International Journal of Economics, Management and Accounting
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SOCIAL SECURITY AND ZAKÄ€H IN THEORY AND PRACTICE
Full text linkWhile the West was first acquainted with the laws of social security only at the beginning of the last century the concept of social security was already introduced by Islam fourteen centuries ago as it articulated a number of institutional frameworks for inclusive and fair development with the institution of zakÄh being one of the most important ones. This study aims at analyzing the common features and differences between the zakÄh system and the social security system of the modern welfare state of today. To this end, this article attempts to compare some of the theoretical and administrative aspects of both institutions. The principal objective is to highlight the primary principles underpinning each system, which formulate the objectives each system sets out to achieve and the stance of both institutions on some values and common objectives such as social solidarity and equality. The article also discusses the conceptual framework of the two institutions, their implementation models, as well as their economic effects. The overall analysis suggests that one distinct feature of the Islamic approach to social security is that it puts more emphasis on the role of the whole society in easing social ills and providing social security than on the role of the State as is the case in the social security systems of today's modern welfare state. The article argues that the zakÄh system aims at attaining different objectives and by nature has different emphasis compared with social security systems of today’s modern welfare state.Â
THE MODERATING EFFECT OF FAMILY CONTROL ON THE RELATIONSHIP BETWEEN BOARD OF DIRECTORS EFFECTIVENESS AND COST OF DEBT: EVIDENCE FROM OMAN
Full text linkThis paper is aimed at examining whether or not family control can influence board of directors’ effectiveness and thereby affect the cost of debt in the Sultanate of Oman. This paper reports the results from a hierarchical regression analysis based on 476 observations of firms listed on the Muscat Securities Market for the period 2005-2011. The paper contributes to the literature by extending previous cost of debt studies by considering the Sultanate of Oman business environment where family ownership control is more common. Additionally, this study contributes by using a composite measure of board of director characteristics to capture the combined effect of board effectiveness on the cost of debt based on the agency theory framework. This paper tests the moderating effect of family ownership control on the relationship between board of directors’ effectiveness and cost of debt. The empirical results indicate that family control positively moderates the relationship between board of director effectiveness and cost of debt. The results of this paper are useful to all stakeholders (including debt holders) by providing them with an important indicator regarding the kind of controlling shareholder on the board of directors that will protect their interests, especially in an environment of limited legal protection and law enforcement.Â
ISLAMIC HOME FINANCING AND THE REAL SECTORS IN MALAYSIA: AN ARDL BOUND TESTING APPROACH TO COINTEGRATION
Full text linkThis study examines the dynamic relationship between macroeconomic variables (i.e., gross domestic product, house prices, stock prices, and interest rate) and home financing provided by Islamic banks in Malaysia. Using quarterly data from 2007 to 2014, this study employs autoregressive distributed lag (ARDL) bound testing cointegration approach, impulse response function (IRF), and forecast error variance decomposition (FEVD) to analyze the long-run and short-run relationships between selected macroeconomic variables and amount of Islamic home financing. This study finds that macroeconomic variables have distinct long-run and short-run influence on Islamic home financing. Our findings reveal that policy intervention to stimulate or dampen home financing provided by Islamic banks, in the long run, can focus on GDP, house prices, and monetary policy. This further underscores the link between the real sector of the economy and bank lending by Islamic banks. In addition, this study documents evidence that Islamic home financing in Malaysia, at least in the short run, is not dependent on interest rate and hence, calls for a potential alternative rate, possibly rental rate, that can be used as a benchmark rather than the current conventional interest rate. To a certain extent, the findings suggest that Islamic banks are non interest based and have managed to live up to their ideals in achieving the objectives of SharÄ«Ê¿ah (maqÄá¹£id alSharÄ«Ê¿ah) by promoting real sectors to increase Islamic home financing. This study is among the very few studies that empirically examine the nexus between Islamic home financing and real sector of the economy
THE APPLICATION OF ḤABL MIN ALLĀH AND ḤABL MIN AL-NĀS ELEMENTS IN ISLAMIC CODE OF ETHICS: AN EXPLORATORY CASE STUDY
Full text linkWork is often perceived as a means to pursue material interest and basic human needs. Hence, the notion of work has become a meaningless routine that engage man with a series of tasks and duties, which, subconsciously, has made man void of spiritual fulfillment. To address this, Islam ruled on the elements of human to God relationship (ḥabl min AllÄh) and the fellow human relationship (ḥabl min al-nÄs) as the foundation of work ethic that seeks to fulfill both physical and spiritual concerns. Embarking on this idea, this article seeks to explore the application of both elements in cultivating ethical conduct in the workplace by addressing the question of whether the principles are given proper emphasis in employees’ ethical work conduct. This research employed two modes of data collection – survey and interview. The survey is conducted on 166 employees of Tabung Haji (Pilgrims Fund Board), examining to what extent these elements are applied in their work; interview with the manager of Tabung Haji was also conducted to understand the management’s commitment in implementing the organizational code of ethics, known as the Work Values and Ethics of Tabung Haji (NEKTH). The outcome from interviews and survey has shown that both elements were given proper emphasis. The survey indicates that one of the principles, the relationship with Allah (ḥabl min AllÄh), is more emphasized than the human relationship, which was assumed to be the driving force of the employees’ ethical practices. The study proves that the inculcation of the principles is significant in reducing work misconduct as well as in promoting ethical work culture. This article aims at providing a deeper insight into the framework of the Islamic code of ethics, and subsequently raising awareness among managers on the significance of the elements in cultivating ethical practices at the workplace
QUALITY OF HUMAN CAPITAL AND LABOR PRODUCTIVITY: A CASE OF MALAYSIA
