RSS 1.0Faculty Research and Publications
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Gender, entrepreneurship and the digital divide: a global perspectiveThe concepts and terms defining the thrust of this special issue, i.e. gender, entrepreneurship (Berger et al., 2021), the digital divide (Bowen and Morris, 2019; Millan et al., 2021; Satalkina et al., 2021), Global South (Simaan, 2020) and Global North, are very well established in the literature. Nevertheless, relatively little has been written about (1) the gendered dimension of the digital divide, (2) the digital divide and the gendered dimension of entrepreneurship (Elliott et al., 2021); and finally, (3) the specificity of these topics as they are in the Global South and Global North's peripheries (Ojediran and Anderson, 2020; Wood et al., 2021; Althalathini et al., 2020). Even if research on each of these individual domains exists, relatively little research on the intersection of these three areas exists (but cf. Visvizi et al., 2023, and earlier Kasusse, 2005; Alden, 2003). Notably, given the pace and the pervasive impact of digital transformation globally, and their diverse political, social and economic manifestations, it is necessary that the mechanisms underlying these interconnected issues and developments are identified and explored. This special issue sought to encourage this kind of conversation, always in context of the United Nation's (UN) Sustainable Development Goals (SDGs).
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Testing Monetary Policy Trilemma for Middle Eastern Economies Under a Bayesian Panel VAR SpecificationPurpose: This research aims to investigate the presence of monetary policy trilemma in the Middle Eastern region and evaluate the spillover effects of US monetary policy on the region. Theoretical framework: Middle Eastern economies follow the dollar pegged exchange rate policy with open capital account and this poses a question about the autonomy of the monetary policy stance adopted by the regional central banks. In this context, current research considers variables such as domestic interbank interest rate, domestic liquidity, oil price and federal fund rate to test the monetary policy trilemma in the region Design/methodology/approach: To investigate the presence of monetary policy trilemma in the Middle Eastern region, this research employs the time - varying Bayesian panel vector autoregression approach and selects a panel of five Middle Eastern countries which include Saudi Arabia, United Arab Emirates, Qatar, Oman and Kuwait while considering the monthly data for the sample period 2009m10 until 2021m12. Findings: This research finds that a positive shock in US federal fund rate increases the domestic interest rates in the Middle Eastern economies. In addition, this research finds a negative relationship between oil price shocks and domestic interest rates. Whereas a positive shock in US federal fund rates induces a reduction in the oil price. Research, Practical & Social implications: Current research provides insights for policy makers to determine the autonomy of domestic monetary policy stance to achieve its broader macroeconomic objectives. Originality/value: This research is unique as it examines the monetary policy trilemma while considering oil price as a control variable in the system under a time varying Bayesian panel vector autoregression specification.
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Making Housing Affordable Through Solar Energy: A Proposal for MalaysiaGlobally, housing affordability is becoming an increasing concern, particularly to the low and middle-income group. Housing priceshavebeen steadily growing over theyears, therebymake it even more burdensome,particularly for fresh graduates and low-income earners (B40),to own a home. The constant price increaseis mainly due to inflation in the property sector brought about by the very nature of the modern monetary system, particularly the fractional reserve banking andcompound interest charges, leading to housing and property bubbles. Accordingly, governments have generally failed in successfully solving the housing problem. In this regard, this paper provides an affordable housing solution through solar energy harvesting combined with Islamic financing provisions for the case of Malaysia. In our proposed model, housing can be provided in a very affordable manner regardless of the credit-worthiness of buyers with the possibilityof free-energy at the end of the tenure.
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Safe haven property of gold and cryptocurrencies during COVID-19 and Russia-Ukraine conflictDuring recent years the world has witnessed several unprecedented crises that affected the international financial markets. Indeed, the COVID-19 pandemic and the Russia–Ukraine conflict caused major perturbations that slowed down the economic and financial development around the globe. International investors are switching their attention to more reliable assets as a refuge to their portfolios. This paper investigates the hedge and safe haven properties of gold and major cryptocurrencies, mainly Bitcoin and Ethereum. Empirical analysis is conducted on main fiat currencies using the multivariate asymmetric dynamical conditional correlation model. Results show that gold has a superior hedging effectiveness compared to cryptocurrencies. Moreover, the precious metal and the digital currencies are safe havens for almost all fiat currencies.
