Modified integrated Islamic CSRD index and financial performance of Malaysian Islamic banks

2020 ◽  
Vol 11 (8) ◽  
pp. 1599-1617
Author(s):  
Fatimah Noor Rashidah Mohd Sofian ◽  
Rusnah Muhamad
Keyword(s):  
Financial Performance ◽  
Stakeholder Theory ◽  
Partial Least Square ◽  
Least Square ◽  
Islamic Banks ◽  
Content Type ◽  
Partial Least Square Analysis ◽  
The Relationship ◽  
Purposive Sample ◽  
Practical Implications

Purpose The purpose of this paper is to examine the relationship between the modified integrated Islamic CSRD index (MIICSRDi) and financial performance of Malaysian Islamic banks as perceived by the stakeholders. Design/methodology/approach This paper used survey questionnaire with a purposive sample of 343 stakeholders of Malaysian Islamic banks. A theoretical framework was developed and tested by using partial least square analysis. Findings The findings reveal that there is a significant positive relationship between the MIICSRDi and financial performance as perceived by the stakeholders. Research limitations/implications There is a lack of empirical research proposing an Islamic CSRD framework that is suitable to be applied within the context of the Malaysian environment. Hence, this paper shows that MIICSRDi in line with the stakeholder theory, Shariah principles and ‘urf principle (customary practice) can be used by Malaysian Islamic banks to increase their performance. Practical implications MIICSRDi can be used as one of the strategies to improve the financial performance of Islamic banks. In fact, it can be instilled in the value-based intermediation introduced by Bank Negara Malaysia for the rebranding of Islamic banks. Originality/value The relationship between perceived MIICSRDi and perceived financial performance is explained in light of the stakeholder theory, Shariah principles (unity, equilibrium, free will, responsibility and tazkiyah) and ‘urf principle (customary practice).

Whether Shari’ah compliance efficiency is a matter for the financial performance

2018 ◽  
Vol 9 (2) ◽  
pp. 183-200 ◽  
Author(s):  
Md. Hafij Ullah ◽  
Ruma Khanam
Keyword(s):  
Financial Performance ◽  
Qualitative Method ◽  
Islamic Banks ◽  
Content Type ◽  
Financial Outcomes ◽  
Leading Position ◽  
Regulatory Bodies ◽  
The Relationship ◽  
E Mail ◽  
Practical Implications

Purpose Shari’ah is the foundation of Islamic banks. Although all the Islamic banks required complying with the Shari’ah requirements fully, the level of compliance differs among the Islamic banks. At the same time, Islamic banks have been performing well, but all do not demonstrate similar financial performance. This paper aims to explore whether Shari’ah compliance efficiency makes any difference in financial performance of Islami Bank Bangladesh Limited (IBBL). Design/methodology/approach This study used IBBL as a case. For exploring the issue of study, this paper applied an e-mail interview approach and interviewed 24 interviewees including financial analysts, IBBL clients and executives of regulatory bodies, the IBBL and other Islamic- and interest-based traditional banks. Interview opinions are then analyzed and interpreted for a deeper understanding of the topic. Findings The study observed that some other factors influence the financial performance of IBBL, but Shari’ah compliance is the dominant instinct of acquiring the leading position. Superior Shari’ah compliance creates internal strengths and external opportunities that facilitate IBBL in achieving higher financial performance. Most interviewees argued that Shari’ah is the only disposition that makes IBBL unique. Moreover, the bank that considerably follows Shari’ah gets better financial outcomes. Research limitations/implications The study used a qualitative method using interview responses only for evaluating the relationship between Shari’ah compliance and financial performance. Further study may be conducted based on a quantitative approach. Practical implications This paper expects to uphold the significance of Shari’ah in improving the financial performance of IBBL and simultaneously motivating the parties associated with the Islamic banks in enhancing the level of Shari’ah compliance. Moreover, this study provides new insights into the importance Islamic banks and their performance in relation to the choice of customers. Originality/value This study explores the significance of Shari’ah compliance in creating avenues for greater financial performance and develops a model showing the ways how Shari’ah compliance leads Islamic banks to achieve higher financial positions.

