Search results for: islamic trade finance

Authors: Sadia Bibi, Karim Ullah

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Islamic banks have excess liquidity, which needs proper management to earn a high rate of return on them to remain competitive. However, they lack assets-backed avenues and rely on a few sukuks, which led them to liquidity management issues. Financial engineering comes forward to innovate and develop instruments for the requisite financial problem. Still, they face many challenges, explored in the context of liquidity management in Islamic banks. The rigorous literature review shows that Shariah compliance, competition from the conventional banks, lack of sufficient instruments, derivatives are still not accepted as legitimate products, the inter-bank market being less developed, and no possibility of lender of last resort is the six significant constraints to financial engineering for liquidity management of Islamic banks. To further explore the problem, a multiple case study strategy is used to extend and develop the theory with the philosophical stance of social constructivism. Narrative in-depth interviews over the telephone are conducted with key personnel at treasury departments of selected banks. Data is segregated and displayed using NVivo 11 software, and the thematic analysis approach identifies themes related to the constraints. The exploration of further constraints to financial engineering for liquidity management of Islamic banks achieves the research aim. The theory is further developed by the addition of three more constraints to the theoretical framework, which are i) lack of skilled human resources, ii) lack of unified vision, and iii) lack of government support to the Islamic banks. These study findings are fruitful for the use of the government, regulatory authorities of the banking sector, the State Bank of Pakistan (Central Bank), and the product design & development division of Islamic banks to make the financial engineering process feasible and resolve liquidity management issues of Islamic banks.

Keywords: financial engineering, liquidity management, Islamic banks, shariah compliance

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Authors: Priti Bajpai, Mohammed Shibil

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This paper utilizes a comparative case study design to examine a regional onion market. The particular case of onion markets is used to understand perishable product supply chains. The site for the study is Dubai, United Arab Emirates. Results from a six-month field study are outlined. In particular, the findings suggest that firms should examine adding additional destinations to their supply chain. Further, we argue that utilizing Dubai as a supply chain hub is in certain cases counterproductive. Implications for food supply chains and regional trade are discussed.

Keywords: supply chains, food markets, onion trade, field study

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Authors: Mornay Roberts-Lombard

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Consumers’ perceptions of value are crucial to ensuring their future commitment and behavioral intentions. As a result, service providers, such as Islamic banks, must provide their customers with products and services that are regarded as valuable, stimulating, collaborative, and competent. Therefore, the value provided to customers must meet or surpass their expectations, which can drive customers’ commitment (affective and calculative) and eventually favorably impact their future behavioral intentions. Consequently, Islamic banks in South Africa, as a growing African market, need to obtain a better understanding of the variables that impact Islamic banking customers’ value perceptions and how these impact their future behavioral intentions. Furthermore, it is necessary to investigate how customers’ perceived value perceptions impact their affective and calculative commitment and how the latter impact their future behavioral intentions. The purpose of this study is to bridge these gaps in knowledge, as the competitiveness of the Islamic banking industry in South Africa requires a deeper understanding of the aforementioned relationships. The study was exploratory and quantitative in nature, and data was collected from 250 Islamic banking customers using self-administered questionnaires. These banking customers resided in the Gauteng province of South Africa. Exploratory factor analysis, Pearson’s coefficient analysis, and multiple regression analysis were applied to measure the proposed hypotheses developed for the study. This research will aid Islamic banks in the country in potentially strengthening customers’ future commitment (affective and calculative) and positively impact their future behavioral intentions. The findings of the study established that service quality has a significant and positive impact on perceived value. Moreover, it was determined that perceived value has a favorable and considerable impact on affective and calculative commitment, while calculative commitment has a beneficial impact on behavioral intention. The research informs Islamic banks of the importance of service engagement in driving customer perceived value, which stimulates the future affective and calculative commitment of Islamic bank customers in an emerging market context. Finally, the study proposes guidelines for Islamic banks to develop an enhanced understanding of the factors that impact the perceived value-commitment-behavioral intention link in a competitive Islamic banking market in South Africa.

Keywords: perceived value, affective commitment, calculative commitment, behavioural intention

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Authors: Fahimeh Ghorbani, Alam Saleh