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Extending the concept of financial literacy: A step toward a sustainable societyThis study analyzes financial literacy in Bosnia and Herzegovina by considering three areas: interest, inflation, and diversification, with financial literacy as a multi-dimensional construct consisting of financial knowledge and financial skills. Using a cross-sectional questionnaire-based survey, 638 valid responses were collected from working-age individuals (18-65 years old). Financial knowledge and skills were analyzed through a prism of several demographic factors, including age, education, household income, and gender. Welch's F tests, ANOVA with Brown-Forsythe, LSD post hoc tests, and Welch's t-tests were performed to test the hypotheses. The findings provide evidence of moderate financial literacy. Similarly to previous studies, financial knowledge and skills partially depend on the respondent's age, education, household income, and gender. The study contributes to the current literature by taking a much-needed non-functional approach to examining financial literacy, focusing not only on financial knowledge but also on often neglected financial skills and providing insight into the unique context of Bosnia and Herzegovina.
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Dependence and risk management of portfolios of metals and agricultural commodity futuresThis paper examines the dependence structure and the portfolio allocation characteristics of a main industrial portfolio metals (gold, platinum, palladium, aluminum, silver, copper, zinc, lead, and nickel), and of an agricultural commodities portfolio (wheat, corn, soybeans, coffee, sugar cane, sugar beets, cocoa, cotton, and lumber). Our methodology is based on regular vine copulas and the conditional Value-at-Risk. The motivation to investigate the dependence structure and connectedness between agricultural, and metal commodities is to identify ways in which agricultural and metal commodities can hedge each other and to explore the possibilities of parallel investments. The results indicate that the dependence dynamics of the main metals portfolio are characterized by symmetric features. However, the dependence dynamics of the agricultural commodities portfolio are characterized by symmetric and asymmetric features; symmetric dynamics are predominant. Finally, the metal commodities portfolio is observed to be less risky for financial resource allocation during the global financial crisis.
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Finance-Growth Nexus: Evidence from Systemically Important Islamic Finance CountriesPurpose The purpose of this study is to examine the effects of financial development on the economic growth of jurisdictions with systemically important Islamic finance. Design/methodology/approach The authors use several estimation methods. The primary analysis is based on the LSDVC method using a sample of 23 countries covering the period of 2000–2019. Findings The findings suggest that the financial sector may not be a significant factor in determining economic growth, or that it may decrease it depending on the proxy used. These results are in line with recent studies and robust across different estimation specifications and methods used. Practical implications Finance practitioners may reconsider the way they conduct their daily activities as their impact on economic growth is fading away. Similarly, policymakers should consider the role that financial development plays in economic growth alongside other factors that may influence its impact. It may be necessary to examine the moderating effects of institutional development on the relationship between finance and growth and consider the channels through which financial development can contribute to economic growth. Additionally, it would be useful to study the impact of Islamic finance on economic growth using different data sources. Originality/value Although the topic has been explored using different data sets and focusing on different samples, it has not been explored considering the impact of Islamic finance development on economic growth. Given the global appeal of the Islamic finance industry, it is worth investigating its significance for economic growth.
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Dependence and risk management of portfolios of metals and agricultural commodity futuresThis paper examines the dependence structure and the portfolio allocation characteristics of a main industrial portfolio metals (gold, platinum, palladium, aluminum, silver, copper, zinc, lead, and nickel), and of an agricultural commodities portfolio (wheat, corn, soybeans, coffee, sugar cane, sugar beets, cocoa, cotton, and lumber). Our methodology is based on regular vine copulas and the conditional Value-at-Risk. The motivation to investigate the dependence structure and connectedness between agricultural, and metal commodities is to identify ways in which agricultural and metal commodities can hedge each other and to explore the possibilities of parallel investments. The results indicate that the dependence dynamics of the main metals portfolio are characterized by symmetric features. However, the dependence dynamics of the agricultural commodities portfolio are characterized by symmetric and asymmetric features; symmetric dynamics are predominant. Finally, the metal commodities portfolio is observed to be less risky for financial resource allocation during the global financial crisis.
