Ph.D. Finance, University of Delhi, India
MBA, Islamic University of Gaza, Palestine
Bachelor of Industrial Engineering, Islamic University of Gaza, Palestine
Financial Management,, Financial Markets, Islamic Finance, Monetary Policies, Corporate Governance, Financial Performance and Bank Sustainability.
- Farooq, U., Wen, J., Tabash, M. I., & Fadoul, M. (2024). Environmental regulations and capital investment: Does green innovation allow to grow?. International Review of Economics & Finance, 89(1), 878 - 893.
- Tabash, M. I., Billah, M., Kumar, S., Alam, M. K., & Balli, F. (2023). Analysis of the frequency dynamics of spillovers and connectedness among Islamic and conventional banks and their determinants: evidence from Gulf Cooperative Council (GCC) markets. Applied Economics, 50(50), 5895-5924.
- Tabash, M. I., Farooq, U., El Refae, G. A., & Qasim, A. (2023). Exploring the carbon footprints of economic growth, foreign investment, energy dependency and financial development: does EKC work in GCC region?. Management of Environmental Quality: An International Journal, 34(2), 273-289.
- Tabash, M. I., Farooq, U., Ashfaq, K., & Tiwari, A. K. (2022). Economic policy uncertainty and financing structure: A new panel data evidence from selected Asian economies. Research in International Business and Finance, 60(1), 1-15.
- Tabash, M. I., Mesagan, E. P., & Farooq, U. (2022). Dynamic linkage between natural resources, economic complexity, and economic growth: empirical evidence from Africa. Resources Policy, 78(1), 1-9.
- Ashraf, B. N., Tabash, M. I., & Hassan, M. K. (2022). Are Islamic banks more resilient to the crisis vis-à-vis conventional banks? Evidence from the COVID-19 shock using stock market data. Pacific-Basin Finance Journal, 73(1), 1-22.
- Wen, J., Farooq, U., Tabash, M. I., El Refae, G. A., Ahmed, J., & Subhani, B. H. (2021). Government green environmental concerns and corporate real investment decisions: Does financial sector development matter?. Energy Policy, 158(1), 112585.
- Tabash, M. I., Akinola, A. O., & Abousamak, A. (2021). Corporate Governance and Financial Performance of Quoted Deposit Money Banks in Nigeria: An empirical investigation. African Journal of Business & Economic Research, 16(3), 1-12.
- Tabash, M.I., Al-Homaidi, E.A., Ahmad, A., Farhan, N.H.S. (2020). Factors affecting financial performance of indian firms: An empirical investigation of firms listed on bombay stock exchange. International Journal of Economic Policy in Emerging Economies, 13(2), 52-172.
- Almaqtari FA, Al‐Homaidi EA, Tabash M. I, Farhan NH. (2019). The determinants of profitability of Indian commercial banks: A panel data approach. International Journal of Finance and Economics.24(1),168-185.
- Tabash, M. I. (2018). Islamic financial investments and economic growth evidence from emerging economy, United Arab Emirates. Int. J. Economics and Business Research, 15(1),125-139.
Financial Management, International Financial Management, Risk Management, Investment Management, Research Methodology, Operations Research.
Expertise related to UN Sustainable Development Goals
In 2015, UN member states agreed to 17 global Sustainable Development Goals (SDGs) to end poverty, protect the planet and ensure prosperity for all.
This person’s work contributes towards the following SDG(s):
1. International Society for Development and Sustainability
2. International Higher Education Teaching and Learning Association (referred to as HETL), UAE Director.
Published in: Cogent Business and Management
Sep 01, 2020
The purpose of this study is to find out the impact of awareness, privacy & safety, cost, convenience, social influence, and habits on the adoption of IoT in Indian banks. The sample size of 467 Indian customers has been taken for the study. The Confirmatory Factor Analysis (CFA) is applied for testing the reliability and validity as well as the suitability of the questionnaire for the research. Moreover, the Structural Equation Modeling (SEM) model is used for testing the hypotheses of the study, both CFA model fit and SEM model indices are found satisfactory in comparison with recommended values. The results reveal that convenience, social influence, privacy & safety, and awareness have a significant impact on the adoption of the internet of things in Indian banks. On the other hand, the results show that cost & habits do not have an influencing impact on the adoption of IoT. The current study is an attempt to examine the adoption of the internet of things in Indian banks. In India, there is a huge scope of application of IoT in different sectors as India is aiming at being a developed country and no doubt, such kind of technology in the banking services can be a basis for it. The current paper is an attempt to help the policymakers as well as the producers of IoT objects to create that kind of service in the banks that can be easily adoptable and beneficial to the public.