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Ideology, politics and art have always been omnipresent patterns of Islam since its early age. The Islamic empire, expanded from China to Andalusia, has instrumentalized art and architecture to enhance political legitimacy of different dynasties or states throughout its history. Quranic verses utilized to convey ideological messages in the major mosques and mausoleums. Iranians had already been employing art and architecture to propagate their political legitimacy prior to Islam. The land of Iran and its art with strong civilizational pre-Islamic history has been profoundly politicized since the rise of Islam in the region. Early Islamic period in Iran has witnessed introduction of a new architectural language, new formulas for spatial configuration in built spaces, as well as new system of architectural decoration. Studying Iran’s Early Islamic architecture helps in better understanding the process of socio-political identity making of Iranian-Islamic culture, and thus art and architecture. This period also set the stage for formation of glorious architectural movements through Persianate world in later periods. During the Early Islamic period in Iran, the innovative combination of Islamic ideology and Iranian Architecture created formidable ideological tools in politicizing art in the region and beyond. As such, this paper aims to investigate the political history and architectural legacy from late Sassanid to Early Islamic period, delves into the ways in which Early Islamic architecture played role in transforming Persian concepts of kingship, administration, and social organization. In so doing, the study focuses on the Perso-Islamic architectural synthesis under the Samanids and Seljuk dynasty as case studies. The paper also explores how the newly introduced Islamic architecture has been employed to address the question of political legitimacy and to propagate states’ political agenda in early Islamic Iran (650-1250). As for the existing literature, despite its uniqueness and significance, Early Islamic architecture of Iran has received little scholarly attention. However, there exists a sizeable body of scholarship on socio-historic condition of the land of Iran during Early Islamic period which provide a solid base for the project. Methodologically speaking, the authors look into the subject through various lenses. They will conduct historic and archival research in libraries, private collections, and archives in Iran and the related neighbouring countries in Persian, Arabic and English. The methods of visual and formal analysis are applied to examine architectural features of the period. There are also a high number of intriguing, yet poorly examined, published and unpublished documents, old plans, drawings and photos of monuments preserved in Cultural Heritage of Iran Organization which will be consulted.

Keywords: Iran, Islamic architecture, early Islamic Iran, early Islamic architecture, politicized art, political legitimacy, propaganda, aesthetics

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Authors: Bilge Afşar, Zeynep Karaçor, Burcu Guvenek

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The aim of this study is to examine and analyze the effect of macroeconomic policies on foreign trade. In the study, the effect of the macroeconomic policies applied in Turkey after 2001 on foreign trade was scrutinized carrying out a survey study in the sample of the province Konya. In the survey study, the survey was administered to a total of 209 exporter firms, which are the members of Konya Chamber of Commerce. While 51 of the firms, to which the survey was administered, exported below $ 100,000, 158 of them are the firms exporting above $ 100,000. Survey was realized in the way of face to face interview with the firms in the rate of 79%. 47% of the institutions forming the mass were reached. In forming survey questionnaire, in general, 5-point Likert scale was used. In order to assess the study results, SPSS 15 package program was utilized. In the survey, foreign trade activities of the firms in Konya were analyzed; and the problems they face, while performing foreign trade, and those needing to be carried out for increasing foreign trade volume of Konya were revealed by determining how and at what degree they were affected from the macroeconomic policies applied. Thus, foreign trade structure and state of the province Konya were attempted to be analyzed. In the survey study, it emerges that although the problems Konya faces in foreign trade overlap with the problems across Turkey, the province Konya seems to be affected relatively less from the last crisis with its equity capital in either trade or other areas. Until the year 2008, while Konya is in a position of the province continuously increasing its export, also with the effect of global crisis, in 2009, a fall was seen in the amount of export. The results emerging in the survey study also confirm this case. In parallel with demand inadequacy and recession all over the world, firms experience trouble. However, again according to our survey result, foreign market weight of firms shifted from EU countries to Russia, East Bloc, and Middle East countries. This prevented Konya from negative affecting from EU crisis at maximum level. That is, Russian and Middle East market express significance for Konya. That market is diversified, and being relatively rid of dependence to EU is extremely important in terms of Konya export.

Keywords: economy, foreign trade, economic crise, macro economic politicies

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Authors: Farshad Negintaji, Hamid Reza Zeraat Pisheh, Mahshid Ghanea, Zahra Khalifeh, Mohammad Bagher Rahami

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This study has been examined the anatomical components of mosques with the approach of attending to Islamic wisdom and investigated the distinction between the anatomical design of mosques (traditional and modern) by considering the category of perception in Islamic architecture. To this end, this article by reviewing the theoretical and empirical literature of mosques' anatomy and the role of anatomy on the architectural design of Iranian mosques by examining the quantitative and qualitative indicators and in order to understand and identify the anatomy of mosques, indicators such as: entrance, portico, minarets, domes, bedchamber and pool have been used. The aim of this study has been to investigate materials, the functional properties, technology, sizes and fitness of (traditional and modern) mosques. For this purpose, a questionnaire was prepared in which the anatomical and spiritual elements of the mosque shape have been questioned. Research is related to field and is of descriptive, analytical and inferential type and quantitative and qualitative indicators have been examined.

