Journal of Islamic Accounting and Business Research

Widiastuti, Tika; Cahyono, Eko Fajar; Zulaikha, Siti; Mawardi, Imron; Al Mustofa, Muhammad Ubaidillah

2021 Journal of Islamic Accounting and Business Research

doi: 10.1108/jiabr-09-2020-0307

This study aims to formulate a strategy for optimizing zakat governance in zakat institutions in East Java Province by identifying priority problems, creating solutions and developing strategies.Design/methodology/approachThis qualitative research uses the analytical network process method. Ten respondents representing practitioners, academics, associations and regulators were selected for their expertise in zakat governance. The data were processed using Super Decision software program and Excel.FindingsPriority issues in optimizing zakat governance found in this study are lack of information on Mustahik’s needs and development to Muzakki and the low motivation and ability of Mustahik to develop. Improving the quality and capacity of Amil’s, especially in the technological aspect, is a priority solution. The priority strategy considers intensification (by developing Amil’s ability to use technology) and extensification (by increasing Amil’s numbers who master technology).Practical implicationsThe results highlight the urgency of increasing Amil’s capacity and capability in technology-based zakat management. Zakat institutions need to prepare for management’s transformation toward zakat technology as one of the priorities in optimizing zakat governance.Originality/valueProblems, solutions and strategies for optimizing zakat governance are collected by connecting it to the Zakat Core Principles, namely, the ninth principle of collection management and the tenth principle of distribution management. Further, for identifying problems, solutions and strategies, four aspects must be considered of Amil, Muzakki, Mustahiq and other supporting elements to present better policies to optimize zakat governance.

Martín-Cervantes, Pedro Antonio; Cruz Rambaud, Salvador; Valls Martínez, María del Carmen

2021 Journal of Islamic Accounting and Business Research

doi: 10.1108/jiabr-12-2020-0364

This paper aims to examine the functioning and organizational structure of the historic Andalusian water courts, institutions of Islamic origin whose basic model should be considered in light of the regulation of modern Islamic banking and finance.Design/methodology/approachThe methodology of this study has been focused on the contextualization of al-Andalus during the European Middle Ages, highlighting its enormous contributions and implications in the creation of Western knowledge. In the same way, the ordinances of the Castilian-Aragonese kings, aimed at the persistence of the Andalusian water courts in the Southeast of Spain after the Muslim period, have been used as the main sources of reference.FindingsThis research has detected that the main features of the Andalusian water courts, i.e. integrity, democracy, transparency, credibility, moral authority or simplicity (among many others), can be conveniently replicated in the scope of the current Islamic banking and finance.Research limitations/implicationsSeveral implications can be derived from this study: first, it highlights the total resilience of a regulatory model that “it was already there,” given by the history of the Andalusian civilization. This model will be always welcomed by the Muslim community in Western countries as it is a matter of regulating themselves according to the way their ancestors did. The main limitation faced by this research is the relative scarcity of original sources, which is justifiable given that most of the royal ordinances come from the 13th century, having unfortunately lost a good number of sources over time.Originality/valueThis paper seeks a feasible alternative to the controversy arising from the resolution of possible disputes in Islamic banking and finance taking into account that Western judges do not know (nor do they have to) the principles on which this discipline is based. The application of the historical Andalusian model would allow the creation of an independent jurisdiction, while subordinated to the established juridic power, without contravening the principle of “jurisdictional unity.” The last element that gives an added value to this research is spreading the achievements of the Andalusian culture and civilization, unjustly omitted by a great part of the existing literature.

Arshed, Noman; Kalim, Rukhsana

2021 Journal of Islamic Accounting and Business Research

doi: 10.1108/jiabr-02-2020-0048

This study aims to develop and estimate the Musharaka demand and supply model for full-fledged Islamic banks to explore patterns and stability of Musharaka equilibrium in the market.Design/methodology/approachThis quantitative study uses a deductive approach to explore financial statement-level data of 30 Islamic banks of six countries between 2012 and 2017.FindingsThe results show that the Musharaka market is stable when Musharaka demand is purchase price elastic and supply is sale price inelastic. It indicates that the current banking industry is unable to increase supply when there is an increase in Musharaka returns. In comparison, industry demand for Musharaka is increasing at a higher rate, corresponding to a decrease in Musharaka price.Practical ImplicationsThis study is fundamental in estimating the market stable market returns and market quantity of Musharaka financing. If market returns and quantity deviate, market forces will push it to equilibrium.Originality/valueThe theoretical and empirical studies worked on the application and suitability of Musharaka financing. However, they failed to explain demand and supply forces in determining the level of Musharaka financing in the economy using empirical data. Without an equilibrium model, policymakers would be unable to predict the movement of the Islamic stock market index (the price of Musharaka financing) and the incidence of Musharaka financing. Further, it is not possible to apply expansionary intervention by policymakers if the stability of the market is unknown.

