Mohammed Abusharbeh

As the world has been struck with a global financial crisis, Middle Eastern countries have been affected as well. Thus, Islamic banks have expanded, and the competitive advantage has become intensive with the increased number of conventional banks in the global banking system. This manuscript is aimed to examine the impact of macroeconomic and bank-specific factors on Islamic bank financing in the Middle Eastern countries. Therefore, the Vector Error Correction Model and the Granger causality test were run from 2009 to 2018 to detect the long- and short-run relationship between the explanatory variables and Islamic bank financing. The results suggest that both inflation and profitability negatively impact Islamic bank financing in the long run. The paper also revealed bidirectional causality between the variables GDP and bank size and Islamic bank financing. It shows that GDP and bank size are highly dominant factors of Islamic bank financing in the short run. Thus, this paper provides evidence that any short-run shock in the variables of GDP, inflation, and bank size will cause a long-term relationship with Islamic bank financing. This article’s novelty is to ensure resilience within the Islamic banking system during and after the financial crisis. It provides evidence that Islamic banks can cushion their financial activities from economic volatility during the crisis. The results found can be used to predict the growth of Islamic bank financing in upcoming years in the Middle East and all emerging countries.

This paper examined the mediating effect of risk management for strategic planning and profitability of Islamic banks in Palestine. The questionnaires were distributed randomly among 97 directors who have experience in strategic and risk management. A structural equation model was employed to test the research hypotheses. The result revealed that strategic planning and risk management have a significant positive effect on profitability, while strategic planning has a significant positive effect on risk management. In addition, risk management was evidenced to partially mediate the linkage between strategic planning and profitability. The current study yielded support for the claim that risk management played a significant mediating role in the relationship between strategic planning and profitability. Bank directors having good strategic planning and effective risk control tend to get a higher level of profitability. Therefore, Islamic banks should construct a proper strategy in line with their risk management practices and provide a robust risk assessment to protect their financial resources. Ultimately, they can attain superior profitability.

This study aims to examine the impact of board structure on firms’ value in Jordan. Panel regression estimates were used to analyze the data collected from forty-four non-financial firms that listed on the Amman Stock Exchange for the period 2010–2021. Random effects model was applied using a dependent variable (Tobin’s Q), four independent variables (board size, independent directors, female directors, and CEO duality), and four control variables (firm size, age, leverage, and liquidity). The result provides ample evidence that CEO duality exerts a direct positive effect on firm value in Jordan. However, none of the independent variables used has a significant impact on firm value, conflicting with agency and resources dependence theories. Firms value is significantly influenced only by two control variables, i.e., a positive impact of firm size and leverage at the 5% significance level. The results indicate the imperfection of corporate governance compliance by Jordanian listed firms in the area of ensuring maximum firm value. These results could be helpful to the policymakers in Jordanian listed firms to enhance their leadership qualities and satisfy CEO desires to avoid agency conflict.

Capital adequacy plays an important role in the banking system through absorbing potential losses and financial shocks. This study aims to examine the determinants of bank capital adequacy in Arab countries (Bahrain, Egypt, Jordan, Kuwait, Lebanon, Oman, Palestine, Qatar, Saudi Arabia, and UAE). The study uses macroeconomic factors such as economic growth and interest, while bank-specific factors include non-performing loans, profitability, and bank size. This study employed Fully Modified Ordinary Least Square (FMOLS) to examine the panel data from 2017 to 2023. The results showed that annual interest and non-performing loans negatively affect bank capital adequacy, while profitability and bank size positively impact capital adequacy (CAR). In contrast, economic growth has no significant effect on CAR. In addition, as can be seen from pairwise Granger causality, this study provided ample evidence for two ways of causality between the variables of credit risk and CAR, and between profitability and CAR. The results found that Arab banking sectors are compliant with the minimum capital requirements released by Basel Accord III. The findings suggest that bank managers are encouraged to be more selective in credit facilities and consider interest changes while formulating their capital regulations to absorb any potential risk in the banking system.

The purpose of this article is to evaluate the financial soundness of commercial banks listed on the Palestine Exchange using the CAMEL rating system. A content analysis, composite rating, and a one sample t-test are applied to a sample of six local banks operating in Palestine. Secondary data were obtained from the financial statements of the banks for the period of 2007–2017 in order to conduct the research and evaluate their financial performance. The empirical test has shown that Palestinian banks adhere to the Basel Committee standards in terms of capital adequacy and that they display stability in terms of profitability and liquidity. However, the paper concludes that the operational efficiency of the banks being evaluated is “fairly managed”. Finally, the findings indicate significant differences amongst Palestinian banks in terms of performance, assessed using the CAMEL rating system. This paper suggests that the listed Palestinian banks should focus on long-term investments rather than short-term ones, and monitor their risk management practices to increase their profits and move towards sustainability and growth.

Non-life insurance has grown in developing countries over the past decade, despite challenges and large differences in premiums across Arab countries. This study investigates the effect of cultural factors on non-life insurance spending in Arab countries using panel data covering the period from 2010 to 2023. Eight independent variables were employed. They are uncertainty avoidance, individualism, power distance, masculinity, long-term orientation, indulgence, income per capita and interest rate. The results of the study prove that uncertainty avoidance positively influences spending on non-life insurance. The results also show that Arab societies with pragmatic and masculine traits prefer to spend a lot of money on purchasing non-life insurance. However, the results confirm that cultural factors incorporating individualism, power distance, and indulgence negatively impact non-life insurance. Further, the interest rate also negatively affects non-life insurance. In contrast, income per capita has an insignificant impact. These results indicate that insurance companies working in Arab countries should consider those significant factors to improve the quality of insurance services that encompass non-life insurance contracts.