Keywords: Islamic wisdom, Islamic architecture, mosque anatomy, the minaret, dome, bedchamber, entrance, pool, perception

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Authors: Mohammad Saif

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In the post-Westphalianworld order, the concept of sovereignty has been a fundamental area of inquiry in Political Science, International Relations, and International Law. Modern Islamic political thought has also dedicated a fair share of debate on the subject. The debate fundamentally revolves around the ‘ontological differentiation’ between western and Islamic political thought. While the centrality of the individual in western political thought regards the individual as the center of universe, Islamic Political thought provides that space to God. The modern liberal democratic principles suggest sovereignty as one of the major attributes of modern nation state; Islamists regard sovereignty as an attribute of God. However, the position regarding God’ssovereignty in Islamic political thought is not coherent in conception. Some scholars regard such a position as ‘the political interpretation of Islam’. This paper is an attempt to first analyze the fundamental discord between two rival political ideologies (western and Islamic), and then forward a debate on the subject of sovereignty in South Asian Islamic Political thought, particularly between Syed Abul Ala Maududi (ideological father of modern islamist movements) andHifzurrahmanSeoharvi (lesser known in Academia but highly influential in shaping Deobandi position of principles related to political nature of Islamic theology). Maududi regardssovereignty as an attribute of God and the rulers as subservient to Gods will, Seoharvi suggests that God's sovereignty does not entail that the caliph or amir cannot be a ruler or hakim, nor can his command or hukum be an order. Certain references have also been made to contemporary scholars like Sayidd Qutub, Rashid al Ghanouchi, who in one way or the other have contributed to the debate on ‘sovereignty in Islamic thought’.

Keywords: nation state, sovereigty, sovereignty of God (Hakimmiyah), deoband

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Authors: Ngo the Bach

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Vietnam is one of not many Asian countries that have a long-standing and famous tradition of pottery production. Vietnam is also one of three countries including China, Vietnam, and Japan developed strongly the export of ceramics to other countries. In recent decades, the studies of Vietnamese and foreign scholars on Vietnamese trade ceramics as well as Vietnamese foreign trade was initially recorded. The aim of this article is to introduce an overview of the findings situation and research results; the development of Vietnam ceramics and the Vietnamese history of maritime trade with Asian ceramics from the 14th century to the 17th century. Given that, the author systematized materials; carried out the synthetic and analysis for research results of Vietnamese and foreign researchers until now on Vietnamese export ceramics on the basis of the historical sources, archaeological findings discovered from relics in the tombs, relics of residence, relics of trading port inland, and the ancient shipwreck sank in the Asian countries.

Keywords: Vietnamese ceramics, trading, maritime, international

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Authors: Syed Toqueer Akhter, Muhammad Muzaffar Abbas

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Conflicts in Pakistan are a result of a configuration of factors, which are directly related to the system of the state, the unstable regional setting, and the geo-strategic location of Pakistan at large. This paper examines the impact of regional conflict onto the socio-political sustainability of Pakistan. The magnitude of the spillover from a conflicted region is similar in size of the equivalent increase in domestic conflict. Pakistan has gone at war three times with India; the border with India is named as the tensest borderlines of the world. Disagreements with India and lack of dispute settlement mechanisms have negatively effected the peace in the region, influx of illegal weapons and refugees from Afghanistan as an outcome of 9/11 incidence, have exasperated the criticality of levels of internal conflict in Pakistan. Our empirical findings are based on the data collected on regional conflict levels, regional trade, global trade, comparative defence capabilities of the region in contrast to Pakistan and the government regime (Autocratic, Democratic) over 1972-2007. It has been proposed in this paper that the intent of domestic conflict is associated with the conflict in the region, regional trade, global trade and the government regime of Pakistan. The estimated model (OLS) implies that domestic conflict is effected positively and significantly with long term impact of conflict in the region. Also, if defence capabilities of the region are better than that of Pakistan it effects domestic conflict positively and significantly. Conflict in neighbouring countries are found as a source of domestic conflict in Pakistan, whereas the regional trade as well as type of government regimes in Pakistan lowered the intensity of domestic conflict significantly, while globalized trade imply risk of domestic conflict to be reduced but not significantly.

Keywords: conflict, regional trade, socio-politcal instability

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Authors: Vijay Kumar, Ron Bird

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The study investigates the effect of bank-specific, industry-specific and macroeconomic variables on the profitability of conventional and Islamic banks. Our sample comprises 1,781 bank-year observations of 205 banks from four countries in the Asian region for the period 2004-2014. Our results suggest that credit quality, cost management and bank size are the keys factors that contribute positively to bank profitability in Asia. The banks with high non-performing loans and high cost-to-income ratio are more likely to be exposed to losses. The impacts of the bank-specific variables are stronger than are the industry-specific and macroeconomic variables. We find that Malaysian banks are the least profitable compared to the banks in Bangladesh, Indonesia and Pakistan. There is strong evidence to suggest that conventional banks are more profitable than Islamic banks. Our results suggest that the impact of capital adequacy ratio and bank size and loan to deposit ratio vary across Islamic and conventional banks and across different subsamples.

