Islamic Banking Performance in the Middle East: A Case Study of Jordan

Islamic banking in Jordan started around two decades ago. Since then it has played an important role in financing and contributing to different economics and social sectors in the country in compliance with the principles of Shariah rules in Islamic banking practices. Since there have been limited studies on the financial performance of Islamic banks in the country. The aim of this paper is to examine and analyse the Jordanian experience with Islamic banking, and in particular the experience for the first and second Islamic bank in the country, Jordan Islamic Bank for Finance and Investment (JIBFI), and Islamic International Arab Bank (IIAB) in order to evaluate the Islamic banks’ performance in the county. The paper goes further to shed some light on the domestic as well as global challenges, which are facing this sector. However, this paper used the performance evaluation methodology by conducting the profit maximization, capital structure, and liquidity tests. This paper found that the efficiency and ability of both banks has increased and both have expanded their investment and activities and had played an important role in financing projects in Jordan. Another interesting finding of the paper that these banks have focused on the short-term investment, perhaps this seems to be the case in most Islamic banking practices. Another finding is that the Bank for Finance and Investment (JIBFI) has a high profitability that encourages other banks to practice the Islamic financial system. The paper also found that Islamic banks have a high growth in the credit facilities and in profitability.Islamic banking, Performance, Efficiency, Challenges, Jordan

The nexus between debt structure, firm performance, and the financial crisis: non-linear panel data evidence from Japan

This study seeks to analyze the non-linear relationship between a firm's debt structure and performance based on evidence from Japan through the use of a panel data fixed effects model for a sample of 1,670 listed firms. This is the first study that looks at the effect of the short-term debt threshold on corporate performance, as well as the influence of the 2008 global financial crisis (GFC) on the nonlinear effect of debt structure on corporate performance. Moreover, it represents an initial endeavor that uses cross-industry comparisons to scrutinize the nonlinear effect of debt structure on the performance of Japanese companies. This study's findings reveal the presence of a nonlinear impact of debt with short-term maturity on corporate performance. In addition, there is a U-shaped relationship between firm performance and short-term debt, suggesting that a firm's profit decreases at lower levels of short-term debt (below 45.2%) and increases at higher levels of debt with short-term maturity. Moreover, this short-term debt threshold was affected significantly by the financial crisis. 2022 Informa UK Limited, trading as Taylor & Francis Group.Scopu

Does minority management affect a firm's capital structure? Evidence from Japan

This study evaluates the effect of minority management (MG) on capital structure for a sample of listed Japanese companies over three sectors. We used a dynamic panel, threshold-based model that can control for endogeneity to investigate the linkage between the speed of adjustment of leverage and MG, with the results proving that there is significant linkage between MG and leverage. We also observed that the level of MG has a threshold effect on leverage, such that firms with a high level of MG can reach their optimal leverage faster than those with a low level of MG. 2022We would like to thank the Editor-in-Chief Prof. Jonathan Batten and the anonymous reviewers for their helpful comments and suggestions. Other errors are our own.Scopu

The dynamics of the relationship between real estate and stock markets in an energy-based economy: The case of Qatar

In this study, we investigate the dynamic linkages between the real estate and stock markets in Qatar. Using monthly data over the period 2006-2020, the nonlinear model of Enders and Siklos (2001) and the linear and nonlinear Autoregressive Distributed Lag (ARDL) models, our investigation seeks to trace the channel of transmission between the two markets outlined by two well-known theories: namely, the effects of wealth and of credit. The results show that the model of Enders and Siklos (2001) does not explain the dynamics of the relationship between the two markets. The linear ARDL provides some evidence to support the wealth effect but the model is mis-specified. The results from the nonlinear ARDL model support to the effect of wealth and provide evidence on the dynamic linkages between the two markets in the short run as well as the long run. In addition, when money supply, bank credit, oil prices, and currency reserves are in a downturn, we find a long-run relationship between their rate of decline and that of real estate prices, but in an upturn, the rate of increase of real estate prices has a long-run relationship with the rate of increase in the inflation rate. Our results show that the nonlinear ARDL model passes a battery of rigorous tests of robustness. The implications of the empirical results are also discussed. 2021 Elsevier B.V.Scopu

Conditional dependence structure and risk spillovers between Bitcoin and fiat currencies

This paper investigates the extreme dependence and risk spillovers between Bitcoin and the currencies of the BRICS and G7 economies. We find time-varying dependence between Bitcoin and all currencies. Moreover, when analysing risk spillovers from Bitcoin to currencies, we find that Bitcoin exercises significant power over most currencies, with the South African rand and Brazilian real holding both the highest downside and upside risk before and during the COVID-19 pandemic period, respectively. When considering risk spillovers from currencies towards Bitcoin, the Japanese yen exhibits the highest downside spillovers. Importantly, we find asymmetric spillovers between extreme upward and downward movements

Capital Structure Influence on Construction Firm Performance

The interconnectedness between capital structure and firm performance is a topic of high interest among scholars and management alike. The scholars tend to unveil the why segment of the relationship, while the management looks into the how side to promote capital structure policy which can optimise the firm performance. While many studies have looked into this relationship across multiple industries and spanning across decades of data, the current study trains its lens on Malaysian public listed company companies which operate in the construction sector, and with data window between 2010 to 2014. This specific sector was chosen for their high gearing which renders firms to relatively high insolvency exposure emanating from interest rate fluctuations. The five-year timeframe was selected to isolate potential data contaminations streaming from global financial crisis which winds down in 2009. Financial data of the company were extracted from Bloomberg Terminal based on a pre-prepared list of Bloomberg tickers. A total of 225 observations were recorded in this study. Using Tobins Q as a proxy for firm performance, this study finds a mixed result where short term debts ratio indicates a significant negative effect, while long term debt ratio presents a non-significant influence. Explanations on this output are therefore discussed in this paper

The resilience of green bonds to oil shocks during extreme events

Investments in green energy are increasing exponentially due to rising environmental concerns. Our work scrutinizes the influence of decomposed structural oil shocks on the green bonds in developed countries from November 28, 2008 to May 21, 2021. We use contemporary time-varying methodologies including nonlinear causality and rolling window wavelet correlation tests. We find that green bonds remain strongly correlated with demand and supply shocks in the long run, particularly the green bonds in the UK, US, Japan, and Switzerland during the crisis periods. Japan shows a strong positive correlation with demand shocks over the long run but negative correlation in the short run. In contrast, Norway, New Zealand, and Sweden's green bonds have a positive correlation with supply and demand shocks during the short-run period. Our results carry useful implications for investors and policymakers

Do oil shocks affect the green bond market?

This study examines the predictive power of oil shocks for the green bond markets. In line with this aim, we investigated the extent to which oil shocks could be used to accurately make in- and out-of-sample forecasts for green bond returns. Three striking findings emanated from our results: First, the three types of oil shock are reliable predictors for green bond indices. Second, the performances of the predictive models were consistent across the different forecasting horizons (i.e. H = 1 to H = 24). Third, our findings were sensitive to classifying the dataset into pre-COVID and COVID eras. For instance, the results confirmed that the predictive power of oil shocks declined during the crisis period. We also discuss some policy implications of this study's findings

Decarbonising the power sector of the Dominican Republic : an approach from electric mobility transition

Highlights: This paper analyses the decarbonisation of the power and transport sector by integrating electric mobility. -- Achieving the NDC regarding CO2eq emissions implies coal-fired power plants accelerated conversion. -- Long-run benefits of decarbonisation implicate significant investments in the short term