d.) and Khan (2012)
Full text linkThis study explores some of the management lessons in Sūrah Al-Baqarah by referring to the explanations of Khaled (n.d.) and Khan (2012, 2016). Five management lessons were derived from Khaled (n.d.) and six management lessons were derived from Khan (2012, 2016). Khan (2012, 2016) was more detailed than Khaled (n.d.) and highlighted the problem of corrupt leadership. Leaders can became “spiritual people with a worldly mind-set†(Khan, 2012). The psychological and organizational processes that enable leaders to mislead their followers are then explored. Although one assumes that bad leaders are deliberately unethical, social psychology shows that good leaders can become bad unintentionally over time. Muslim business leaders can build one of three types of organizations. One with a positive organizational culture, one with a neutral organizational culture and one with a negative organizational culture. Similarly, Muslim employees have an ethical responsibility to seek employment in an organization whose corporate culture does not clash with Islamic values. As the Qur’ān provides timeless guidance, one can conclude that good and ethical leadership is an eternal challenge
Factors Affecting Quality of Life of Medical Assistance Recipients of Zakat Fund in Malaysia
Full text linkPoor people generally have difficulty in accessing good healthcare services. This can consequently lead them to have a lower quality of life. This paper investigates whether zakat medical assistance helps improve the health of the asÌ£naÌ„f (zakat recipients) and in turn upgrade their quality of life. The crosstab analysis of 60 respondents in Penang, Kelantan and Negeri Sembilan in 2014 shows that 93.4 percent of the asÌ£naÌ„f reported that zakat medical assistance has increased their quality of life. Meanwhile, multiple regression analysis shows that among the predictors of health, income and education, health status is the significant predictor of quality of life of the zakat recipients. These findings would be useful for policy makers, especially the State Islamic Religious Councils, in order to focus on improving the level of quality of life of the asÌ£naÌ„f and continue to increase the allocation of medical financial assistance from zakat to the eligible asÌ£naÌ„f. At the micro level, the medical assistance rendered would help improve both health status and quality of life. As a result, zakat has great potential to be one of the economic tools to alleviate poverty among Muslims in Malaysia.Â
Sovereign Sukuk Pricing Analysis: Do Macroeconomic Variables Matter?
Full text linkDevelopment of the global sukuk market has been pioneered by Malaysia with the launch of the first sovereign 5-year global sukuk of US$600 million in 2002. Since then, the sovereign sukuk market has developed rapidly, with sovereign sukuk being issued by the Governments of Turkey, Qatar, United Arab Emirates, Bahrain and Indonesia to name a few. In view that sovereign securities are not totally free from default, there is also a great deal of concern associated with them as some of the issuing countries have experienced major debt servicing problems in the past such as the Greek debt crisis. As such, it is essential to analyze whether the sovereign sukuk yields do reflect the macroeconomic fundamentals of the issuing country. Based on the analysis of five countries in Asia and the Middle East, this study employs panel data from 2006 to 2013 and shows that only the inflation rate is able to explain the movement of sovereign sukuk yields. The insignificance of other macroeconomic variables such as GDP growth and money supply indicate that tagging the economic growth of the issuing country onto the pricing of sovereign sukuk yields may not be feasible at this juncture. Hence, it is concluded that in order to develop a standalone pricing mechanism different from the one used by the conventional bond market, more efforts are needed so that the sukuk market will expand with even more market player participation to create the liquidity needed for it to develop its own pricing mechanism
Efficiency of Islamic Banks in Indonesia: Data Envelopment Analysis
Full text linkThis paper measures the efficiency of Islamic commercial banks in Indonesia by analyzing factors that affect the level of efficiency using the two-stage data envelopment analysis (DEA) method. The objects of this study are 10 Islamic commercial banks in Indonesia which are analyzed from 2011 to 2014. Two methods are used in this study, namely nonparametric method of DEA in the first stage and Tobit model in the second stage. The actual average efficiency of Islamic commercial banks in Indonesia is at fairly good level with an average score 91.82, which means that although relatively inefficient, Islamic commercial banks in Indonesia are able to optimize their resource inputs to produce outputs as an intermediary institution. The application of the Tobit model uses asset (ASSET), non-performing financing (NPF), capital adequacy ratio (CAR), number of bank branches (BRANCH) and return on asset (ROA) as the explanatory variables. The results showed that the variables of assets, number of bank branches, and ROA significantly affect Islamic commercial bank efficiency, while CAR and NPF empirically do not have a significant effect on efficiency
SWITCHING INTENTION OF MUSLIM DEPOSITORS IN ISLAMIC DEPOSIT ACCOUNT
Full text linkIslamic finance has achieved remarkable growth all over the world. Without exception, Malaysia has also been enjoying rapid and robust development in Islamic finance. Despite the encouraging growth and the great acceptance of Islamic financial products, one controversy may reverse the perception about Islamic finance. The issue is that recently several Islamic banks introduced the concept of bai‘ al-‘īnah to be applied on deposit account which allows them to promise return to depositors. This strategy may encourage more Muslims to keep their money in Islamic banks. The use of this contract is in principle permissible in Malaysia, albeit admitted as controversial. Therefore, this study attempts to examine the switching intention of Muslim depositors if return on Islamic deposit account is not promised or guaranteed by Islamic banks. The Theory of Reasoned Action, in which intention could be the best determinant of individual behavior, is used as the basis of the study with a 375 participant sample. The findings showed that Muslim depositors do not really care about a promised return for deposit account practiced by several Islamic banks. For that reason, Islamic banks should not worry about introducing a promised-return based product for deposit accounts