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A Model Of A Shariah Compliant Credit Clearing System To Facilitate Working Capital Management For Micro, Small And Medium EnterprisesPalArch's Journal of Archaeology of Egypt / Egyptology ABOUT EDITORIAL TEAM INDEXATION CURRENT ARCHIVES SUBMISSIONS PUBLICATION ETHICS Search SEARCH Register Login HOME / ARCHIVES / VOL. 18 NO. 13 (2021): SPECIAL EDITION BOOK SERIES 1: EFFAT UNIVERSITY'S FINANCE AND ECONOMY PAPERS / Articles A MODEL OF A SHARIAH COMPLIANT CREDIT CLEARING SYSTEM TO FACILITATE WORKING CAPITAL MANAGEMENT FOR MICRO, SMALL AND MEDIUM ENTERPRISES Authors Mohamed Mahees Raheem Ahamed Kameel Mydin Meera Abideen Adeyemi Adewale ABSTRACT MSMEs enhance competition through economy-wide entrepreneurship, encouraging innovation and improving efficiency as their industries grow. In an increasingly globalized marketplace, it is important for local MSMEs to remain competitive in order to survive. Due to their size, they face many problems with regards to business operations. One of the main problems is access to financing for working capital management. The paper identifies the main problems faced by local MSMEs in raising finance to meet their working capital requirements, and also discusses the usage of trade credit within local MSMEs, and its impact on working capital management. The paper then proposes an alternative credit-clearing strategy that utilizes currency is backed by trade credit that can be employed by MSMEs to boost their liquidity positions. The proposed system directly benefits MSMEs, clearing houses, banks and local governments. In addition, this research also discusses alternative income generation methods for clearing houses, potential problems and remedies, and Shariah compliance
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A Concept For Funding Universal Basic Income Through A “National Waqf” SchemeModern governments are constantly seeking innovative ways of funding welfare programs for the wellbeing of their citizens. These methods may range from traditional welfare schemes to radical initiatives. One of the ideas that is gaining traction to this measure is universal basic income (UBI), which basically refers to a monthly payment that is given to all citizens, regardless of their income levels, economic and employment status. However, the main difficulty in the implementation of UBI is its funding. At the same time, the traditional Islamic concept of waqf (Islamic endowment) is also a sector that is underutilized, with a great potential to provide welfare for citizens. This paper seeks to provide a solution to both the funding of UBI and revitalization of the waqf sector.
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Company online presence and its effect on stock returnsThis paper investigates the relationship between stock prices and the online presence of companies. Mainly, we study the effect of the online presence of a company on its subsequent stock returns. Moreover, we examine the impact of companies’ engagement efforts and the popularity of their search-engine keywords on their stock returns. Based on the companies listed on the Dow Jones industrial average index, results suggest that stock returns are impacted by a change in online presence, as measured by search volumes. Nevertheless, the online engagement efforts show no significant relationship with the stock returns.
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The Role of Sukuk in Sustainable DevelopmentSukuk: Driving Sustainable Economic Development Abstract Sukuk, or Islamic bonds, have gained popularity as a Shariah-compliant approach for enterprises to obtain capital. In accordance with the principles of Islamic finance, Sukuk plays a key role in supporting sustainable development in addition to its financial rewards. Sukuk may assist fund initiatives that benefit society as a whole, increase risk-sharing among investors, and promote financial inclusion. A recent example of a green Sukuk issued by the Indonesian government highlights the capacity of Sukuk to fund environmentally beneficial initiatives. Sukuk may also be used to alleviate some of the issues that traditional finance faces, such as financial crises, and to enhance accountability and transparency in financial transactions. This article examines the relevance of Sukuk in Islamic finance and its role in sustainable development. This study focuses on the function and influence of Sukuk on human welfare and sustainable development. To attain human well-being and sustainable development, Sukuk investments must be for the benefit of everyone, including people, institutions, society, and the whole nation. The research shows that Shari'ah supervisory boards should focus more on the content when developing Sukuk in order to assist Islamic finance in reaching Maqasid AlShari'ah. Keywords: Sustainable development Maqasid AlShari'ah, Sukuk, Islamic finance, human well-being, safeguarding wealth.
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Company online presence and its effect on stock returnsThis paper investigates the relationship between stock prices and the online presence of companies. Mainly, we study the effect of the online presence of a company on its subsequent stock returns. Moreover, we examine the impact of companies’ engagement efforts and the popularity of their search-engine keywords on their stock returns. Based on the companies listed on the Dow Jones industrial average index, results suggest that stock returns are impacted by a change in online presence, as measured by search volumes. Nevertheless, the online engagement efforts show no significant relationship with the stock returns.
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The effects of interest rate on Islamic bank financing instruments: cross-country evidence from dual-banking systemsIn theory, the cornerstones of Islamic finance are interest avoidance and risk-sharing. In practice, however, Islamic banks seem to be lacking both, particularly the latter. We investigate the interest rate impact on Islamic banks' three most-widely used types of financing instruments – i.e. sale-based, lease-based and risk-sharing – by employing the system GMM estimators on a unique panel data set of 77 Islamic banks from 13 countries over the period 2003–2017. We find that sale- and lease-based financing instruments are negatively correlated with the interest rate and that their exposure is amplified in more developed Islamic banking jurisdictions. Risk-sharing instruments, however, appear to be out of the interest rate domain of influence except in less developed Islamic banking jurisdictions, where the impact is positive. Additionally, the above effects on sale-based and risk-sharing instruments hold true only in the case of full-fledged Islamic banks and Islamic bank subsidiaries, respectively; the impact on lease-based instruments hold under all specifications. The findings imply that predominant use of sale- and lease-based financing instruments in their current form undermines the interest-free and risk-sharing essence of Islamic banking and runs the risk of converging with its conventional counterpart.
