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1 – 10 of over 140000Felix Iblher and Dominik I. Lucius
Innovative financing instruments are well‐known in Anglo‐American real estate finance markets. This study is the first to analyse the use and structure of the innovative financing…
Abstract
Innovative financing instruments are well‐known in Anglo‐American real estate finance markets. This study is the first to analyse the use and structure of the innovative financing instruments in Germany. Based on a survey addressed to German banks offering real estate financing, instrument‐ and bank‐type specific patterns and reimbursement schemes are examined. While the research shows that innovative instruments are not yet widely used in Germany, banks possess experience in mezzanine capital, project and joint venture financing and are optimistic regarding the future development of demand for these instruments.
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The paper attempts to analyze the volatility of returns and expected losses of Islamic bank financing. In particular, it takes the case of Indonesian Islamic banking industry.
Abstract
Purpose
The paper attempts to analyze the volatility of returns and expected losses of Islamic bank financing. In particular, it takes the case of Indonesian Islamic banking industry.
Design/methodology/approach
The paper uses Value at Risk (VaR) approach to compute the volatility (risk) of returns and expected losses of Islamic bank financing. In particular, it uses variance‐covariance method to calculate VaR of multi‐asset portfolios (groups of equity‐, debt‐ and service‐based financing).
Findings
First of all, equity and debt‐based financing produce sustainable returns of bank financing. Moreover, they are also very resilient during unfavorable economic conditions. Second, the performance of service‐based financing is very sensitive to the economic conditions. Lastly, VaR computation on the volatility of returns and expected losses of bank financing finds that risk of investment and expected losses are well managed.
Practical implications
The paper demands Islamic banks to keep intensifying equity‐based financing rather than only debt‐based financing and improve the banking services to support the performance of service‐based financing.
Originality/value
To the best of the author's knowledge, this is the first paper to assist the volatility of returns and expected losses of the Islamic banking financing in Indonesian.
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Shujun Zhang, Jialiang Fu, Weiwei Zhu, Guoxiong Zhao, Shuwei Xu and Biqing Chang
This study investigates the economic outcomes of the strategic deviation (SD), the fundamental and crucial question in institutional theory and strategic management. Previous…
Abstract
Purpose
This study investigates the economic outcomes of the strategic deviation (SD), the fundamental and crucial question in institutional theory and strategic management. Previous studies have yielded contradictory findings. This study reconciles conflicting results by distinguishing the effects of the SD on financial and market performance, examining the mechanism of financing constraints and the boundary condition of institutional investor heterogeneity.
Design/methodology/approach
This research collected data from Chinese A-shares listed manufacturing firms from 2009 to 2021 from the CSMAR and Wind databases. This study conducted empirical tests using OLS models with Stata 15.
Findings
Empirical results demonstrate that the SD has different impacts on different dimensions of performance. The SD negatively impacts financial performance while positively impacts market performance. Financing constraints mediate the main effects. Moreover, transactional institutional investors positively moderate the negative effect of the SD on financial performance, whereas stable institutional investors negatively moderate the positive effect of the SD on market performance.
Originality/value
By systematically revealing how the SD has different effects on financial and market performance, this study reconciles the debate on the SD between institutional theorists and strategy scholars. This research makes contributions to the research stream by providing reasonable explanations for conflicting conclusions. Furthermore, by introducing the overlooked perspective of financing constraints, this research identifies crucial mediating mechanisms and highlights the double-edged effect of financing constraints, enriching our understanding of financing constraints. Finally, this study investigates the moderating effects of institutional investor heterogeneity, thereby making valuable contributions to the comprehension of boundary conditions.
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Using the consumption values theory (CVT) as a baseline model, this study aims to evaluate the factors that influence farmers' decision-making behavior regarding interest-free…
Abstract
Purpose
Using the consumption values theory (CVT) as a baseline model, this study aims to evaluate the factors that influence farmers' decision-making behavior regarding interest-free agricultural financing products.
Design/methodology/approach
Data were gathered from 321 banking customers using questionnaires who are engaged with the agriculture sector and wish to obtain finance related to Islamic agriculture products.