Role of virtues in the relationship between shame and tendency to plagiarise

2019 ◽  
Vol 33 (1) ◽  
pp. 66-85 ◽  
Author(s):  
Deepika Pandoi ◽  
Sanjaya Singh Gaur ◽  
Anup Kumar Gupta
Keyword(s):  
Structural Equation ◽  
Partial Least Square ◽  
Least Square ◽  
Path Model ◽  
Content Type ◽  
External Shame ◽  
Quasi Experimental ◽  
The Relationship ◽  
Practical Implications

Purpose Plagiarism is an epidemic for scholars that needs to be managed. Penalties do not seem to be able to stop people from indulging in it. Manipulation of emotions and values may help in discouraging people from plagiarism. Therefore, the purpose of this paper is to understand the association between felt emotion and plagiarism outcome behaviours. Another objective of the study is to see the role of virtues in discouraging people from plagiarism. Design/methodology/approach A scenario-based quasi-experimental method is used to collect the data. Graduate students from various Indian universities were invited for the experiment. The partial least square based structural equation modelling is used to test the measurement as well as path model. Findings The authors found that manipulated shame resulted in feelings of both international and external shame. When individuals feel internal shame, they avoid and discontinue plagiarism. They also try to repair the damage that they cause by plagiarism. However, feeling of external shame only encourages individuals to discontinue plagiarism behaviour. Virtues such as influence, competitiveness and equality weaken the relationship between internal shame and plagiarism-related outcome behaviour. At the same time, these virtues do not affect the relationship between external shame and outcome behaviours. Practical implications This study has important implications for the institutions of higher education. The study suggests that universities should provoke the emotion of shame through various communications to students to control the act of plagiarism by their students. Originality/value No study seems to have examined if the manipulation of emotions and values can help reduce the problem of plagiarism. This is an attempt towards bridging this important gap in literature. Therefore, findings of this study are of great value to scholars and content developers.

Predicting behavioural intention toward Islamic bank: a multi-group analysis approach

2019 ◽  
Vol 10 (4) ◽  
pp. 1091-1103 ◽  
Author(s):  
Dwi Suhartanto
Keyword(s):  
Group Analysis ◽  
Partial Least Square ◽  
Least Square ◽  
Behavioural Intention ◽  
Islamic Banks ◽  
Content Type ◽  
Islamic Bank ◽  
Bank Managers ◽  
The Impact ◽  
Practical Implications

PurposeThis study aims to examine behavioural intention towards Islamic bank including three determinants: religiosity, trust and image across customers and non-customers.Design/methodology/approachThis study uses 400 samples, consisting of customers and non-customers of Islamic banks collected from Bandung, Indonesia. Partial least square was applied to evaluate the association between religiosity, trust, image and behavioural intention.FindingsThis study reveals a direct effect of religiosity on behavioural intention and indirect effect through trust and image for both customers and non-customers of Islamic banks. Although the impact of religiosity on trust, image and behavioural intention is significant in both the customer and non-customer sample, the effect of religiosity on the customer is higher compared to that of non-customer.Practical implicationsThis study provides an opportunity for Islamic bank managers to increase the behavioural intention among the customer, as well as non-customer. To increase behavioural intention amongst customers and non-customers, Islamic bank managers need to keep the bank operation compliant with theSharialaw, maintain a good image and gain trust from both customers and non-customers.Originality/valueThis study is the first attempt to evaluate the behavioural intention towards Islamic bank across customers and non-customers.

scholarly journals The non-economic consequences of disclosure in Islamic banks

2018 ◽  
Vol 13 (6) ◽  
pp. 1948-1968 ◽  
Author(s):  
Sherif El-Halaby ◽  
Khaled Hussainey ◽  
Heba Abou-El-Sood
Keyword(s):  
Structural Equation ◽  
Partial Least Square ◽  
Economic Consequences ◽  
Least Square ◽  
Mediating Effect ◽  
Islamic Banks ◽  
Content Type ◽  
Least Square Approach ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to examine the effect of sharia, social and financial disclosure on stakeholders’ loyalty towards Islamic banks (IBs). The paper also aims to examine the extent to which trust and satisfaction mediate this effect. Design/methodology/approach It uses data collected from 600 respondents to survey questionnaires disseminated to stakeholders from 15 countries dealing with IBs. Structural equation modelling is adopted with a partial least square approach. Findings The results indicate that there is a significant impact of disclosure on stakeholders’ trust, satisfaction, and loyalty. The results also indicate that there is a partial mediating effect of trust and satisfaction in the relationship between disclosure and loyalty. This paper is one of the first studies examining the effect of disclosure on stakeholders’ loyalty. The authors provide novel findings, which have theoretical and practical implications for disclosure in IBs and their relationship with stakeholders. Originality/value The analysis offers a novel contribution to the Islamic banking literature by offering the first evidence on the impact of disclosure on stakeholders’ trust, satisfaction, and loyalty.

