Relationship Between Immaterial Capital and Performance of Islamic Banks: Empirical Study of Listed Banks in Bahrein and United Arab Emirates

The aim of this study is to investigate the relationship between immaterial capital and financial performance of eighteen listed Islamic and conventional banks in Bahrein and United Arab Emirates for the year 2018. Data is obtained from annual reports of banks. The approach used to analyze the efficiency of banks is Value added intellectual coefficient (VAIC). The financial performance of the selected banks for this study is evaluated by ROA and ROE measures. The immaterial capital (and its components human capital and structural capital) of banks have been analyzed and their impact on financial performance has been estimated using multiple regression technique. The results show that the VAIC value is the same for Islamic banks and conventional banks. The findings show that VAIC is positively associated with ROA while the three components of VAIC showed mix results on banks’ performance. In the context of knowledge economy, the VAIC approach may be convenient for the banks and policy makers to integrate the immaterial capital in the decision-making process. A future study including listed banks in all countries of Gulf Cooperation Council (GCC) could provide a better evaluation of the impact of immaterial capital on financial performance for the banking sector, especially Islamic banking. Keywords: Immaterial Capital, Performance, Islamic Banks, Efficiency, Value Added Intellectual Coefficient (VAIC) DOI: 10.7176/JESD/11-6-07 Publication date:March 31st 202

Relationship between Corporate Social Responsibility and Financial Performance in Islamic Banking

The aim of this study is to evaluate the level of Corporate Social Responsibility Disclosure in Islamic banks and to analyze the relationship between performance indices Return On Average Assets (ROA) and Return On Equity (ROE) with the corporate social responsibility disclosure. An empirical analysis is conducted, based on the annual reports of 8 Islamic banks for years 2009 and 2010.  A Corporate Social Responsibility Disclosure Index (CRSDI) is constructed. To verify the link between ROA, ROE and CSRDI, regression models are run. The results indicate a lack in disclosing Corporate Social Responsibility, and the regression models show that there is no relation statistically significant between performance indices (ROA, ROE) and CSRD index. Keywords: Islamic bank, ROA, ROE, Corporate Social Responsibility Disclosure, Regression, Content Analysi

Investigation of heavy metal contamination and ecological and health risks in farmland soils from southeastern phosphate plateaus of Khouribga (Morocco)

The present study was conducted in the SE area of phosphate plateaus (Khouribga) located in central Morocco. It attempted to assess the heavy metal (HM) (Cd, Cr, Cu, Pb, Zn) contamination in the farmland soils and their potential ecological hazard and non-non-carcinogenic risks using various pollution indices, magnetic susceptibility (MS), and Geographical Information System (GIS) methods. A total of 41 soil samples were collected and analyzed for pH, electrical conductivity (EC), grain-size, organic matter (OM), calcium carbonate (CaCO3), and MS and HM elements. The results showed a mean dominance order of Zn>Cr>Cu>Pb>Cd where mean concentrations of HMs, except Pb, exceeded their local background and Food and Agriculture Organization (FAO) and World Health Organization (WHO) permissible guidelines. The values of geo-accumulation index (Igeo), nemerow pollution index (PI), and pollution load index (PLI) revealed significant high level of HM contamination in soils. The MS values showed a spatial distribution pattern similar to those of HMs, attesting the ability of the MS method for mapping the contaminated soils. Agricultural and mining activities and geologic materials were the main sources of HM accumulation. According to the potential ecological risk index (RI) (195.93<RI<1092.53), the soil samples had moderate (65.85%) to high ecological (34.15%) risk. The hazard index (HI) showed that adults and children are not exposed to non-carcinogenic risk from the studied HMs, apart from two soil samples where Cd posed health risks to children compared to the other studied HMs. The statistical results revealed that soils are polluted by anthropogenic activities. Accordingly, effective agricultural practices that respect the environment, including the reduction of inputs as fertilizers, pesticides, herbicides, and fungicides should be required to guarantee the safety of cropland and the residents in the studied area. Hence, the findings from this study provided some useful information for soil pollution control and management in the study area

Dynamic correlations and volatility linkages between stocks and sukuk: evidence from international markets

An understanding of volatility and co-movements in financial markets is important for portfolio allocation and risk management practices. The current financial crisis caused a shrinkage in values of most assets, an increased volatility and a threat to the survival of several institutional investors. Managing risks and returns within the classic portfolio theory, when correlations across securities soar, is increasingly challenging. In this paper, we investigate the volatility behavior and the co-movements between sukuk and international stock indexes. Symmetric multivariate GARCH models with dynamic conditional correlations (DCC) were estimated under student-t distribution. We provide evidence of high correlations between sukuk and US and EU stock markets, without finding the well-known flight to quality behavior affecting Islamic bonds. We also show that volatility linkages between sukuk and regional market indexes are higher during financial crisis. We argue that investors could obtain diversification benefits including sukuk in a well \u2013diversified equity portfolio, given their lower volatility compared to equity. But higher volatility linkages and dynamic correlations during financial crises show that they are hybrid instruments between bonds and equity. Our findings are relevant for institutional investors and asset managers, that include Islamic bonds in a diversified portfolio