Green product as a means of expressing green behaviour: A cross-cultural empirical evidence from Malaysia and Nigeria
Published in: Environmental Technology and Innovation
Aug 07, 2020
Due to overconsumption, there is no significant urgency than the climate emergency for the publicity of green products that may conceivably led to reducing environmental impact. Considering the limited studies as a means of comparing green behaviour and its determinant in developing nations, this study focused on environmental awareness, attitude and perceived behavioural control (PBC) by applying the measurement of impacts on green behaviour. It further examined the role of green culture as a contributor. A total of 280 responses from Kuala-Lumpur, Malaysia and 267 responses from Abuja, Nigeria were obtained via questionnaire distribution among citizens (age 18–32). SmartPLS3.0 and SPSS v22.0 were applied for statistical analyses. To request responses that we could not have anticipated, we utilized an open-ended format, accompanied by closed-ended format so we could compare the responses of the two sets samples. In both sets, we found 13% and 8% purchases organic food and energy-saving products in Malaysia while 24% and 8% purchases the same categories of products in Nigeria. We also found 40% of consumers in Malaysia purchased green products because of environmental benefit while 54% of consumers in Nigeria purchased green products because of health benefits. The path analyses result shows that attitude and green culture had a higher influenced on green behaviour in both nations. However, the propensity of green behaviour does not depend on economic development, for the reason that Nigeria had a higher mean value than Malaysia. PBC was found to be a contributor to Nigerian citizens with the least important for Malaysian citizens. Awareness interaction between green behaviour and green culture was insignificant for both country citizens. The study suggested that environmental education is important among citizens. Policy implications for these findings are further considered in the study.
An empirical examination of the impact of country-level corporate governance on profitability of Indian banks
Published in: International Journal of Finance and Economics
Aug 05, 2020
The main aim of the present study is to examine the impact of country-level corporate governance on the profitability of Indian banks using a sample of 61 banks that is, 42 private and 19 public banks. The study employs descriptive statistics, correlation analysis, regression analysis of two-way variable intercept random effect model, and robustness checks including robust regression, Generalized Methods of Moments, and Panel Correction Standard Error. The results reveal that country-level corporate governance has a significant impact on the profitability of Indian banks. Private banks demonstrate better performance over public banks and the effect of country-level governance on the profitability of private banks is positive and it is better than public banks. Further, the results show that demonetisation has a significant negative impact on the profitability of Indian banks as measured by Return on Assets and Return on Equity, but it also has a significant positive effect in the case of Net Interest Margin. The findings of the current study have considerable implications for regulators, policymakers, bankers, analysts, and academicians. Regulations and several policy measures could be introduced to improve the profitability of Indian banks. To promote greater transparency, better accountability, strong rule of law, and corporate governance, corruption must be eliminated to enhance higher profitability of Indian banks. This paper presents novel evidence linking country-level corporate governance to the profitability of banks in the context of India, as an emerging economy. Therefore, it bridges an existing gap in the body of literature on the profitability of banks in India
Factors affecting financial performance of indian firms: An empirical investigation of firms listed on bombay stock exchange
Jul 07, 2020
The aim of this study is to examine the factors that influence the financial performance of Indian listed companies during the period ranging from 2010 to 2016. The sample size consists of 1598 companies listed in Mumbai Stock Exchange (MSE) in India. Return on assets (ROA), return on equity (ROE), profit after tax (PAT) and earning per share (EPS) are used as proxies for financial performance of Indian firms. The fixed effects regression model results revealed that the leverage ratio, liquidity ratio, size of company and company age have a significant and positive influence on the financial performance of Indian listed companies. The leverage ratio has a positive impact on return on equity (ROE) and negative effect on return on assets (ROA), profit after tax (PAT), and earning per share (EPS). The study recommended that managers should consider the leverage ratio in such a way that improves firms' financial performance. The current study provides useful insights for managers, analysts, regulators, investors, and other interested parties in the performance of Indian listed firms