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The (mis)use of al-Hilah (legal trick) and al-Makhraj (legal exit) in Islamic financePurpose The purpose of this paper is to discuss the concepts of hilah (legal stratagem or legal trick) and makhraj (legal exit) and to examine their relevance and application in the contemporary Islamic financial services and products. Design/methodology/approach This paper uses the qualitative research approach to provide a theoretical overview of hilah and makhraj literally and technically and to examine their practical applications in Islamic financial products and services. In particular, this paper evaluates several Islamic financial contracts and examines its practices in light of the implications of hilah or makhraj. Findings The paper finds that there is a glaring difference in perception and application of hilah and makhraj, as argued by some scholars. It has been found that the principle of hilah has been extensively used in the Islamic finance industry as a way to circumvent the riba prohibition. For example, Islamic financial instruments such as bay’ bithaman al-ajil, bay’ al-‘inah, tawarruq, commodity murabahah, musharakah mutanaqisah and, in some cases, the sale and lease back sukuk are found to be tainted by hilah. Research limitations/implications Because this is a theoretical paper, it should be explored in more detail, and critical analysis of Islamic financial services and products should be reviewed in line with these two principles to ascertain if the products and services are in line with Shariah requirements and devoid of hilah practices or not and to align the industry with the maqasid al-Shariah. Practical implications This paper identifies a serious challenge that Islamic finance practitioners face in product development in their effort to provide more competitive services to their customers. As a result, it demonstrates the need to proactively use makhraj in innovating Islamic financial products and proffering more sustainable and competitive solutions. Originality/value This paper discusses a topic that attempts to dispel the suspicious perceptions of some analysts as to the genuineness of Islamic financial practices.
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Development of Islamic Finance in Bosnia and HerzegovinaThis paper represents the analysis of Islamic finance development in Balkan with a case study of Bosnia and Herzegovina (B&H). In this analysis we will use the data from the local Islamic financial institutions and global reports with regard to the Islamic finance industry. Since Islamic finance has been practiced in B&H for years, its development has seen a remarkable success. Islamic banking, led by Bosnia Bank International (BBI), is the major player in the field. However, the industry faces a number of issues and challenges that impede its further development. Among major issues are a lack of legal and regulatory framework(s), a low level of public awareness about Islamic finance that leads to a low demand for its products, and a lack of government support for its development. Thus, in order for Islamic finance to develop further within the Balkan countries there is a need for a better promotion, legal and regulatory framework that will facilitate this endeavor and new players that will increase competition and add additional value to this market.
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Bank Concentration and Economic Growth Nexus: Evidence from OIC CountriesThis paper examines the relationship between bank concentration and economic growth in Organization of Islamic Cooperation (OIC) countries. This is done using the system GMM estimators on a panel data sample consisting of 41 countries and 650 observations. Our analysis reveals that bank concentration has negative impact on economic growth and this relationship is non-linear. Furthermore, the impact of bank concentration on economic growth is found to be dependent on the country’s income and corruption levels. Therefore, it seems reasonable to conclude that bank concentration has negative impact on the economic growth in OIC countries.
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Impact of Bank Concentration and Financial Development on Growth Volatility: The Case of Selected OIC CountriesThis study investigates the impact of bank concentration and financial development on economic volatility for the Organization of Islamic Cooperation (OIC) member countries. Employing dynamic panel models, we find no evidence that bank concentration is significantly related to economic volatility when it is entered independently in the models. Meanwhile, financial development lowers economic volatility. Extending the models to include market structure–financial development interaction, we note that the impact of bank concentration on volatility depends on the level of financial development within OIC countries. More specifically, the volatility-increasing effect of bank concentration tends to be moderated by financial development. Accordingly, in the wake of banking sector consolidation in these countries, policymakers and regulators in OIC countries should focus on further developing their financial markets such that the negative consequences of resulting market concentration can be mitigated.
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The FDI and Economic Growth in the Western Balkans: The Role of InstitutionsThis study explores the impact of foreign direct investment (FDI) and institutional quality on the economic growth of the Western Balkan economies – Albania, Bosnia and Herzegovina, Montenegro, North Macedonia, and Serbia. The conventional wisdom says that FDI plays a significant role in economic development and that institutional development may also affect this relationship. Using a panel data analysis for 20 years (2000-2019) and in contrast to this conventional wisdom, the study shows that FDI significantly negatively impacts growth within the sample countries. At the same time, the results indicate that institutional development has a significantly negative or no role on growth directly. The results depend on the proxy used for institutional development. Furthermore, when FDI and institutional development measures interact, both indicators become insignificant, including their interaction terms. This may be because the institutions within the sample countries are at low levels of development to make any significant impact on either growth or FDI-growth relationship.
