The nexus between Islamic banking and industrial production

Bougatef, Khemaies; Nakhli, Mohamed Sahbi; Mnari, Othman

doi:10.1108/ijif-05-2018-0052

Cited by 16 publications

(23 citation statements)

References 22 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…In assessing the contributions of Islamic banking to economic growth, few studies have made distinction between PLS-based financing and non-PLS-based financing. For instance, Bougatef, Nakhli, & Mnari (2020) examine the role of Islamic Financing, PLS and Non-PLS financinf on Industrial production in Malaysia using the ARDL method. The result shows that Islamic financing plays an important role in boosting industrial production in the short and long run.…”

Section: Literatur Reviewmentioning

confidence: 99%

The Role of PLS Financing on Economic Growth: Indonesian Case

Masrizal

Trianto

2022

JIMF

View full text Add to dashboard Cite

This paper investigates the role of PLS financing and non-PLS financing of Islamic banks in supporting the real sector for the case of Indonesia using monthly data from January 2009 to December 2018. Applying the ARDL approach to model their long-run and short-run relations, we find positive contribution of the PLS financing scheme to Indonesia's economic growth. Comparing the PLS and non-PLS financing, we note that the PLS financing has a larger impact on growth, both in the long run and short run. Accordingly, for Islamic finance to have larger growth impact, concrete steps and initiatives must be put in place to increase Islamic financing based on PLS arrangements.

show abstract

Section: Literatur Reviewmentioning

confidence: 99%

The Role of PLS Financing on Economic Growth: Indonesian Case

Masrizal

Trianto

2022

JIMF

View full text Add to dashboard Cite

show abstract

“…The high proportion of profit-sharing type financing is also believed to reduce economic inequality, which will have an impact on increasing economic opportunities for people who have high potential to contribute to capital accumulation and the creation of added value (Giannini, 2013;Abdul-Rahman & Nor, 2016;Syarief et al, 2020). Profit-sharing financing has also been proven to be able to boost the economic growth of a country (Chowdhury et al, 2018) and contribute to industrial growth in driving productive businesses (Bougatef et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

Optimization of Profit-Sharing Financing at Islamic Banking in Indonesia

Riyadi

Iqbāl

Pangastuti

et al. 2021

J. Keuang. dan Perbank.

View full text Add to dashboard Cite

The purpose of this study is to identify factors that can encourage an increase in profitsharing financing. These factors are third-party funds in the form of mudharabah deposits, non-performing financing, equivalent rate, operational efficiency ratio, economic growth, and inflation. The research method uses a co-integration and error correction model (ECM) with a sample of the Islamic banking industry in Indonesia from the first quarter of 2015 to the third quarter of 2020. The results show that the factors that encourage profit-sharing financing are the growth of third-party funds in the form of mudharabah deposits, nonperforming low funding, low equivalent rate, operational efficiency, and economic growth. These factors are the key to driving the growth of profit-sharing financing. This research contributes to providing various alternative strategies in encouraging the growth of profitsharing financing, such as increasing retained earnings from profit, providing attractive profit-sharing incentives, transparency of financial reports to attract people to invest in Islamic banks, prevention and supervision of non-performing financing, be careful in determining the ratio by taking into account several internal and external aspects, as well as paying attention to the movements of existing economic growth.

show abstract

“…Unlike conventional banks (CBs), IBs are prohibited from charging interest on their Sharīʿah-compliant products. Instead, they use profit-and-loss sharing contracts (mu Á d arabah and mush arakah) and non-profit and loss sharing contracts like (mur aba Á hah, ij arah and isti Á sn aʿ) between depositors and borrowers (Safiullah and Shamsuddin, 2019;Bougatef et al, 2020). IBs and CBs do nonetheless share some similar services.…”

Section: Introductionmentioning

confidence: 99%

Validity of zakat ratios as Islamic performance indicators in Islamic banking: a congeneric model and confirmatory factor analysis

Nomran

Haron

2021

IJIF

View full text Add to dashboard Cite

Purpose There is much debate in the literature about how the performance of Islamic banks (IBs) should be measured. Basically, IBs’ business models are different from that of conventional banks; thus, the performance of IBs should be measured by using a Sharīʿah-based approach. This paper considers zakat (Islamic tax) as an alternative indicator to measure the performance of IBs. This paper aims to examine whether zakat ratios can be used as Islamic performance (ISPER) indicators for IBs besides the conventional performance (COPER) indicators. Design/methodology/approach The investigation covered a sample of 214 yearly observations of 37 IBs located in Indonesia, Malaysia, Bahrain, Saudi Arabia and the United Arab Emirates for the period 2007–2015. This study used a single-factor congeneric model and confirmatory factor analysis, performed using the AMOS 23.0 software. Findings The findings assert that the discriminant validity of multi-bank performance, as measured by ISPER [zakat on assets (ZOA) and zakat on equity (ZOE)] and COPER indicators (return on assets, return on equity and operational efficiency in terms of assets), is very high. Hence, ISPER and COPER measurements are valid, either together to measure the multi-performance of IBs from both the Islamic and conventional perspectives, or independently as each measurement is valid to measure the Islamic and conventional performance if it is used separately. Research limitations/implications This paper does not investigate whether the findings are constant across time. This represents one of the limitations of this study. Practical implications It is strongly recommended that IBs calculate and disclose zakat ratios, particularly ZOA and ZOE, in their annual reports. Researchers and academicians should use these ratios for measuring the ISPER of IBs, either along with COPER or separately. Originality/value Empirical evidence is provided in this paper on the development and validity of zakat ratios as ISPER indicators in the Islamic banking industry. Zakat ratios are suitable indicators that can measure IBs’ performance and achieve the goals of IBs as well as those of Islamic economics. Technically, zakat has a dynamic ability to reflect the profitability of IBs. The more the IBs generate profit, the more they pay zakat. Furthermore, the greater the total assets of IBs, the higher the amount of zakat that they should pay. Thus, zakat ratios can be used as profitability measurements as in the case of tax ratios.

show abstract

The nexus between Islamic banking and industrial production

Cited by 16 publications

References 22 publications

The Role of PLS Financing on Economic Growth: Indonesian Case

The Role of PLS Financing on Economic Growth: Indonesian Case

Optimization of Profit-Sharing Financing at Islamic Banking in Indonesia

Validity of zakat ratios as Islamic performance indicators in Islamic banking: a congeneric model and confirmatory factor analysis

Contact Info

Product

Resources

About