Findings
The findings demonstrate that the decision behavior for Islamic agriculture financing products is highly influenced by epistemic, emotional and functional values. On the contrary, conditional and social values do not influence farmers’ choice behavior for Islamic agriculture financing products.
Research limitations/implications
There are a few limitations in this study. Initially, the study's geographic scope is limited to bank customers within the agriculture sector who live, in particular, in Southern Sindh province, Pakistan. Next, researchers extended the CVT to a specific focus on agricultural financing products by Islamic banks. Future researchers should take these concerns into consideration for better applicability, and it is anticipated that the research approach will be refined to best expand the results. Lastly, future researchers are expected to broaden the theory's relevance by considering the socio-cultural environmental conditions (culture, religious values and approaches) and social conditions in a wider range of Islamic agricultural financial instruments.
Practical implications
The findings are beneficial for practitioners intending to advance innovative Islamic agriculture financing products to cater to Pakistani farmers’ needs.
Originality/value
This research extends the CVT that offers valuable information for the development of consumers’ behavior in the setting of interest-free agricultural financing.
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Ahmad Roziq, Moch Shulthoni, Eza Gusti Anugerah, Ahmad Ahsin Kusuma Mawardi and Whedy Prasetyo
This paper aims to create a model of musharaka financing performance and Islamicizing agency theory to explain issues related to musharaka financing and propose solutions to these…
Abstract
Purpose
This paper aims to create a model of musharaka financing performance and Islamicizing agency theory to explain issues related to musharaka financing and propose solutions to these problems.
Design/methodology/approach
This research focuses on Islamic banks located in East Java Province, Indonesia, as the population for investigation. This study used primary data collected through a questionnaire instrument. The research adopts a mixed method approach, integrating quantitative data using the smartPLS program, qualitative data using a case study and kasyif research.
Findings
This research revealed that employee competence, Islamic business ethics and monitoring significantly impact the risk of musharaka financing. In contrast, information asymmetry does not significantly influence the risk of musharaka financing in Islamic banks. On the contrary, information asymmetry, Islamic business ethics and monitoring significantly affect the performance of musharaka financing. However, employee competence and risk of musharaka financing do not significantly influence the performance of musharaka financing in Islamic banks.
Research limitations
The responses to the questionnaire are analyzed from the perspective of directors and financing managers of Islamic banks who possess expertise in management and act as financing providers. However, musharaka partners who receive financing may have different perceptions and experiences of implementing musharaka financing.
Practical implications
Financing managers and directors at Islamic banks need to minimize the risk of musharaka financing and alleviate information asymmetry by enhancing employee competence and selecting musharaka partners capable of adhering to Islamic business ethics.
Social implications
Partners of musharaka financing should enhance their Islamic business ethics. Next, other researchers should improve this study by expanding the research locations, increasing the sample size, incorporating additional variables and involving musharaka partners as respondents.
Originality/value
It is a new research using three methods to construct a model of musharaka financing performance. The research refines agency theory by integrating Islamic values into Sharia agency theory.
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Mohd Hanafi Azman Ong, Norazlina Mohd Yasin and Nur Syafikah Ibrahim
The purpose of this paper is to investigate a distinct set of characteristics that influence Muslim customers’ intentions to purchase Ar-Rahnu Islamic financing contract in…
Abstract
Purpose
The purpose of this paper is to investigate a distinct set of characteristics that influence Muslim customers’ intentions to purchase Ar-Rahnu Islamic financing contract in Malaysia.
Design/methodology/approach
The study studied the impact of perceived value, perceived quality, perceived financial advantages, religious commitment and product knowledge on the purchase intention Ar-Rahnu Islamic financing contract using a quantitative research approach. A Google Form-based online survey was created and distributed through Twitter, Facebook and Instagram, among others. The survey data were analysed using structural equation modelling with a partial-least-square estimation property (PLS-SEM).
Findings
The study results suggested that Muslim customers in Malaysia had a greater propensity to buy Ar-Rahnu Islamic financing contract. Analysis of the data revealed that perceived value, perceived quality, perceived financial benefits and religious commitment had direct effects on the desire to buy Ar-Rahnu Islamic financing contract in Malaysia. In addition, the results reveal that religious commitment, perceived quality and perceived financial benefit are the top three important factors in explaining Ar-Rahnu Islamic financing contract buying intentions in this country.