Keywords: capital adequacy ratio, Islamic banks, non-performing loan ratio, ownership

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Authors: Umar Sheikh Tahir

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This paper focuses on the historiography of the relationship between Logic and Arabic grammar in the Muslim Medieval Ages (a period between 750 and 1100/ 150 and 500 Ah). This sensation appears in the famous debate among many others between grammarians represented by abū Sa'id al-Sairafī and logicians represented by abū Bishr Mattā on Logic and its validity. This incident took place in Baghdad around 932 AD. However, this study singlehandedly samples these debates as the base for the contributions of Islamic philosophers to philosophy of language as well as Epistemology. The question that shapes this research is: What is the intellectual development for Muslim thinkers to philosophy of language in regards to this debate? The current research addresses the Arabic grammar and logical debates by conducting historiography to emphasize on Islamic philosophers’ concerns about this issue. Consequently, this debate generates philosophical phenomena and resolutions in deep-thinking. In addition, these dialogues create a language impression for Philosophy in Islamic world from the period under study. Thereupon, Islamic philosophers’ discourse on this phenomenon serves as contribution to the Philosophy of Language.

Keywords: debates, epistemology, grammar and grammarians, Islamic philosophy, philosophy language, logic

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Authors: Mohsen Qasemi

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In the international economic order multilateral trading system which established by General Agreement on Tariffs and Trade 1947 (GATT) was dominant until about two decades ago. Regional Trade Agreements (RTAs) have changed this order and become an important phenomenon. One of the main objectives of the World Trade Organization (WTO) as a central institution of multilateral trading system is raising standards of living. There are many scholars who suggest that WTO should take steps to protect human rights in its activities. Although it has always been opposing views who declare that since WTO has no explicit rule for human rights, it has no human rights related obligations. At the time that the WTO was established, member states began to join RTAs and since then, the escalating growth of these agreements and their effects on multilateral trading system has been controversial. There are some aspects of RTAs that have received too little attention from scholars. It is important to take a different view and evaluate the RTAs based on non-commercial aspects. The present paper seeks to answer this question: which system could be more useful in protecting human rights, RTAs or WTO?

Keywords: WTO, RTAs, human rights, multilateral trading system, non discrimination

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Authors: Vinko Vidučić, Ljiljana Vidučić, Damir Boras

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The goals of the research include the determination of the characteristics of SMEs finance in Croatia, as well as the determination of indirect growth rates of the information model of the entrepreneurs` perception of business environment. The research results show that cost of finance and access to finance are most important constraining factor in setting up and running the business of small entrepreneurs in Croatia. Furthermore, small entrepreneurs in Croatia are significantly dissatisfied with the administrative barriers although relatively to a lesser extent than was the case in the pre-crisis time. High collateral requirement represents the main characteristic of bank lending concerning SMEs followed by long credit elaboration process. Formulated information model has defined the individual impact of indirect growth rates of the remaining variables on the model’s specific variable.

Keywords: business environment, information model, indirect growth rates, SME finance

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Authors: Siti Nor Amira Bt. Mohamad, Mohamad Yazis B. Ali Basah, Muhammad Ridhwan B. Ab. Aziz, Khairil Faizal B. Khairi, Mazlynda Bt. Md. Yusuf, Hisham B. Sabri

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The understanding of risk and the concept of it occurs associated in Islamic financing was well-known in the financial industry by the using of Profit-and-Loss Sharing (PLS). It was presently in any Islamic financial transactions in order to comply with shariah rules. However, the existence of risk in Murabahah contract of financing is an ability that the counterparty is unable to complete its obligations within the agreed terms. Therefore, it is called as credit or default risk. Credit risk occurs when the client fails to make timely payment after the bank makes complete delivery of assets. Thus, it affects the growth of the bank as the banking business is in no position to have appropriate measures to cover the risk. Therefore, the bank may impose penalty on the outstanding balance. This paper aims to highlight the credit risk determinant and issues surrounding in Islamic bank in Malaysia in terms of Murabahah financing and how to manage it by using the proper techniques. Finally, it explores the credit risk management concept that might solve the problems arise. The study found that the credit risk can be managed properly by improving the use of comprehensive reference checklist of business partners on their character and past performance as well as their comprehensive database. Besides that, prevention of credit risk can be done by using collateral as security against the risk and we also argue on the Shariah guidelines and procedures should be implement coherently by the banking business because so that the risk would be control by having an effective instrument for Islamic modes of financing.

Keywords: Islamic banking, credit risk, Murabahah financing, risk mitigation

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Authors: Imen Dhaou

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This study examines conditional Value at Risk by applying the GJR-EVT-Copula model, and finds the optimal portfolio for eight Dow Jones Islamic-conventional pairs. Our methodology consists of modeling the data by a bivariate GJR-GARCH model in which we extract the filtered residuals and then apply the Peak over threshold model (POT) to fit the residual tails in order to model marginal distributions. After that, we use pair-copula to find the optimal portfolio risk dependence structure. Finally, with Monte Carlo simulations, we estimate the Value at Risk (VaR) and the conditional Value at Risk (CVaR). The empirical results show the VaR and CVaR values for an equally weighted portfolio of Dow Jones Islamic-conventional pairs. In sum, we found that the optimal investment focuses on Islamic-conventional US Market index pairs because of high investment proportion; however, all other index pairs have low investment proportion. These results deliver some real repercussions for portfolio managers and policymakers concerning to optimal asset allocations, portfolio risk management and the diversification advantages of these markets.

