Shirkah: Journal of Economics and Business
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Do Political Risks Influence Sharia Bank Stability? The Case of Southeast Asia
Full text linkThe present study examines the influence of political risk on the stability of Sharia banks in Southeast Asia, a region characterized by rapid economic growth alongside significant political uncertainties. This study aims to fill a gap in the existing literature, which has largely focused on other regions like the Middle East and North Africa. This study employs a quantitative methodology, utilizing panel data regression with a Fixed Effects Model to analyze data from 17 of the largest Sharia banks in Southeast Asia over the period of 2018-2022. The data for the study were obtained from the annual financial reports of these banks. The key findings indicate that political risk has a significant negative impact on the stability of Sharia banks in the region. In contrast, the quality of regulation and the total assets of the banks were found to have a significant positive influence on their stability. Other internal factors, such as the Capital Adequacy Ratio (CAR), Non-Performing Financing (NPF), Financing to Deposit Ratio (FDR), and Return on Assets (ROA), did not show a statistically significant effect on bank stability in the context of this study. The results emphasize the importance for policymakers and regulators in Southeast Asian nations to actively manage political risks and continuously improve the quality of financial regulations to ensure the resilience of the Sharia banking sector. This research contributes valuable insights for academics, bankers, and government authorities by highlighting the crucial role of the political and regulatory environment in maintaining the stability of Islamic financial institutions
The Neutralized Lever: Exchange Rate Stability and the Paradox of Growth in Post-conflict Iraq (2005-2024)
Full text linkIn Iraq's post-conflict, oil-dominated economy, achieving macroeconomic stability is paramount, with the exchange rate acting as a central, yet complex, determinant of growth. This study empirically dissects the long-term relationship between exchange rate stability and economic growth from 2005 to 2024. Analyzing time-series data from the World Bank, IMF, and Central Bank of Iraq, the study applied a multiple linear regression model, robustly supported by unit root (ADF) and Johansen cointegration tests, to assess the impact of currency stability alongside foreign direct investment (FDI), inflation, trade openness, oil revenue, and political stability. The Johansen cointegration test confirms that a stable long-run equilibrium exists among the variables. However, our findings reveal a critical paradox: while the regression model explains a substantial 80% of the variation in GDP growth (R² = 0.80), no individual predictor is statistically significant. This outcome highlights how Iraq’s deep-seated structural challenges, overwhelming oil dependency, political instability, and potential multicollinearity, overshadow and neutralize the independent effects of conventional policy levers. Consequently, while exchange rate stability shows a positive but statistically insignificant effect, it is not a silver bullet for growth. This research concludes that sustainable economic recovery in Iraq is contingent not merely on currency management but on a foundational shift towards comprehensive institutional reforms, aggressive economic diversification, and integrated macroeconomic policies
Impact of Islamic Marketing Strategies on Firm Performance: Evidence from Jaiz Bank, Plc. Nigeria
Full text linkThe global business landscape has recently observed a notable increase in the adoption of specialized marketing strategies tailored to align with cultural, religious, and ethical principles. One prominent example of such a strategy is Islamic marketing, which caters to Muslim consumers' preferences and needs while upholding Islamic finance tenets. This study investigates the impact of Islamic marketing strategies on firm performance, focusing on Jaiz Bank, Nigeria's leading non-interest bank. Using a quantitative approach, this study analyzed secondary data from annual reports over a ten-year period (2012–2021) and apply linear regression to examine the relationship between Islamic marketing practices and key financial metrics: return on assets (ROA), dividend yields, and earnings per share (EPS). Results reveal a statistically significant impact of Islamic marketing on EPS, while its influence on dividend yields is limited, and its effect on ROA is not statistically significant. These findings suggest that while Islamic marketing strategies can enhance certain financial outcomes, they may require refinement or supplementation to drive comprehensive firm performance. This study contributes to the emerging field of Islamic marketing by offering empirical insights into its financial impacts, with implications for strategic development in Islamic financial institutions
The Gen Z's Participation in Cooperatives: Do Interest and Experience Matter?