Practical implications
Muslim customers may use Ar-Rahnu Islamic financing contract as a short-term credit alternative to enhance their financial standing. Ar-Rahnu Islamic financing contract generates a substantial quantity of credit demand and supply, which not only allows Muslim customers to adhere to Islamic standards but also contributes to the expansion of the economy. The result would aid and advise Ar-Rahnu finance resources and legislators in measuring the efficacy of the program in Malaysia, especially among Muslim customers.
Originality/value
Ar-Rahnu Islamic financing contract as a financing alternative has been explored extensively, but this study takes a whole new approach to the subject by looking at dimensions of perceived value, perceived quality and perceived financial benefit along with individual product knowledge and religious commitment. Consequently, this study will contribute to the understanding of how Muslim customers will respond to the Ar-Rahnu Islamic financing contract and will assist financial institutions in increasing the possibility that Muslim consumers would acquire Ar-Rahnu Islamic financing contract.
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Muntazir Hussain, Ramiz Rehman and Usman Bashir
This study investigates the relationship between female CEOs and SMEs’ financing decisions. The study also examined the moderating role of ownership structure (female, foreign…
Abstract
Purpose
This study investigates the relationship between female CEOs and SMEs’ financing decisions. The study also examined the moderating role of ownership structure (female, foreign, and state ownership) in female CEO-SMEs’ financing decisions.
Design/methodology/approach
The study has applied Generalized Least Square (GLS) and Binomial Logistic Regression. The study has used firm-level data from 2,700 Small and Medium Enterprises (SMEs) in the Chinese economy.
Findings
The results suggest that female CEOs use debt financing. However, the financing decision of female CEOs varies if we account for female ownership, foreign ownership, state ownership, firm association with big firms, and the industry in which the firm operates. This study also provides robust evidence that female CEOs utilize debt financing under certain conditions and that female CEOs prefer long-term debt financing to short-term debt financing when considering debt maturity choices.
Originality/value
Recent studies report a negative relationship between female CEOs and financing decisions based on the rationale that females are risk-averse and choose less risky financing compared to their male counterparts. This study posits new evidence that female CEO financing decisions are not always risk averse if we consider female ownership, foreign ownership, state ownership, firm association with big firms, and the industry in which the firm operates. Thus, we contribute to the corporate governance literature, and this study implies a corporate financing policy.
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Chaorui Huang, Song-Man Wu, Hoi Lam Ma and Sai Ho Chung
Considering the financial service providers’ (FSPs) information asymmetry in evaluating the supplier and their distinct quit probabilities, we want to examine the supplier’s…
Abstract
Purpose
Considering the financial service providers’ (FSPs) information asymmetry in evaluating the supplier and their distinct quit probabilities, we want to examine the supplier’s preference of the financing schemes if both the bank and the online platform exist and how the buyer sets the contract terms in the two financing schemes.
Design/methodology/approach
We establish a Stackelberg game model to capture the interactions among three parties, i.e. a supplier, a capital-sufficient buyer and an FSP (either a bank or an online platform), within a first-time contract.
Findings
In the non-FSPs’ quit case, the buyer’s profit is higher under the bank loan scenario, while the supplier’s profit performs adversely. The supply chain’s profit is heavily dependent on the buyer’s profit difference between the two financing schemes. Moreover, we find that the supplier borrows the money to exactly cover the production cost. The equilibrium solutions of the FSPs’ quit case and of the capital-sufficient supplier’s case are also derived.
Originality/value
First, we assign different risk profiles to different FSPs in our setting so that modeling a previously ignored but practically significant problem. Second, we innovatively take the FSP’s quit probability into account in our model. Third, we elucidate how these factors can influence the relative efficiency of the two types of financing schemes and the settings of the contract, which further complements and extends the current SCF research.