Loyalty formation and its impact on financial performance of Islamic banks – evidence from Indonesia

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ayu Fusva ◽  
David Dean ◽  
Dwi Suhartanto ◽  
Moch. Edman Syarief ◽  
Agus Zainul Arifin ◽  
...  
Keyword(s):  
Service Quality ◽  
Financial Performance ◽  
Perceived Value ◽  
Partial Least Square ◽  
Least Square ◽  
Islamic Banks ◽  
Financial Reports ◽  
Content Type ◽  
Islamic Bank ◽  
Business Operations

Purpose This paper aims to examine loyalty formation, including service quality, perceived value, image and satisfaction as determinants, and their effect on the financial performance of Islamic banks. Design/methodology/approach Data were collected from 280 Islamic bank clients in Indonesia and bank financial performance data from bank financial reports. Variance-based partial least square modelling was used to assess the relationships between loyalty, its determinants and their influence on bank financial performance. Findings This study finds that client loyalty towards Islamic banks is most influenced by perceived service quality and perceived value. Further, this study documents the importance of client loyalty in influencing bank financial performance and indirect effect of clients’ satisfaction on financial performance through the strengthening of client loyalty. Practical implications This study offers a path for the managers of Islamic banks to enhance financial performance by enhancing client loyalty. To develop client loyalty, this study suggests that Islamic banks should offer economical and service-derived benefits that are superior to those other banks offer. Further, Islamic banks need to ensure that their business operations are compatible with Islamic values. Originality/value This is an early empirical study attempting to examine the link between customer loyalty and its impact on Islamic bank financial performance.

scholarly journals Analysis on The Effect of Intellectual Capital on Growth and Financial Performance of Islamic Banking

2018 ◽  
Vol 1 (1) ◽  
Author(s):  
Jetmiko Jetmiko
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Partial Least Square ◽  
Least Square ◽  
Islamic Banks ◽  
Analysis Model ◽  
Gcc Countries ◽  
Partial Least Square Analysis ◽  
Least Square Approach

This research aims to analyze the influence of Intellectual Capital and Financial Performance using Partial Least Square Approach. The sample of this research is 19 Islamic Banks in Indonesia, Malaysia and GCC countries. Partial Least Square analysis model was employed to test the hypotheses. The result of this study shows that intellectual capital disclosure affects the Islamic banks� financial performance in Indonesia and GCC countries but not those in Malaysia. As for the company�s growth, the disclosure of intellectual capital does not have effect on the company�s growth. The influence of the disclosure of intellectual capital on financial performance could mean that the company should give more attention to the quality of intellectual capital.

The influence of information technology strategy and management support to the internal business process, competitive advantage, financial and non-financial performance of the company

2018 ◽  
Vol 14 (3) ◽  
pp. 317-333
Author(s):  
Endang Astuti ◽  
Suhadak ◽  
Sri Mangesti Rahayu ◽  
Wilopo
Keyword(s):  
Information Technology ◽  
Financial Performance ◽  
Competitive Advantage ◽  
Partial Least Square ◽  
Least Square ◽  
Technology Strategy ◽  
Management Support ◽  
Unit Of Analysis ◽  
Content Type ◽  
The Relationship

Purpose The purpose of this paper is to conduct a research to analyze and to explain the influence of information technology strategy (ITS) and management support (MS) on internal business processes (IBPs), competitive advantage (CA) and financial performance (FP) and non-financial performance (NFP) of a company. Design/methodology/approach This study uses a quantitative approach and is included in an explanatory research. This study belongs to the category of perceptive research, and the unit of analysis is an individual (Singarimbun and dan Effendi, 1989). The study population is Carrefour executives/managers. The unit of analysis in this study is an individual who is a Carrefour manager and who becomes the sample. This study is conducted throughout the Carrefour chains in Indonesia. Method of data analysis uses descriptive analysis and inferential statistic, using partial least square. Findings This study found that ITS has no significant effect on FP, but it has a significant effect on NFP. It also found that MS has a significant effect on IBP CA and FP and NFP. This study found that IBPs have no significant effect on FP but have a significant effect on NFP and CA. CA has no significant effect on FP, but it has a significant effect on NFP. Further, NFP has a significant effect on FP. Originality/value This research is important to understand comprehensively the relationship between information technology and IBPs, CA and company performance. The difference between this study and previous studies is that this study examines the relationship between MS and IBP to CA, NFP and corporate FP.

