Book Chapters

Only a few cross-country empirical studies have been conducted to measure the performance of commercial banks especially before, during, and after crises (financial or political). This study makes an attempt to fill the gap in the literature by investigating the impacts of crises on Gulf Corporate Council (GCC) commercial banks’ performance over the period 1997-2007. The rationale behind this selection is that the GCC countries within this period witnessed two major crises: a political crisis (the second Gulf war) and a financial crisis (the current global crisis).

The present study provides new empirical evidence on the impact of economic freedom on Islamic banks’ performance. The empirical analysis focuses on Islamic banks operating in the MENA banking sectors during the period 2000–2008. We find that the larger, more diversified, and better capitalized Islamic banks tend to be relatively more profitable, while credit risk and expense preference behaviour seem to exert negative impact. The findings suggest that greater financial freedom positively influence the profitability of Islamic banks operating in the MENA banking sectors.

The current paper reports the outcome of investigating the sustainability and efficiency of Shariah–compliant investment from the global and cross-country perspectives. Our findings, thus far, suggest that global Shariah compliant sustainable shares performed slightly better than global sustainable shares in general, during 2006-2011, and Shariah compliant shares performed substantially better than global market during the same period.

According to the financial press, firms with low leverage have lower distress risk due to their reduced exposure to the credit market, especially during credit crises. Compared to their conventional and socially responsible (SRI) counterparts, Shariah compliant (SC) stocks are low-leverage stocks. Our hypothesis is that SC firms would be less sensitive to leverage risk and thus would be ideal for wealth preservation during declining market environment.

An understanding of financing behaviour explains the performance of Islamic banks as an alternative to the conventional finance model as suppliers of capital for businesses and entrepreneurs. In the Islamic banking system, banks are suppliers of capital and not lenders unlike that stipulated in a traditional banking system. To date, Islamic banks have become the major source of capital in Malaysia and lending behaviour is an important policy variable.

This study uses micro-econometric analysis to examine the impact of Islamic debt on firm value and firm financial performance by observing Malaysian firms. A number of significant contributions to corporate finance arise from this research in relation to Islamic debt instruments and firm financial performance. First, it provides evidence of the Islamic debt impact on firm value and firm financial performance. Second, and very importantly it provides new insights, adding substantially to the very few studies that have been conducted on these types of instruments.

A key issue for the fast growing Islamic debt market is whether sukuk instruments are equivalent to conventional bonds as is practiced today by the market operators. This major research question is explored here using a large traded data set on

Does Islamic Finance influence growth? The aim of this paper is to investigate empirically the impact of the Islamic Bank Financing on Malaysia’s economic growth over the period 2000Q1– 2011Q4. The hypotheses addressed in this study are discussed within the framework of DemirgüçKunt & Levine/Chapra approach and the analysis of the Islamic Banking system. A neoclassical production function augmented by some indicators of the Islamic bank financing has been the theoretical framework of our empirical investigations.

A study is made of the economic and financial crises of fifteenth-century Egypt, which was ruled by the Mamluk dynasty. During the fifteenth century, especially the first half, Egypt faced terrible economic crises caused sometimes by the ill-governance and corruption of rulers, and sometimes by natural catastrophes such as the flooding or drying up of the Nile, outbreaks of epidemics, crop diseases, etc. In many cases two or more factors existed simultaneously. Financial crises emanated mainly from monetary mismanagement.