Full text linkIn this study, we investigate the impacts of human capital on labor productivity in Malaysia using panel data analysis. Central to the study are the magnitudes of human capital variables, represented by educational levels and health status, on labor productivity. The panel data employed covers 14 states in Malaysia, spanning from 2009 to 2012. Results of the study are estimated using the fixed effects generalized least squares (GLS) model. The results show that human capital quality (higher educational levels and better health status) is positively significant in improving the level of labor productivity in Malaysia. Our estimates also suggest that the impact of health on labor productivity is greater than the impact of education. Improvements in the quality of health and education are therefore crucial for Malaysia to achieve higher productivity growth
THE PERFECTION AND SELF-SUFFICIENCY OF THE QURʾĀN IN THE LAW OF INHERITANCE (PART ONE)
Full text linkThis paper addresses the law of inheritance detailed in the Book of Allah, the Qur’Än. It is about a system that Allah took complete responsibility of its explanation in detail. This is different from the norm, whereby Allah gives the general ruling and its details or explanation will be given by the Prophet (á¹£al-AllÄhu Ê¿'alayhi wa sallam). This attitude itself indicates the great position held by this knowledge. Islam values family unity and integration. Family disputes, disintegration and severing of ties can occur if shares of the estate are not placed in their correct position. Allah The Almighty has taken the said responsibility of explaining it in detail to the Ummah to prevent dysfunctional and broken families. The researcher relies solely on the Qur’Än and some sources which are also relying on the Qur’Än. The work aims to expose the beauty of the concise information about inheritance mentioned in the Qur’Än. The method of the Qur’Än is so comprehensive covering all the heirs of the deceased (with the exception of the grandmother) even though the ÄyÄt that tackled the issue are not more than four. This research is comprised of two separate articles: PART ONE which discusses the first type of inheritance (inheritance with Fará¸) and PART TWO where the second type (inheritance with Taʿṣīb) is discussed. In this article each set of conditions that qualify an heir to inherit a fixed share is accompanied by a table that illustrates their application
EXPLORING APPLICATION OF EQUITY-BASED FINANCING THROUGH MUSHÄ€RAKAH MUTANÄ€QIá¹¢AH IN ISLAMIC BANKS IN MALAYSIA: PERSPECTIVE FROM THE INDUSTRY PLAYERS
Full text linkDue to the prohibition of interest in Islamic financial transactions as well as the nature of the Islamic banks which is based on the profit and loss sharing concept, the equity-based financing should be widely adopted rather than debt-based financing which is similar to that of the conventional banks. As such, financing instruments such as Muá¸Ärabah and MushÄrakah are supposedly the major financing instruments offered by the Islamic banks. However, as argued in previous studies, the Islamic banks today are concentrating more on debt-based financing, particularly MurÄbaḥah and IjÄrah contracts. Based on survey questionnaires on sixteen Islamic banks in Malaysia, this study examines the perceptions of the Islamic bankers with regard to issues on concept, pricing and compliance to SharÄ«Ê¿ah of equity-based financing in Islamic banks in Malaysia. It also investigates the challenges faced by Islamic banks in adopting equity-based financing, and examines the current practice of MushÄrakah MutanÄqiá¹£ah principle that has been applied by a few Islamic banks in Malaysia. Based on the findings of this study, the respondents generally agree that the principle of profit and loss sharing element under equity-based financing represents the true spirit of Islamic banking practices. However, due to constraints arising from the complex nature of equity financing products compared to conventional debt-based products, the Islamic banks are hesitant in applying the true concept of equity financing. Several recommendations on the possible ways to gradually shift from debt-based financing to equity-based financing are suggested, particularly on the needed financial infrastructure to support adoption of the equity-based financing by the Islamic banks
DETERMINANTS OF ENVIRONMENTAL REPORTING QUALITY IN MALAYSIA
Full text linkThe study examines the relationship between share ownership distribution,  profitability, firm size and leverage with the quality of environmental disclosure in annual reports in 2009, two years after Malaysia made corporate social responsibility disclosure mandatory for all listed companies. Three theories; legitimacy, resource based view and information provided the theoretical underpinnings of the study. A content analysis of the annual report of 164 companies in the environmentally sensitive industries (ESI) was undertaken. Disclosure quality was measured using a self-developed index adapted from prior studies. The findings revealed a significant positive association between firm size and leverage with the quality of environmental reporting, thus providing the support for legitimacy theory. Given that share ownership distribution and profitability had no significant relationship with the quality of environmental reporting, the use of resource based view and information cost theories did not provide any support in explaining environmental reporting behavior of companies in the environmentally sensitive industries in Malaysia
FINANCIAL EXCLUSION AND LIVELIHOOD ASSETS ACQUISITION AMONG MUSLIM HOUSEHOLDS IN ILORIN, NIGERIA: A STRUCTURAL INVARIANCE ANALYSIS
Full text linkThis study examined the relationship that exists between the latent variables of financial exclusion (credit, savings, and remittances) and sustainable livelihood assets (social capital, natural capital, physical capital, and human capital) among some poor Muslim households in Ilorin, Kwara State, Nigeria. Data elicited via survey questionnaire administered on poor Muslim households was analysed based on both factor analysis and structural equation modelling using SPSS 19.0 and Amos 19.0 software. The results indicated that the lack of financial inclusion significantly and statistically impedes the acquisition of the livelihood assets. The invariance analysis also revealed that both gender and educational attainment do not moderate the hypothesised structural model. The relatively small sample size and coverage of study area are major limitations to generalizing the findings. Nonetheless, the findings imply that financial inclusion strategies in Nigeria and perhaps in other Muslim majority areas should be located within a broader sustainable livelihood framework. This paper contributes to the literature on implication of financial exclusion from an integrated welfare analysis perspective given that access to, and uses of finance are viewed as independent rather than conjoined