Kasri, Rahmatina Awaliah; Yuniar, Adela Miranti

2021 Journal of Islamic Accounting and Business Research

doi: 10.1108/jiabr-08-2020-0258

This study aims to determine the factors that influence the intention to use online platforms in paying zakat in Indonesia.Design/methodology/approachThis study used the extended unified theory of acceptance and use of technology as the theoretical framework, where zakat literacy is added to the model’s main components (i.e. performance expectancy, effort expectancy, facilitating condition and social influence). Primary data was collected through an online survey involving 223 Indonesian Muslims who have used various online channels to pay zakat and analyzed by using structural equation modeling as the empirical approach.FindingsThe findings indicate that performance expectancy, effort expectancy, facilitating condition and zakat literacy significantly affect the intention to use an online platform to pay zakat in Indonesia. However, social influence is found to be insignificant in this study.Research limitations/implicationsThe study used a relatively small sample size compared to the Indonesian population’s size. Thus, the results must be interpreted with the sample observed.Practical implicationsZakat organizations should make sure that their system is easy for people to make an online zakat payment, as easy access is the most important factor influencing the intention to pay zakat online. They must also increase efficiency and effectiveness of the payment system, enhance quality of the organizational and technical infrastructures and contribute to improving zakat literacy together with other zakat stakeholders.Originality/valueThis study offers new insights related to the quantitative study on digital zakat and behavior of zakat payers, particularly in Indonesia.

Danila, Nevi; Kamaludin, Kamilah; Sundarasen, Sheela; Bunyamin, Bunyamin

2021 Journal of Islamic Accounting and Business Research

doi: 10.1108/jiabr-05-2020-0166

The purpose of this paper is to examine investor sentiment by measuring the impact of market sentiment shocks on the volatility of the Islamic stock index of five ASEAN countries, with noise traders as a proxy for market sentiment.Design/methodology/approachThe GJR-GARCH model is used to capture the empirically observed fact that negative shocks in the past period have a stronger impact on variance than positive shocks in the present.FindingsAll five ASEAN Islamic stock indices show clustering volatility. However, only three countries, namely, Malaysia, Thailand and Singapore, demonstrate leverage effects. In addition, the effect of market sentiment on Islamic stock index returns is observed in the Indonesian and Malaysian markets, which are the two largest Islamic markets with a dominant Muslim population in the ASEAN. This finding implies that the trading behaviours of Muslim investors in the Shariah market are the same as their behaviours in the conventional market, that is, nonadherence to the Sunnah.Practical implicationsWhilst establishing investment strategies, creating portfolios and providing client-advisory services, investors and fund managers should factor in the presence of market sentiment and its impact on stock performance and volatility. In addition, a capital market system preventing rumour-based transactions is compelling.Social implicationsIn some markets, the Islamic financial products awareness should be increased through education to attract increased domestic investors with the potential to boost growth in the Islamic stock market.Originality/valueInvestigation market sentiment impacts on the Islamic stock index using noise traders as a proxy.

Umar, Umar Habibu; AbuBakar, Mustapha; Baita, Abubakar Jamilu; Kademi, Tasiu Tijjani; Haron, Md Harashid