Keywords: CVaR, Dow Jones Islamic index, GJR-GARCH-EVT-pair copula, portfolio optimization

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Authors: Megersa Dugasa Fite

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This paper analyses regulatory and supervisory issues in the Ethiopian micro finance sector, which caters to the needs of those who have been excluded from the formal financial sector. Micro-finance has received increased importance in development because of its grand goal to give credits to the poor to raise their economic and social well-being and improve the quality of lives. The micro-finance at present has been moving towards a credit-plus period through covering savings and insurance functions. It thus helps in reducing the rate of financial exclusion and social segregation, alleviating poverty and, consequently, stimulating development. The Ethiopian micro finance policy has been generally positive and developmental but major regulatory and supervisory limitations such as the absolute prohibition of NGOs to participate in micro credit functions, higher risks for depositors of micro-finance institutions, lack of credit information services with research and development, the unmet demand, and risks of market failures due to over-regulation are disappointing. Therefore, to remove the limited reach and high degree of problems typical in the informal means of financial intermediation plus to deal with the failure of formal banks to provide basic financial services to a significant portion of the country’s population, more needs to be done on micro finance. Certain key regulatory and supervisory revisions hence need to be taken to strengthen the Ethiopian micro finance sector so that it can practically provide majority poor access to a range of high quality financial services that help them work their way out of poverty and the incapacity it imposes.

Keywords: micro-finance, micro-finance regulation and supervision, micro-finance institutions, financial access, social segregation, poverty alleviation, development, Ethiopia

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Authors: B. Seetanah, H. Neeliah

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This paper investigates the relationship among energy, emissions and economic growth in Mauritius in the presence of trade activities, with capital and labour as other control variables. Using annual data from 1960 to 2011, it is found that the variables are non-stationary and cointegrated. The relationship among the various variables are thus examined in a dynamic VECM framework. Our empirical results comply with the growth hypothesis. Output elasticities of 0.17, 0.25 and 0.43 show that increases in energy consumption cause increases in economic growth, capital accumulation and trade in the long run. We also found that CO2 negatively affects output, but has no significant effect on trade. Findings for the long-run generally tend to tally with those in the short-run. Interestingly we found that energy consumption has a significant impact on CO2 emissions. Our results tend to suggest that implementing energy conservation strategies to mitigate the negative impact of CO2 emissions can dent economic growth, and that promoting cleaner energy production could be a better alternative for Mauritius.

Keywords: energy, emissions, economic growth, export, VECM

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Authors: Marat Kozhomberdiev

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The research will investigate the modern corporate finance management technologies currently used in the era of digitalization of the global economy and the degree to which financial institutions are utilizing these new technologies in the field of corporate finance management in Kyrgyzstan. The main purpose of the research is to reveal the role of financial management technologies as joint service centers, intercompany banks, specialized payment centers in the third-world country. Particularly, the analysis of the implacability of automated corporate finance management systems such as enterprise resource planning system (ERP) and treasury management system (TMS) will be carried out. Moreover, the research will investigate the role of cloud accounting systems in corporate finance management in Kyrgyz banks and whether it has any impact on the field of improving corporate finance management. The study will utilize a data collection process via surveying 3 banks in Kyrgyzstan, namely Mol-Bulak, RSK, and KICB. The banks were chosen based on their ownerships, such as state banks, private banks with local authorized capital, and private bank with international capital. The regression analysis will be utilized to reveal the correlation between the ownership of the bank and the use of new financial management technologies. The research will provide policy recommendations to both private and state banks on developing strategies for switching and utilizing modern corporate finance management technologies in their daily operations.

Keywords: digital economy, corporate finance, digital environment, digital technologies, cloud technologies, financial management

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Authors: Amirreza Attarzadeh

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This paper aims to investigate the relationship between economic variables, e.g., inflation rate, interest rate, trade openness and the growth rate of GDP, with domestic investment. The present study also draws on conceptual economy related theories to verify the negative effect of interest rates on domestic investment. However, trade openness and growth rate had a positive correlation, and the inflation rate may have a positive or negative impact on domestic investment.

Keywords: inflation rate, growth rate of GDP, interest rate and trade openness, domestic investment

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Authors: Euphrasia Susy Suhendra, Lies Handrijaningsih

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The banking sector as an intermediary party or intermediaries occupies a very important position in bridging the needs of working capital investment in the real sector with funds owner. This will certainly make money more effectively to improve the economic value added. As an intermediary, Islamic banks raise funds from the public and then distribute in the form of financing. In practice, the distribution of funding that is run by Islamic Banking is not as easy as, in theory, because, in fact, there are many financing problems; some are caused by lacking the assessment and supervision of banks to customers. This study aims to analyze the influence of the Third Party Funds, Return on Assets (ROA), Non Performing Financing (NPF), and Financing Deposit Ratio (FDR) to Total Financing provided to the Community by Islamic Banks in Indonesia. The data used is monthly data released by Bank of Indonesia in Islamic Banking Statistics in the time period of January 2009 - December 2013. This study uses cointegration test to see the long-term relationship, and use error correction models to examine the relationship of short-term. The results of this study indicate that the Third Party Fund has a short-term effect on total funding, Return on Assets has a long term effect on the total financing, Non Performing Financing has long-term effects of total financing, and Financing deposit ratio has the effect of short-term and long-term of the total financing provided by Islamic Banks in Indonesia.