Family ownership concentration and real earnings management: Empirical evidence from an emerging market
Published in: Cogent Economics and Finance
Apr 07, 2020
The paper examines the effect of family ownership concentration (FMOC) on real earnings management (REM) in manufacturing firms listed on Bursa Malaysia (formerly known as Kuala Lumpur Stock Exchange). Data are gathered from 1,056 firm-year observations for the four-year period from 2013 to 2016. The feasible generalised least square estimation is used to examine the relationships. The results show that FMOC is negatively and significantly associated with REM. This evidence supports the alignment hypothesis that FMOC mitigates managerial earnings management by preventing real activities manipulation. However, the finding of the current study is contrary to the claim that family-controlled firms have lower earnings quality. This study extends previous empirical research by examining the effect of different levels of family control on REM in an emerging market and provides evidence that family firms have less incentive to engage in REM practices. The findings imply that earnings reported in the financial statements of Malaysian manufacturing family firms are more reliable as these firms do not manipulate earnings through real business activities. Policymakers may consider the results of the current study that show family-controlled firms have the motivation to self-monitor their business and avoid earnings manipulation activities. Investors may benefit from this evidence and invest in family firms. Future studies may extend the sample to cover other sectors to check the consistency of the findings. In addition, the paper uses data from Malaysia, a country characterised as a family-controlled market. Thus, the findings may not be similar to those of countries with lower FMOC.
The relationship between credit policy and firms' profitability: Empirical evidence from Indian pharmaceutical sector
Published in: Investment Management and Financial Innovations
Mar 10, 2020
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.
Published in: International Journal of Business Excellence
Sep 11, 2019
The purpose of this paper is to systematically synchronise the development of Shari'ah governance in the light of Islamic epistemology. The paper explores governance from the Islamic point of view by referring to various verses from the Holy Qur'an. Also, the paper enumerates the Ps of Islamic governance through shedding light on the teachings of the Holy Qur'an. An in-depth literature review is done to identify the enablers of Shari'ah corporate governance model. Furthermore, interpretative structure modelling (ISM) is applied to propose a Shari'ah governance model for all Islamic countries and countries that follow Islamic banking system. The key variables are identified with the help of MICMAC analysis. The results reveal that there are various conflicting issues that exist among business operations of the Islamic financial industry. One of the issues is lacking uniformity regarding considerations related to Halal/Haram transactions. The paper suggests a suitable model for implementing Shari'ah governance and making it globally acceptable.
The impact of corporate governance on financial performance of Indian and GCC listed firms: An empirical investigation
Aug 22, 2019
Corporate governance plays a vital role in creating a corporate culture of consciousness, transparency, and openness. In this context, this paper provides a brief view about the background of corporate governance mechanisms in India and Gulf Corporation Council (GCC) countries, corporate legal system and monitoring policies laid down by Indian and GCC governments. Furthermore, it analyzes the impact of corporate governance mechanisms on the financial performance of Indian and GCC listed firms. The study uses a sample that consists of 53 non-financial listed companies from India and 53 non-financial listed companies from GCC countries for the period 2009–2016. Results revealed that board accountability (BA) and audit committee (AC) have an insignificant impact on firms' performance measured by ROE and Tobin’s Q. Similarly, transparency and disclosure (TD) have an insignificant negative impact on firms' performance measured by Tobin’s Q. Moreover, the country dummy results show that Indian firms are performing better than Gulf countries ones in terms of corporate governance practices and financial performance. The current study is considered as a battery for further research and studies particularly in India & GCC listed firms in the context of corporate governance and financial performance.
