Mosab I. Tabash

Islamic finance has grown rapidly in the recent years particularly in the Middle East and the world. It receives a great attention of bankers and financial scholars due to its stability during financial shocks and crises. The paper uses empirical analysis to test the role of Islamic banking in enhancing the economic growth of United Arab Emirates (UAE). Gross Domestic Product (GDP), Gross formation (GF), and Foreign Direct Investment (FDI) are used as representatives for economic growth, while Islamic banks’ investments are used as a representative for Islamic financial sector in the UAE. The study uses time series techniques to test the link between the variables. In the current study, co-integration along with error correction models is utilized. All econometric work is done using Eviews. The findings reveal that the causal relationship between Islamic banks’ investments and economic growth of UAE is supply-leading direction. Furthermore, the findings depict that Islamic investments have contributed in increasing investments and in bringing FDI into the country in the long-term. The study also shows that there is two-way association between Islamic banks’ investments and FDI. It shows that FDI supports Islamic banking and Islamic banking brings FDI. The paper concludes that authorities of the UAE should devote more attention for this growing banking sector by facilitating regulations for establishing new Islamic banks and then creating a suitable environment for their growth and progress in the UAE.

The banking sector plays a vital role in growth-supporting factor for economic growth in the world’s fastest-growing economies like India. Recently, Islamic banking has become an increasingly popular method for alleviating poverty, financial inclusion and economic development around the world. Its importance is highly needed in developing and emerging countries such as India. The main purpose of the paper is to identify and prioritize the critical impeding factors for Islamic banking growth in India. The study is conducted in two stages: the first stage involves investigating the current literature works regarding the challenges facing Islamic banking industry in India, while the second stage is based on identifying and prioritizing these challenges according to its importance in hindering Islamic banking growth by Analytic Hierarchy Process (AHP). AHP is a multi-criterion decision making tool for organizing and analyzing decisions, based on qualitative and quantitative measures. The results show that the regulatory environmental challenge is the most significant factor among other factors in impeding the growth of Islamic banking in India followed by lack of Islamic banking experts and scholars. The third main challenge is lack of awareness for Islamic banking instruments followed by lack of standardization and the last is lack of cooperation and coordination between Islamic banking authorities. This study is considered the first one to address empirically the challenges facing Islamic banking industry in the world and particularly in India.

This study investigates the impact of political instability, macroeconomic and bank-specific factors on the profitability of Islamic banks in the context of Yemen. The study used two common measures of profitability, namely, Return on Assets (ROA) and Return on Equity (ROE) as dependent variables. Seven key independent (internal and external) variables are also used. There are five fully-fledged Islamic banks (IBs) working in Yemen. The study selected only three out of five IBs due to the availability of data for the period ranging from 2010 to 2014. The descriptive and multiple regression analyses were done. The results of the study indicate that operating efficiency and financial risk have negative and significant relationships with ROA and ROE. The findings also show that capital adequacy has a negative and insignificant relationship with ROA and ROE. Furthermore, the study reveals that assets size (LogA), assets management, liquidity and deposits have a significant and positive impact on banks’ profitability. GDP, Inflation rate (IR) and Political instability have positive and significant impact on Yemeni banks’ profitability. Based on the best knowledge of the authors, this study is considered one of the first and pioneering studies that determine the factors affecting the profitability of Islamic banks of Yemen. Therefore, the study gives good insights for the policy makers, regulators and interested parties for enhancing the profitability of Islamic banks in Yemen.

The main aim of this paper is to evaluate the impact of demonetization on Indian firm’s quarterly financial performance before and after demonetization period (March-December, 2017), and to find out if companies’ age helps to face financial disruption. Four variables, which are net sales, total income, net profit after tax, and earnings per share, were taken as proxies for analyzing the quarterly financial performance of 2,892 companies listed on Bombay Stock Exchange (BSE), National Stock Exchange (NSE), and Calcutta Stock Exchange (CSE). Nonparametric test, particularly Wilcoxon Matched-Pairs Signed Rank Test and Kruskal-Wallis one-way analysis of variance, were applied in analyzing the data. Results reveal that there is a statistically significant difference between the financial performance before and after demonetization at 5% level of significance. It was also found that the decrease/increase in the financial performance of all the firms was affected by the demonetization process, irrespective of their ages. The findings could be useful for financial managers and financial consultants, as they would be able to focus on the issues that matter most at the time of financial disruption.

