A body of work has emerged that examines human capital from the perspective of skills to better understand the types of expertise that influence innovation. The relationship between skill and financial innovation, however, is poorly understood in the context of Islamic financial institutions (IFIs). IFIs are distinct from their conventional counterparts by their compliance with Shariah law. Based on a survey of IFIs in Bahrain and Malaysia, this paper examines the effect of different skills on IFI innovation. The findings indicate that while skill in Islamic finance positively influences innovation, skill in Shariah law does not. Cognitive-technical skill is also highly significant, but marketing skill has a negative effect. The results suggest that Islamic financial innovation relies on continuous improvement that sustains markets, product and service innovation. Sustaining innovation lends itself to abilities that are oriented towards problem solving and computation of Shariah and business risks. This favors skills of programming and expertise in Islamic finance over marketing and Shariah legal proficiency.

Newcastle University ePrints -eprint.ncl.ac.uk Poon J, Pollard JS, Chow J, Ewers M. The rise of Kuala Lumpur as an Islamic financial frontier. Regional Studies 2016, 1-11. ABSTRACT This paper examines Kuala Lumpur's emergence as a prominent global Islamic financial center. Distance from the West and the Middle-East offers a frontier positioning that facilitates new social practices from integration of financial knowledge of Western world cities and Shariah authority claimed by Gulf cities. Based on primary data, the paper shows that transnational, transcultural alliances forged through skills of mediation and compromise among the city's Islamic talents and Shariah scholars favorably connect separate economic and cultural spheres of knowledge.

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence Newcastle University ePrints -eprint.ncl.ac.uk

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