Keywords: Islamic banking, third party fund, return on asset, non-performing financing, financing deposit ratio

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Authors: Sobar M. Johari, Ida Putri Anjarsari

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In the transmission of monetary instrument towards real sector of the economy, Bank Indonesia as monetary authority has developed Islamic Bank Indonesia Certificate (abbreviated as SBIS) as an instrument in Islamic open market operation. One of the monetary transmission channels could take place through financing channel from which the fund is used as the source of banking financing. This study aims to analyse the impact of Islamic monetary instrument towards output or economic growth. Data used in this research is taken from Bank Indonesia and Central Board of Statistics for the period of January 2008 until December 2015. The study employs Granger Causality Test, Vector Error Correction Model (VECM), Impulse Response Function (IRF) technique and Forecast Error Variance Decomposition (FEVD) as its analytical methods. The results show that, first, the transmission mechanism of banking financing channel are not linked to output. Second, estimation results of VECM show that SBIS, PUAS, and FIN have significant impact in the long term towards output. When there is monetary shock, output or economic growth could be recovered and stabilized in the short term. FEVD results show that Islamic banking financing contributes 1.33 percent to increase economic growth.

Keywords: Islamic monetary instrument, Islamic banking financing channel, economic growth, Vector Error Correction Model (VECM)

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Authors: Caroline S. Dutra, Tatiana C. Squeff

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It is well known that the history between South Korea and Japan influences their international relations; thus, also encompassing their economic relations. In this sense, it is impossible to analyze the latter without understanding the development of the former, which is known for episodes of hostility, like on Japanese colonization, but also had moments of cultural and trade interexchange. Indeed, since 1965, with the establishment of diplomatic relations between both countries, their trade relations have improved, especially after both nations have signed the General Agreement on Tariffs and Trade (GATT). Thereafter, with the establishment of the World Trade Organization (WTO) in 1995, another chapter of their diplomatic and economic relations have been inaugurated. Hence, bearing in mind this history between both nations, this research intends to examine their relations through the analysis of the WTO panels they have engaged in between each other, which are, in chronological order, “DS323: Japan – Import Quotas on Dried Laver and Seasoned Laver”, “DS336: Japan - Countervailing Duties on Dynamic Random Access Memories from Korea”, “DS495: Korea - Import Band, and Testing and Certification Requirements for Radionuclides”, “DS553: Korea - Sunset Review of Anti-Dumping Duties on Stainless Steel Bars” and “DS571: Korea - Measures Affecting Trade in Commercial Vessels”. The objective of this case analysis is to point out what are the areas that are more conflictual between Japan and South Korea in regard to their economic relations so that it is possible to assert on their future (economic) relations and other possible outcomes. And in order to do so, bibliographic and documental research will be made, particularly those involving the WTO and the nations under consideration. Regarding the methods used, it is important to highlight that this is applied research in the field of international economic relations and international law, which follows a hypothetic-deductive model.

Keywords: international economic relations, Japan, South Korea, World Trade Organization

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Authors: Moh’d A. AL-Shboul

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Recently, and due to Arab spring and terrorism around the globe, pushing and driving most governments potentially to harmonize their border measures particularly the regional and an international transit trade within and among Customs Unions. The main purpose of this study is to investigate and provide an insight for monitoring and controlling the trade supply chain within and among different countries by using technological advancement (i.e. an electronic tracking system, etc.); furthermore, facilitate the local and intra-regional trade among countries through reviewing the recent trends and practical implementation of an electronic transit traffic and cargo that related to customs measures by introducing and supporting some case studies of several international and landlocked transit trade countries. The research methodology employed in this study was described as qualitative by conducting few interviews with managers, transit truck drivers, and traders and reviewing the related literature to collect qualitative data from secondary sources such as statistical reports, previous studies, etc. The results in this study show that Jordan and other countries around the globe that used an electronic tracking system for monitoring transit trade has led to a significant reduction in cost, effort and time in physical movement of goods internally and crossing through other countries. Therefore, there is no need to escort transit trucks by customs staff; hence, the rate of escort transit trucks is reduced by more than ninety percent, except the bulky and high duty goods. Electronic transit traffic has been increased; the average transit time journey has been reduced by more than seventy percent and has led to decrease in rates of smuggling up to fifty percent. The researcher recommends considering Jordan as regional and international office for tracking electronically and monitoring the transit trade for many considerations.