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Madha Adi Ivantri, Muhammad Hakim Azizi, Ana Toni Roby Candra Yudha and Yudi Saputra
This paper aims to propose a new housing finance mechanism through gold price as an alternative to interest rate in Islamic home financing, especially on Bai’Bithaman Ajil (BBA…
Abstract
Purpose
This paper aims to propose a new housing finance mechanism through gold price as an alternative to interest rate in Islamic home financing, especially on Bai’Bithaman Ajil (BBA) contract.
Design/methodology/approach
This study using simulation approach to calculate the monthly installments for home financing using gold price references. In simple terms, propose a financing formula in the BBA contract by converting the selling price of the house to the gold price, and then the monthly installments also follow the actual gold price. The authors provide an example by simulating this formula using historical data and cases of housing financing at Indonesian Islamic banks. The authors compare housing financing models based on gold prices and interest rates. Finally, The authors can compare the two housing financing models that are affordable for low-income people.
Findings
The results show that in the initial period, monthly installments of BBA based on gold price were lower than home financing based on interest rate. This result makes it possible for low-income people who cannot access financing based on interest rates to access financing based on gold price. However, the total installments of financing based on gold prices are higher than the financing model based on interest rates.
Research limitations/implications
The paper confines one contract, namely, BBA, as it is claimed to be more Shariah-compliant than others.
Practical implications
These findings suggest an alternative model for Islamic banks and regulatory authorities in Indonesia to replace the interest rate reference with the gold price in BBA contract housing financing. This model can offer competitive advantages for Islamic banks, including lower initial installments and inflation-protected profits, serving as a means of differentiating them from conventional banks.
Social implications
Gold price-based housing financing model in Islamic banks will increase the affordability of housing financing for low-income people.
Originality/value
This paper tries to solve two problems, namely, first, the problem of assuming that Islamic and conventional banks are the same, and second, the problem of housing finance affordability. This study needs to be explored.
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Youssef Chetioui, Hind Lebdaoui, Zakaria Belouali and Adel Sarea
Though Murabaha financing experienced substantial growth in several majority-Muslim countries, its market share in the Moroccan banking industry is still very narrow than other…
Abstract
Purpose
Though Murabaha financing experienced substantial growth in several majority-Muslim countries, its market share in the Moroccan banking industry is still very narrow than other conventional banks’ instruments. The current research investigated the ability of an extended theory of planned behavior (TPB) framework to explain the main drivers of attitude and intention to use Murabaha financing among Moroccan households. The moderating effect of Islamic religiosity was also scrutinized.
Design/methodology/approach
Data were collected via a survey of 512 Moroccan consumers and analyzed using the partial least squares (PLS) technique.
Findings
First, attitude toward Islamic banking products is a key predictor of consumer intention to use Murabaha financing. At the same time, consumers’ attitudes are influenced by Islamic financial literacy, subjective norms, behavioral control and profit and loss sharing. Islamic religiosity was also found to positively moderate the link between attitudes towards Islamic banking (IB) and intention to use Murabaha financing, e.g. positive attitudes toward IB are more likely to convert into an intention to use Murabaha financing among Muslim consumers with higher levels of religiosity.
Managerial implications
To boost consumers’ intention to use Murabaha financing, Islamic bank managers should consider further investment in advertising to enhance consumers’ awareness about IB products. Islamic banks should also consider digital and social media marketing to increase consumers’ awareness about the products and spread a positive e-WOM with regards to their products. Our findings emphasize the importance of Islamic religiosity in shaping Muslim consumers’ intentions to use Murabaha financing. Islamic banks ought to make sure that Murabaha financing contracts are strictly adherent to and compliant with Shari’ah principles. They should also train their frontline employees on Islamic financing activities so that they can effectively respond to the queries and questions of Murabaha potential consumers.
Originality/value
The study findings contribute to the IB literature by demystifying the key factors shaping Muslim consumers’ intentions to use Murabaha financing. The study also extends the literature by emphasizing Islamic religiosity as a basis for Muslim consumers’ behavior in the context of IB. To the best of our knowledge, this study is among the first to empirically investigate Muslim consumers’ intention to use Murabaha financing in North Africa and the Arab countries.
Peer review
The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-10-2022-0680
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