Published in: Cogent Economics & Finance,
Jan 03, 2019
The aim objective of this study is to examine the liquidity determinants of Indian listed commercial banks. The study has applied both GMM and pooled, fixed and random effect models to a panel of 37 commercial banks listed on the Bombay Stock Exchange (BSE) in India for the period from 2008 to 2017. The banks’ liquidity (LQD) was taken as a dependent variable which functioned against both bank-specific and macroeconomic determinants. The results indicated that among the bank‐specific factors, bank size, capital adequacy ratio, deposits ratio, operation efficiency ratio, and return on assets ratio are found to have a significant positive impact on LQD, while assets quality ratio, assets management ratio, return on equity ratio, and net interest margin ratio are found to have a significant negative impact on LQD. With respect to macroeconomic factors, the results indicated that interest rate and exchange rate are found to have a significant effect on LQD. The Reserve Bank of India (SBI) should give benchmarks for the above mentioned ratios to achieve smooth liquidity of commercial banks in India. The study recommended that bankers should consider assets quality in such a way that improves banks’ performance. Finally, the current study provides useful insights for bankers, analysts, regulators, investors, and other interested parties on the liquidity of listed commercial banks.
The impact of oil price volatility, gross domestic product, foreign direct investment on islamic banking investments: An empirical evidence of the United Arab Emirates
Published in: International Journal of Energy Economics and Policy
Oct 15, 2018
The current paper examines the impact of oil price (OP) fluctuations on Islamic banking investments growth in the UAE. Besides, OP, the study also uses other variables like Gross Domestic Product and Foreign Direct Investment to identify the determinants of the Islamic banking investments growth in the emerging economy, UAE. The study is based on econometric analysis with the help of annual time series data from 1990 to 2015 for the study variables. Stationary tests, cointegration methods, vector error correction model, and Granger causality tests are used in the analysis. The major findings of the study revealed that OPs have long-term and short-term relationships on the Islamic banking investments in the UAE. Our results explore the importance of OP stabilization in enhancing growth and progress in the UAE economy. The Government of UAE should reform policies and procedures to minimize the effect of such volatility in OPs which in turn leads to positive impacts on the UAE economy as well.
empirical investigation between liquidity and key financial ratios of Islamic banks of United Arab Emirates (UAE)
Published in: Business and Economic Horizons
Oct 10, 2018
This paper empirically analyzes the impact of liquidity risk on key financial performance aspects of Islamic banks in the UAE. To document the association between liquidity risk and other performance ratios, time series data are taken for full-fledged Islamic banks working in the UAE from 2000 to 2014. Liquidity ratios and capital adequacy ratios, profitability ratios, and tangibility ratios are determined. Correlation and regression analyses are used to test the study hypotheses using SPSS. The findings indicate that capital adequacy and tangibility ratios are the main factors to determine liquidity risk of UAE Islamic banks. Furthermore, the results showed that the size of Islamic banks’ assets and capital adequacy had a positive and significant association with liquidity risk. Policymakers and Islamic finance experts should devote more attention to enhancing the base of Islamic finance assets to manage liquidity issues.
Published in: International Journal of Finance and Economics
Oct 04, 2018
The current study examines the determinants of profitability of Indian commercial banks. The analysis is conducted over a period of 10 years in which the Indian banking sector has gone under different changes such as demonetization and issues related to banking sector sustainability and banking sector frauds. The analysis is based on balanced panel data over a period ranging from 2008 to 2017 for 69 commercial Indian banks. Profitability of Indian banks is measured by two proxies, namely, return on assets (ROA) and return on equity (ROE), whereas bank size, assets quality, capital adequacy, liquidity, operating efficiency, deposits, leverage, assets management, and the number of branches are used as bank‐specific factors. Further, a set of macroeconomic determinants such as gross domestic product, inflation rate, interest rate, exchange rate, financial crisis, and demonetization are used as independent variables. Stationary test along with pooled, fixed, random effect models and panel correction standard error are used in this study. The results revealed that bank size, the number of branches, assets management ratio, operational efficiency, and leverage ratio are the most important bank‐specific determinants that affect the profitability of Indian commercial banks as measured by ROA. Furthermore, among the bank‐specific determinants, the results revealed that bank size, assets management ratio, assets quality ratio, and liquidity ratio are found to have a significant positive impact on ROE. With regard to the macroeconomic determinants, the results revealed that the inflation rate, exchange rate, the interest rate, and demonization are found to have a significant impact on ROA. However, in the case of ROE, the results show that all ma
Published in: Investment Management and Financial Innovations
Aug 08, 2018
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.