Keywords: electronic tracking system, facilitation system, regional and international corridor, supply chain security, transit trade

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Authors: Dchieche Amina, Aboulaich Rajae

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Profit and loss sharing suggests an equitable sharing of risks and profits between the parts involved in a financial transaction. Salam is a contract in which advance payment is made for goods to be delivered at a future date. The purpose of this work is to price a new contract for profit and loss sharing based on Salam contract, using Khiyar Al Ghabn which is an agreement of choice in case of misrepresent facts.

Keywords: Islamic finance, shariah compliance, profit and loss sharing, derivatives, risks, hedging, salam contract

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Authors: Vithul Kalki

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The mainstream political economy failed to explain the nature and causes of systemic failures and thus to compare and comprehend how contemporary capitalist systems work. An alternative research framework of Critical Macro-Finance (CMF) is an attempt to collaborate political theory with post-Keynesian economics with an objective to find answers to unresolved questions that emerged since the international financial crisis and repeated failures of capital systems. This unorthodox approach brings out four main propositions, namely : (a) that the adoption of American financial practices has anchored financial globalization in market-based finance; (b) that global finance is a set of interconnected, hierarchical balance sheets, increasingly subject to time-critical liquidity; (c) that credit creation in market-based finance involves new forms of money; and (d) that market-based finance structurally requires a de-risking state capable both of protecting systemic liabilities and creating new investment opportunities. The ongoing discussion of CMF literature is yet to be tested or even fully framed. This qualitative paper will critically examine the CMF framework and will engage in discussions aiming to connect the CMF with theories of capitalism in a wider context to bring a holistic approach for analyzing contemporary financial capitalism.

Keywords: critical macro-finance, capitalism, financial system, comparative political economy

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Authors: Mohammad Yousaf Safi Mohibullah Afghan

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The study made on Islamic and conventional banks scrutinizes the risks interconnected with credit and liquidity on the productivity performance of Islamic and conventional banks that operate in Pakistan. Among the banks, only 4 Islamic and 18 conventional banks have been selected to enrich the result of our study on Islamic banks performance in connection to conventional banks. The selection of the banks to the panel is based on collecting quarterly unbalanced data ranges from the first quarter of 2007 to the last quarter of 2017. The data are collected from the Bank’s web sites and State Bank of Pakistan. The data collection is carried out based on Delta-method test. The mentioned test is used to find out the empirical results. In the study, while collecting data on the banks, the return on assets and return on equity have been major factors that are used assignificant proxies in determining the profitability of the banks. Moreover, another major proxy is used in measuring credit and liquidity risks, the loan loss provision to total loan and the ratio of liquid assets to total liability. Meanwhile, with consideration to the previous literature, some other variables such as bank size, bank capital, bank branches, and bank employees have been used to tentatively control the impact of those factors whose direct and indirect effects on profitability is understood. In conclusion, the study emphasizes that credit risk affects return on asset and return on equity positively, and there is no significant difference in term of credit risk between Islamic and conventional banks. Similarly, the liquidity risk has a significant impact on the bank’s profitability, though the marginal effect of liquidity risk is higher for Islamic banks than conventional banks.

Keywords: islamic & conventional banks, performance return on equity, return on assets, pakistan banking sectors, profitibility

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Authors: Luqman Afolabi

Abstract:

This paper measures the impacts of trade and institutions on environmental quality in Sub-Saharan Africa (SSA). To examine the direction and the magnitude of the effects, the study employs the pooled mean group (PMG) estimation technique on the panel data obtained from the World Bank’s World Development and Governance Indicators, between 1996 and 2018. The empirical estimates validate the environmental Kuznets curve hypothesis (EKC) for the region, even though there have been inconclusive results on the environment – growth nexus. Similarly, a positive coefficient is obtained on the impact of trade on the environment, while the impact of the institutional indicators produce mixed results. A significant policy implication is that the governments of the SSA countries pursue policies that tend to increase economic growth, so that pollutants may be reduced. Such policies may include the provision of incentives for sustainable growth-driven industries in the region. In addition, the governance infrastructures should be improved in such a way that appropriate penalties are imposed on the pollutants, while advanced technologies that have the potentials to reduce environmental degradation should be encouraged. Finally, it is imperative from these findings that the governments of the region should promote their trade relations and the competitiveness of their local industries in order to keep pace with the global markets.