Full text linkResearch on Generation Z and their contributions to economic activities is always intriguing to discuss, particularly efforts that can be undertaken to enhance their participation in economic growth. This study explores the roles of interest and experience as cooperative members within schools on the participation of Generation Z as cooperative members in Palangka Raya, Indonesia. Engaging 150 high school students, this research adopts a quantitative survey design to gather data concerning the interest, experience, and participation of Generation Z. The analysis results indicate that the interest and experience of Generation Z as cooperative members in schools significantly positively influence their participation at the community level. High interest fosters internal motivation, while positive experiences cultivate deep emotional and cognitive bonds with the cooperative. The combination of both yields a stronger positive impact. These findings offer insights for the development of cooperative programs in schools and regional government strategies to motivate Generation Z to actively engage in cooperative activities
Zakat Compliance: The Interplay of Religiosity, Awareness, and Knowledge
Full text linkThis study examined the influence of religiosity and knowledge of zakat on zakat awareness. It also investigates the influence of religiosity, knowledge of zakat, and zakat awareness on zakat compliance. This study involved 338 NPWZ owners who were registered as muzakki at the LPZ and lived in Serang, Banten province Indonesia. Proportional random sampling was used for respondent selection. This study used a variant-based structural equation test using PLS-SEM. The results indicate that religiosity positively influences zakat awareness and that knowledge of zakat also has a positive influence on zakat awareness. Furthermore, religiosity positively influenced zakat compliance, and knowledge of zakat enhanced zakat compliance. Higher levels of zakat awareness were correlated with increased zakat compliance. It's important to understand how much eligible Muslims actually follow through with giving zakat. This knowledge is key for gathering funds to help fight poverty and support community growth
Does Digitalization Have a Dampening Effect on Income Inequality? Evidence from OIC Countries
Full text linkThe rapid advancement of digital technology has the capacity to create significant effects on income distribution by shaping the availability and quality of employment opportunities. As a result, it has the potential to either narrow or widen income inequality in society. In this paper, we attempt to test the effect of digitalization on income and wealth inequality. We use a multiproxy of digitalization from the International Telecommunication Union ICT database and comprehensive inequality proxy from the World Inequality Database consisting of 56 Organization of Islamic Cooperation member countries from 2010-2021 and estimate their relationship by performing a fixed-effect panel regression. Our finding reveals that digitalization can alleviate income and wealth inequality. Its narrowing effect also applies to income gender inequality. The decline in income inequality is associated with lower GDP per capita, higher net inflow of foreign direct investment, and greater political stability. Similarly, lower wealth inequality is linked to lower GDP per capita and improved political stability. In light of these results, we recommend that governments implement policies aimed at fostering technological advancements, such as infrastructure development to enhance internet and telecommunication coverage. Additionally, inclusive economic growth policies should be prioritized, along with efforts to attract foreign investment through business-friendly reforms and the promotion of political stability that is devoid of gender discrimination
Liquidity and Firm Market Value: The Moderating Role of Firm Size
Full text linkA strong market valuation signals robust future growth prospects, attracting capital investment as investors perceive potential for returns. Conversely, a declining market value may indicate underlying management inefficiencies, deterring investor confidence. This study investigates the impact of liquidity ratios on firm market value, with particular emphasis on the moderating role of firm size in this relationship. Utilizing a sample of non-financial firms listed on the Indonesia Stock Exchange from 2016 to 2022, this research applies panel data analysis through the Ordinary Least Squares (OLS) method to test the proposed hypotheses. The findings reveal that liquidity ratios—specifically the current ratio, quick ratio, and cash ratio—negatively affect firm market value. Moreover, the results suggest that firm size significantly moderates the relationship between liquidity ratios and market value. This study enriches the literature by providing nuanced insights into the optimal management of corporate liquidity to enhance firm market value. From a practical standpoint, the research offers valuable implications for managerial decision-making, particularly in crafting debt and asset management strategies that influence firm valuation
The New CX Marketing Advantages Model as a Predictor of Marketing Performance of MSMEs
Full text linkRapid digital transformation and increasingly complex consumer behavior demand new approaches in marketing strategies. To address this issue, this study examines the effect of innovation and digital marketing on the marketing performance of MSMEs in Banten Province, Indonesia, and introduces the New CX Marketing Advantages model, which offers an innovative framework to improve marketing performance, particularly for MSMEs. This study employs a quantitative approach to small and medium enterprises operating in KBLI-10 or the food industry in Banten Province. Through multistage sampling using purposive and proportional random sampling methods, 347 MSME actors were identified as respondents in this study. Data were collected using survey methods and analysed using simple and multiple linear regression involving three stages: instrument testing (validity and reliability tests) and hypothesis testing through structural equation modelling (SEM) with data processing techniques utilising the Confirmatory Factor Analysis (CFA) measurement model. The results show that digital marketing and innovation have a positive and significant effect on marketing performance, both partially and simultaneously. Therefore, this study implies that the more MSMEs engage in innovation and enhance digital marketing efforts, the greater is the opportunity to improve their marketing performance
Perceptions and Knowledge of Sharia Principles in Islamic Investment: Perspective of Muhammadiyah Community
Full text linkThis study aims to analyze the perception and knowledge of the Muhammadiyah community - one of the largest religious organizations in Indonesia - towards Sharia principles in investing in Islamic financial products. Using a qualitative approach with Qualitative Data Analysis Software (Q-DAS), data were gathered through in-depth interviews and participatory observations with members of the Muhammadiyah community. The results indicate that the participants have a significant awareness of Sharia principles. They acknowledge the prohibition of usury and the importance of avoiding investments in industries deemed haram according to religious teachings. Participants understood Sharia principles well and used them as guidelines for making investment decisions. However, the study also revealed that the Muhammadiyah community's knowledge of Islamic financial products requires improvement. There is a need for enhanced understanding of the concepts, features, benefits, and risks associated with Islamic financial products. Factors such as access to information, education, previous experience, and religious beliefs influence people's perception and knowledge in this area. The study concludes that while the Muhammadiyah community is highly aware of Sharia principles in investing, a deeper knowledge and broader understanding of Islamic financial products are essential
Revisiting the Nexus among Bank Specific Factors, Macroeconomic Factors, and Islamic Banking Performance: Three Measurement Models
Full text linkMuch of the research on Islamic banking performance relies on conventional metrics rather than Islamic metrics, warranting further exploration. This study provides an empirical analysis of bank-specific and macroeconomic factors on Islamic banking performance from 2016 to 2024 using three measurement models. Monthly data were processed using the ARDL approach and revealed that capital adequacy influences Islamic banking performance in the short term, but has no effect in the long term. Liquidity has an effect only in the long term. Financing Outstanding has a negative effect in the short and long term, while diversification has an effect in the short term but no effect in the long term. Bank size affects performance in the short term, but not in the long term, while macroeconomic factors show an inconsistent relationship. In the IPR model, inflation and exchange rates have no impact in either the short or long term. However, in the ROA and NOM models, these factors affect the long term, but not the short term. This study suggests that banks need to pay attention to financing and exchange rate risks, including the implementation of a strong risk-management system