Identifying critical success factors for sustainable growth of Indian banking sector using interpretive structural modeling (ISM
Published in: International Journal of Social Economics
Aug 03, 2018
Purpose The purpose of this paper is to identify the critical success factors for sustainable growth of the Indian banking sector and develop a model for Indian banks by using interpretive structural modelling (ISM). It suggests some of the critical measures of sustainability for Indian banks. Design/methodology/approach This paper aims to establish a relationship among the factors of sustainable banking through the opinion of experts from the banking sector. ISM approach is applied to bring down the complexity of relationship among factors. ISM ranked the factors as per their ability to facilitate and dependence on other factors and helps to develop a comprehensive, systematic model based on the relationship amongst those factors. After developing the model, second reviews by the experts are conducted for their comments and thus, the final model comes into existence. Findings Legal and environmental compliance is determined as the key factor which is driving the other factors of sustainable banking. It will surely going to pose a challenge for business concerns for initiating various sustainable steps that will be a motivational factor for generating business opportunities and sustainable collaboration. Practical implications The study provides a comprehensive framework of sustainable banking which can be applied to various Indian banks. It helps to develop coherence between conventional and sustainable dimensions of banking. Originality/value The ISM is applied for the first time in case of sustainability in the banking sector to bring about a model for sustainable banking in India.
The role of tribalism as mediator between employee empowerment and organizational commitment in Yemeni Islamic banking sector
Apr 04, 2018
This study examined the influence of employee empowerment on organizational commitment, and the level to which Tribalism plays a role in the relationship between the former two variables in the context of Islamic banks in Yemen. Indeed, the rationale for introducing employee empowerment is to increase levels of employee’s commitment to ensue positive outcomes. The interrelationships between the variables were analyzed to develop a strategy for increased organizational commitment in the Yemeni Islamic banking sector. This study used a social exchange theory to illustrate the study framework to link the relations between employee empowerment, organizational commitment, and Tribalism. This study relied on quantitative approaches. The study sample comprised of Yemeni Islamic banks’ employees. 450 questionnaires were distributed to employees, out of which, 292 were retrieved and deemed usable for analysis, constituting a 65% rate of response. The partial least squares structural equation modelling (PLS-SEM) was employed to analyze data and test the proposed hypotheses. The results indicated that there is a significant relationship between empowerment of the employees and their organizational commitment in Islamic banks in Yemen. More importantly, this study revealed that Tribalism is a significant mediator on the relationship between employee empowerment, and organizational commitment.
Islamic financial investments and economic growth evidence from emerging economy, United Arab Emirates
Published in: International Journal of Economics and Business Research
Jan 04, 2018
The paper examines the role of Islamic banking investments in enhancing the emerging economic growth of United Arab Emirates (UAE). The study uses annual time series data to examine the relationship between the variables. Autoregressive distributed lag (ARDL) framework is utilised for co-integration along with error correction models. The findings indicate that in the long-term Islamic banks’ investments have contributed to the economic growth of UAE. It shows that when Islamic investments increase, the economic growth also increases in a positive way. Granger causality test results depict a positive and statistically significant relationship between economic growth and Islamic banks’ investments in both the short-run and in the long-run as well. It reveals that the causal relationship between Islamic banks’ investments and the economic growth of UAE is a supply-leading direction. The paper concludes that the United Arab Emirates Government should support the growth of Islamic banks since they approve their impacts on the UAE economy.