Keywords: environmental quality, institutional quality sustainable development goals, trade

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Authors: Ariyanti Mustapha

Abstract:

The development of Islamic jurisprudence since the first century of hijra has fascinated many orientalists to explore the historiography of Islamic legislation. The practice of uÎËl fiqh began during the lifetime of the Prophet Muhammad and was continued by the companions as the legal reasoning due to the absence of the legal injunction in the QurÉn and Sunnah. The orientalists propagated that the Roman and Jewish legislation were transplanted in Islamic jurisprudence and it was the primary reason for its progression. This article focuses on the analysis of foreign elements transplanted in the uÎËl fiqh as mentioned by Ignaz Goldziher and Joseph Schacht. They insisted the methodology of Sunna and IjtihÉd were authentically from Roman and Jewish legislation, known as Mishnah and Ha-Kol were invented and transplanted as the principles in uÎËl fiqh. The author used qualitative and comparative methods to analyze the orientalists’ views. The result showed that many erroneous facts were propagated by Goldziher and Schacht by claiming the parallels between the principles, methodologies, and fundamental concepts in uÎËl fiqh and Roman Provincial law. They insisted Sunna and IjtihÉd as an invention from the corpus of Jewish Mishnah and Ha-kol and further affirmed by Schacht that Islamic jurisprudence began in the second century of hijra. These judgments are used by the orientalists to prove the inferiority of Islamic jurisprudence. Nevertheless, many evidences has proven that Islamic legislation is capable of developing independently without any foreign transplant.

Keywords: foreign transplant, ijtihad, orientalist, USUL Fiqh

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Authors: Gebrehiwot H., Giorgis Bahita

Abstract:

Firms in Africa experience less financial market in comparison to other emerging and developed countries, thus lagging behind the rest of the world in terms of innovation and growth. Though there are different factors to be considered, underdeveloped financial systems take the lion's share in hindering firm innovation and growth in Africa. Insufficient capacity to innovate is one of the problems facing African businesses. Moreover, a critical challenge faced by firms in Africa is access to finance and the inability of financially constrained firms to grow. Only little is known about how different sources of finance affect firm innovation and growth in Africa, specifically the formal and informal finance effect on firm innovation and growth. This study's aim is to address this gap by using formal and informal finance for working capital and fixed capital and its role in firm innovation and firm growth using firm-level data from the World Bank enterprise survey 2006-2019 with a total of 5661 sample firms from 14 countries based on available data on the selected variables. Additionally, this study examines factors for accessing credit from a formal financial institution. The logit model is used to examine the effect of finance on a firm’s innovation and factors to access formal finance, while the Ordinary List Square (OLS) regression mode is used to investigate the effect of finance on firm growth. 2SLS instrumental variables are used to address the possible endogeneity problem in firm growth and finance-innovation relationships. A result from the logistic regression indicates that both formal and informal finance used for working capital and investment in fixed capital was found to have a significant positive association with product and process innovation. In the case of finance and growth, finding show that positive association of both formal and informal financing to working capital and new investment in fixed capital though the informal has positive relations to firm growth as measured by sale growth but no significant association as measured by employment growth. Formal finance shows more magnitude of effect on innovation and growth when firms use formal finance to finance investment in fixed capital, while informal finance show less compared to formal finance and this confirms previous studies as informal is mainly used for working capital in underdeveloped economies like Africa. The factors that determine credit access: Age, firm size, managerial experience, exporting, gender, and foreign ownership are found to have significant determinant factors in accessing credit from formal and informal sources among the selected sample countries.

Keywords: formal finance, informal finance, innovation, growth

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Authors: M. S. Riyazulla

Abstract:

Since the dawn of the 21st century, there has been a perceptible decline in Islamic supremacy in world affairs, apart from the gradual waning of the amiable relations and relevance of Islamic countries in the International political arena. For a long, Islamic countries have been marginalised by the superpowers in the global conflicting issues. This was evident in the context of their recent invasions and interference in Afghanistan, Syria, Iraq, and Libya. The leading International Islamic organizations like the Arab League, Organization of Islamic Cooperation, Gulf Cooperation Council, and Muslim World League did not play any prominent role there in resolving the crisis that ensued due to the exogenous and endogenous causes. Hence, there is a need for Islamic countries to create a credible International Islamic organization that could dictate its terms and shape a new Islamic world order. The prominent Islamic countries are divided on ideological and religious fault lines. Their concord is indispensable to enhance their image and placate the relations with other countries and communities. The massive boon of oil and gas could be synergistically utilised to exhibit their omnipotence and eminence through constructive ways. The prevailing menace of Islamophobia could be abated through syncretic messages, discussions, and deliberations by the sagacious Islamic scholars with the other community leaders. Presently, as Muslims are at a crossroads, a dynamic leadership could navigate the agitated Muslim community on the constructive path and herald political stability around the world. The present political disorder, chaos, and economic challenges necessities a paradigm shift in approach to worldly affairs. This could also be accomplished through the advancement in science and technology, particularly space exploration, for peaceful purposes. The Islamic world, in order to regain its lost preeminence, should rise to the occasion in promoting peace and tranquility in the world and should evolve a rational and human-centric solution to global disputes and concerns. As a splendid contribution to humanity and for amicable international relations, they should devote all their resources and scientific intellect towards space exploration and should safely transport man from the Earth to the nearest and most accessible cosmic body, the Moon, within one hundred years as the mankind is facing the existential threat on the planet.

Keywords: carboniferous period, Earth, extinction, fossil fuels, global leaders, Islamic glory, international order, life, marginalization, Moon, natural catastrophes

Procedia PDF Downloads 44