I'll manage myself: the moderator effect of positive framing on the relationship between organisational politics and engagement

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Robinson James
Keyword(s):  
Work Engagement ◽  
Structural Equation ◽  
Harmful Effect ◽  
Negative Relationship ◽  
Partial Least Square ◽  
Least Square ◽  
Moderator Effect ◽  
Content Type ◽  
The Relationship ◽  
Organisational Politics

PurposeThis study aims to investigate the influence of organisational politics on work engagement and the moderator effect of positive framing on this relationshipDesign/methodology/approachData were collected from 241 public sector employees in Sri Lanka through a structured questionnaire and analysed with partial least square structural equation modelling (PLS_SEM).FindingsThe results indicated that organisational politics negatively influenced employees' work engagement, positive framing positively influenced engagement and weakened the negative relationship between politics and engagement.Practical implicationsThis study suggests that organisation and individuals must take the necessary steps to enhance work engagement. Organisations must be transparent in all activities to avoid employees' negative perception. Also, organisations need to take steps to recruit employees with positive framing or develop this competency through training and development. Individuals also need to take necessary steps to frame the work environment positively to enhance their engagement in work.Originality/valueThis study extends the literature by being the first to examine the positive framing as a moderator in the relationship between politics and engagement. This study found that positive framing as a resource reduced the harmful effect of organisational politics on engagement and suggested positive framing can be considered as a resource in the future investigation of the job demand–resource model.

HC and financial performance with two HRM strategies

2017 ◽  
Vol 66 (4) ◽  
pp. 459-478 ◽  
Author(s):  
Nopadol Rompho
Keyword(s):  
Human Capital ◽  
Regression Analysis ◽  
Financial Performance ◽  
Lead Time ◽  
Design Methodology ◽  
Strategy Choice ◽  
Content Type ◽  
The Relationship ◽  
Practical Implications

Purpose The purpose of this paper is to examine the relationship between levels of human capital and financial performance of firms that use two distinct human resource management (HRM) strategies. Design/methodology/approach A survey of 128 HRM managers was conducted to assess differences in human capital between firms using different HRM strategies. A multiple regression analysis was used to investigate the relationship between firms’ human capital and financial performance. Findings The results show that companies employing a make-organic strategy have a higher level of human capital than companies employing a buy-bureaucratic strategy. There was no relationship between the level of human capital and long term financial performance of firms with both make-organic and buy-bureaucratic strategies. Research limitations/implications This research contributes toward understanding the effect of HRM strategy and facilitates an optimal strategy choice depending on the organization. However, this study did not consider the lead time between changes in human capital and the effect on financial performance. Practical implications The research encourages firm managers to understand the value of human capital, preparing them for changes in the future. Originality/value This study is among the first to investigate the relationship between human capital and financial performance considering different HRM strategies.

scholarly journals RELATIONSHIP BETWEEN FAMILY OWNERSHIP, AGENCY COSTS TOWARDS FINANCIAL PERFORMANCE AND BUSINESS STRATEGY AS MEDIATION

2018 ◽  
Vol 19 (0) ◽  
pp. 49-58
Author(s):  
Enni Savitri
Keyword(s):  
Financial Performance ◽  
Business Strategy ◽  
Agency Costs ◽  
Stock Exchange ◽  
Partial Least Square ◽  
Least Square ◽  
Business Strategies ◽  
Family Ownership ◽  
Manufacturing Companies ◽  
The Relationship

This study investigates the relationship between family ownership, agency costs, financial performance, and companies’ business strategies. The targeted population of this study were all 143 manufacturing companies listed on the Indonesia Stock Exchange (IDX) during 2007–2014. About 31% (45) of these manufacturing companies are family companies. The hypotheses were tested using the partial least-square (PLS) method. Our findings reveal that the companies’ business strategies are not affected by the family ownership. Family ownership and business strategies influence companies’ financial performance. Agency costs influence business strategy and financial performance, and this shows that agency costs contribute to both the increase and decrease of financial performance. Business strategy mediates the relationship between family ownership and financial performance. This shows that family companies do not concentrate on financial goals but rather on the sustainability. Business strategy influences the relationship between agency costs and financial performance. This shows that funds can be redistributed in the course of business strategy planning, which will, in turn, improve the company’s development.

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