Financial Performance Comparison of Islamic and conventional banks in the United Arab Emirates (UAE)
Nov 21, 2017
This paper examines the financial performance of Islamic and commercial banks in the United Arab Emirates (UAE). The paper gives an empirical insights and comparisons between the performance of Islamic and conventional banking sectors. The sample of the study consists of 5 fully-fledged Islamic banks and 14 conventional banks working in the UAE under the period 2011-2014. The study uses descriptive analysis, correlation, independent sample t test and multiple regression analysis to assess the performance and to compare between both types of banks. The Return on Assets (ROA) is used as proxy for profitability for both types of banks while bank size (log A), liquidity, capital adequacy, financial risk and operating efficiency as proxies for financial performance for both types of banks. The results showed that there is no significant difference between Islamic banks and conventional banks in terms of profitability (ROA) while there is a significant difference between Islamic and conventional banks in terms of liquidity, operation efficiency, capital adequacy, and financial risk. Further, the results indicated that the Islamic banks have higher operating efficiency, bank size and more liquidity than their counterparts of UAE. However, conventional banks are found to have better capital adequacy ratio than Islamic banks. In terms of financial risk, Islamic banks are found to have higher five times than conventional banks which may reflect challenges in the area of risk management in Islamic banks. Keywords: Financial performance, Islamic banks, Conventional banks, ROA, UAE. JEL Classification: A10, E60, G21
The impact of political instability, macroeconomic and bank-specific factors on the profitability of Islamic banks: An empirical evidence
Published in: Investment Management and Financial Innovations
Oct 10, 2017
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.
Liquidity, profitability and solvency of UAE Banks: A comparative study of commercial and Islamic Banks
Published in: Academy of Accounting and Financial Studies Journal
Sep 13, 2017
The present study aims to measure and evaluate the liquidity, profitability and solvency of Islamic and commercial banks in the United Arab Emirates (UAE). The study has used a sample of all fully-fledged Islamic banks and 14 commercial banks working in the UAE over the period of 2011-2014. Panel balanced data is fetched from different sources for Islamic banks and commercial banks in the UAE. Microsoft Excel, Eviews version 7 and SPSS version 22 have been used for the analysis of the data. The liquidity, profitability and solvency ratios of the UAE Islamic and commercial banks" are calculated and compared over the mentioned period. The results of the study revealed that there is a significant difference between Islamic banks and commercial banks of UAE in terms of Liquidity. The study found that Islamic banks have maintained sound liquidity ratios while profitability and capital adequacy ratios are good for commercial banks of UAE. The results also show that there is a significant difference in the profitability between Islamic and commercial banks of UAE. Further, there is no significant difference found in liquidity and solvency for Islamic and commercial banks of UAE. The results of stepwise regression analysis indicate that liquidity is a determinant variable in the profitability of Islamic banks while liquidity and capital adequacy are determinant variables in the profitability of commercial banks of UAE.
A critique of the role of Islamic banking in economic growth and financial stability of gulf cooperation council (GCC) economies
Published in: International Journal of Economic Research
Sep 12, 2017
This paper presents insights into the relationships between Islamic banking, economic growth and financial stability in GCC economies. The paper gives a critique on the impact of Islamic banking in the growth and stability of the economies of Gulf region. The critique analysis is given based on some of the previous published work by the authors on the relationships between Islamic banking, financial stability and economic growth in selected countries of Gulf region. The paper primarily is based on the analysis of four countries of GCC where Islamic banking has footprints. The countries are United Arab Emirates, Qatar, Kingdom of Saudi Arabia and Bahrain. The results of two empirical parts are presented through the paper. It explores that the contribution of Islamic banking in each country is according to the advancements of its financial systems and norms. In some countries, the relationship between Islamic banking and economic growth is supply-leading and in others is demand-following. It also shows that Islamic banking is a stable and less volatile during global financial crisis in 2008 in all countries under the study. The results of the critique viewpoints are encouraging the authorities and policy makers in the GCC countries to do further investments and projects using Islamic banking financing modes since they approved its stability under different financial crises and shocks.
Critical challenges affecting Islamic banking growth in India using Analytical Hierarchy Process (AHP)
Published in: Banks and Bank Systems
Jul 13, 2017
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.
Published in: Banks and Bank Systems
Jun 07, 2017
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.