2021 Journal of Islamic Accounting and Business Research

doi: 10.1108/jiabr-05-2020-0171

The purpose of this study is to examine the contribution of academic and professional institutions in promoting the awareness and knowledge of Islamic banking and finance in Nigeria.Design/methodology/approachThe data were generated through a documentary research method by examining the Benchmark Minimum Academic Standards (BMAS) for Nigerian universities and Nigerian university curricula for the relevant undergraduate programs, as well as examination syllabi and training brochures for the relevant professional associations.FindingsThe study found that universities do not promote significantly the awareness and knowledge of Islamic banking and finance. Similarly, the relevant professional associations through their examinations and training programs contribute little or nothing to the promotion of awareness and knowledge.Research limitations/implicationsThis study solely relied upon documentary evidence upon which the findings were based. In addition, for academic institutions, only undergraduate BMAS and curricula were examined.Practical implicationsThere should be collaborations between the National University Commission of Nigeria, relevant Islamic and non-Islamic professional bodies and Nigerian Universities to ensure that courses (subjects) that could promote the awareness and knowledge of Islamic banking and finance are fully integrated into academic and professional curricula and training programs.Social implicationsThe integration of an adequate number of relevant courses/topics into academic curricula and professional institution examination syllabi and their Mandatory Continuing Professional Development programs would greatly contribute to the production of competent and skillful employees to work for the growth and development of the Islamic banking and finance industry.Originality/valueThis study provides better ways of ensuring that knowledgeable and qualified employees are produced to work for the sustainability of the global Islamic banking and finance industry.

Alam, Md. Kausar

2021 Journal of Islamic Accounting and Business Research

doi: 10.1108/jiabr-08-2019-0154

The purpose of this paper is to focus on conceptualizing the origin of legitimacy, the legitimation process and its trustworthiness toward the people, regulators, society and stakeholders. In achieving the purpose of the study, an inclusive research gap concerning the roles of the Shariah Supervisory Board (SSB) as a Shariah regulatory authority or an internal mechanism of Shariah Governance Framework (SGF) in the development and formation of Islamic financial institutions (IFIs) would also be addressed.Design/methodology/approachThe paper implements an analytical approach to investigate the legitimation process of SSB, and its presence, significance, as well as credibility to the stakeholders.FindingsThis study proposes an additional authority of legitimacy, namely, SSB/Shariah regulatory authority, along with regulators, professionals and people. These could be derived from the internal mechanism of Shariah Governance (SG) practices of IFIs. The study also proposes another type of legitimacy (ethical/Shariah legitimacy) that derives from the organizational SG practices through its internal mechanisms. The formation of SSB is mandatory and more significant for the isomorphic identification of IFIs, SG system, legitimacy and broader acceptance to stakeholders.Research limitations/implicationsThe rational argument shows that SSB legitimates the overall functions of IFIs, SG practices, processes and structures. It is more apposite because it has substantial validity, dominance, recognition and acceptability along with three external bodies. Besides, IFIs and their SG do not have the proper value to the general people, society, regulators and other stakeholders without the legitimization of SSB. Thus, theorists and academicians may consider SSB as the fourth party of legitimacy along with three legitimacy providing authorities (regulators, professionals and people).Originality/valueThe paper focuses on illustrating and extending the border knowledge concerning the legitimacy from SG and how do SSBs legitimize IFIs and enhance their credibility to the general people, government, society and other stakeholders. The paper first clarified the internal legitimacy concerning SGF and contributed to the area of Islamic finance, legitimacy, institutional theory, legitimacy theory and internal legitimacy.

Hassi, Abderrahman; Balambo, Mohammed Amine; Aboramadan, Mohammed

2021 Journal of Islamic Accounting and Business Research

doi: 10.1108/jiabr-05-2020-0131

Given the growing importance of spirituality and religion-related factors in the workplace, this paper aims to analyze the effects of spirituality, intrinsic religiosity and Islamic work ethics (IWE) on employee job performance.Design/methodology/approachBuilding on these theoretical concepts and perspectives, the authors hypothesized that employee intrinsic motivation mediated these proposed effects. To verify these propositions, the authors examined data collected from 224 full-time employees working for various organizations in Morocco. The authors conducted structural equations modeling (SEM) analyses using the AMOS 24 platform and Bayesian analyses to investigate direct and indirect effects.FindingsFirst, the authors found that only IWE has positive and significant direct effect on job performance. Second, the findings indicate that employee intrinsic motivation does not mediate the relationship between the independent variables of spirituality and intrinsic religiosity and the dependent variable of job performance. These results may be because of the fact that Islamic principles and values are implemented and more reinforced in the Moroccan workplace than new and modern concepts such as intrinsic religiosity and spirituality.Research limitations/implicationsThe present paper used a cross-sectional methodology, which did not allow testing causation between the constructs under study.Practical implicationsOrganizations and managers alike ought to resort to IWE insights with the objective to increase the performance of their Muslim members.Originality/valueThis paper is novel as it represents a study on spirituality in a non-Western context. It also uses a relatively sizeable sample (N = 224) of full-time employees in the workplace.