This article aims to empirically examine corporate governance features and their association with Indian listed companies’ profitability. Thirty-three listed firms are selected from the top 100 companies in India. Corporate governance is defined by two parts: board of directors (size, structure, diligence) and audit committee (size, structure, diligence). In contrast, the profitability of Indian listed firms is calculated by two indicators: return on assets (ROA) and earnings per share (EPS). The outcomes concerning ROA reveal that board diligence, size of audit committee, audit committee composition, diligence of audit committee, and size of a company has a significant relationship with ROA. In contrast, board size and board composition have an insignificant association with ROA. Concerning earnings per share (EPS) model, the results show that size of audit committee, audit committee composition, diligence of audit committee, and firm size have a significant relationship with EPS. In contrast, board size, board composition, and board diligence have an insignificant association with EPS. The results may be of benefit to those scholarly researchers, practitioners, and governors who are interested in exploring the quality of corporate governance practices in an emerging market such as India and its effect on firms’ profitability.

The main purpose of the current study is to examine the impact of Ramadan month on stock returns at the Palestine Exchange (PEX). The study sample consists of all Palestinian public shareholding companies listed in the PEX. The comparison period used in this study consists of 30 days before Ramadan month, 30 days after Ramadan month, and Ramadan month (30 days). This gives a total of 90 days in a year for ten years (2006–2016). The GJR-GARCH technique is used. The results of the study show that Ramadan month has a remarkable effect on the stock returns of the companies in the PEX. The results indicate a significant impact on earnings per share (EPS) in the PEX. Furthermore, there is a positive relationship between the stock returns and the market value in Ramadan month. The profits are increased in the industrial and investment companies due to the high demands in Ramadan month. Therefore, the companies should work to keep a steady performance in the whole year. Besides, the capacity of industrial and investment companies should be increased to meet the high demand in Ramadan month. This study will help Palestinian investors to effectively time their trading. This study is considered one of the pioneering studies that discuss the impact of Ramadan month on the stock returns in the context of Palestine Stock Exchange.

This article aims to measure the level of voluntary disclosure in the published annual reports of Yemeni Islamic banks. Four full-fledged Islamic banks from Yemen are selected for the current study. A disclosure checklist covering 266 items is prepared and a 10-year period, 2005–2014, is taken. The disclosure index items were classified into seven groups, such as basic information on Islamic banks, financial ratios, corporate governance information, financial statements data, corporate social disclosure, Zakat information, and other information that has been taken as an important attribute of voluntary disclosure. The obtained results show that the amount of voluntary disclosure that Yemeni Islamic banking institutions publish in their annual reports has gradually increased over the ten years examined. The results revealed that the highest average disclosure index score over the ten years was achieved by Tadhamon Islamic International Bank (TIIB), the second highest average disclosure score was obtained by Saba Islamic Bank (SIB), and the lowest average voluntary disclosure rating score during the ten years surveyed was achieved by Shamil Bank of Yemen & Bahrain in Yemen during the study period. Substantially, the result of voluntary disclosure scores indicates that the degree of voluntary disclosure by Yemeni Islamic financial institutions has relatively expanded during the ten years investigated. The findings provide new evidence for voluntary disclosure, particularly, Islamic disclosure items. The survey findings can be useful for regulators in Yemen to improve overall disclosure practices by Islamic banks operating in Yemen.

Credit policy plays a vital role in the operational efficiency of credit departments as it reduces the ambiguity of credit departments’ functions by giving clear guidelines and instructions. It also reduces the loan default and speeds up accounts receivable turnover. This paper seeks to evaluate the effect of credit policy on the profitability of pharmaceutical firms listed on the Bombay Stock Exchange (BSE), using a balanced panel data of 82 pharmaceutical firms from 2008 to 2017. The number of days’ collection period and the number of days’ payable deferral period are chosen for measuring firms’ credit policy, while return on assets (ROA) is used for measuring firms’ profitability. It is found that the number of days’ collection period and the number of days’ payable deferral period have a negative and significant effect on the profitability of the pharmaceutical firms, while the control variables leverage, firm size, and age negatively impact the profitability of pharmaceutical firms. Financial managers in pharmaceutical companies should reduce the number of days’ collection period and increase the number of days’ deferral period to reduce the risk of bad debts. Furthermore, they should conduct a credit analysis to evaluate potential clients as it prevents bad debts.

This paper aims to analyze the link between the disclosure of zakat information and the performance of Islamic financial institutions in Yemen. Panel data of three Islamic banks working in Yemen were used. The study used a 16-item disclosure index to measure zakat disclosure information, and the financial performance of banks was calculated using two proxies, such as return on assets (ROA) and return on equity (ROE). Based on secondary data, this study used correlation matrix, descriptive analysis and regression analysis. ROA results revealed that zakat data and the age of a bank significantly affected financial results calculated by ROA, while the size of Islamic banks had an insignificant influence of banking performance. Zakat information and the size of Islamic banks have a positive effect on bank performance, while the age of the bank negatively influences the performance of banks. The results concerning ROE indicated that zakat data and the age of a bank have a strong and significant influence on the performance of banks, determined by ROA, while the size of a bank has a negative and insignificant effect on the performance of banks, determined by ROE.