Does Islamicity matter for the stability of Islamic banks in dual banking systems?
Investigating the relation between the institutional environment and bank stability has become the focus of recent empirical works. Since its emergence, the Islamic segment of dual banking systems has expanded faster than the conventional segment, albeit growth remains somehow impeded due to many fa...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Elsevier
2022-04-01
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| Series: | Heliyon |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2405844022005333 |
| _version_ | 1818140469302919168 |
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| author | Abderazak Bakhouche Teheni El Ghak Mohammad Alshiab |
| author_facet | Abderazak Bakhouche Teheni El Ghak Mohammad Alshiab |
| author_sort | Abderazak Bakhouche |
| collection | DOAJ |
| description | Investigating the relation between the institutional environment and bank stability has become the focus of recent empirical works. Since its emergence, the Islamic segment of dual banking systems has expanded faster than the conventional segment, albeit growth remains somehow impeded due to many factors. In most countries, the business environment is centred on the principle of ''maximisation of owners' wealth'', which may have stripped Islamic banks of their intermediary function to pursue activities in greater congruence with the alfalah-Maqasid Sharia approach framework. This study examines whether Islamic banks are more stable in countries where the environment is overwhelmed by Islamicity than in countries with less Islamicity. A sample of Islamic and conventional banks from 14 Muslim majority countries is employed for the 2016–19 period. The results suggest that Islamicity has a neutral effect on bank stability and that Islamic banks do not find higher Islamicity of the environment a supporting factor for their resilience. Our findings reject the 'Islamicity-stability'' hypothesis for Islamic banks, suggesting that the Islamicity of the environment is irrelevant in dual banking systems. From a different angle, Islamic banks may seem to be a ''disguised'' version of conventional banks. |
| first_indexed | 2024-12-11T10:44:29Z |
| format | Article |
| id | doaj.art-0f8d53ba89794c2987e82fc2650c83d8 |
| institution | Directory Open Access Journal |
| issn | 2405-8440 |
| language | English |
| last_indexed | 2024-12-11T10:44:29Z |
| publishDate | 2022-04-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Heliyon |
| spelling | doaj.art-0f8d53ba89794c2987e82fc2650c83d82022-12-22T01:10:30ZengElsevierHeliyon2405-84402022-04-0184e09245Does Islamicity matter for the stability of Islamic banks in dual banking systems?Abderazak Bakhouche0Teheni El Ghak1Mohammad Alshiab2Business Department, Higher College of Technology, P.O. Box-15825, Dubai campus, United Arab Emirates; Corresponding author.LIEI, Faculty of Economic Sciences and Management of Tunis, University Tunis El Manar, Tunis, Post Box 248 - 2092, Tunis El Manar II, TunisiaBusiness Department, Higher College of Technology, P.O. Box-25035, Abu Dhabi campus, United Arab EmiratesInvestigating the relation between the institutional environment and bank stability has become the focus of recent empirical works. Since its emergence, the Islamic segment of dual banking systems has expanded faster than the conventional segment, albeit growth remains somehow impeded due to many factors. In most countries, the business environment is centred on the principle of ''maximisation of owners' wealth'', which may have stripped Islamic banks of their intermediary function to pursue activities in greater congruence with the alfalah-Maqasid Sharia approach framework. This study examines whether Islamic banks are more stable in countries where the environment is overwhelmed by Islamicity than in countries with less Islamicity. A sample of Islamic and conventional banks from 14 Muslim majority countries is employed for the 2016–19 period. The results suggest that Islamicity has a neutral effect on bank stability and that Islamic banks do not find higher Islamicity of the environment a supporting factor for their resilience. Our findings reject the 'Islamicity-stability'' hypothesis for Islamic banks, suggesting that the Islamicity of the environment is irrelevant in dual banking systems. From a different angle, Islamic banks may seem to be a ''disguised'' version of conventional banks.http://www.sciencedirect.com/science/article/pii/S2405844022005333Islamic banksStabilityZ-scoreIslamicity index |
| spellingShingle | Abderazak Bakhouche Teheni El Ghak Mohammad Alshiab Does Islamicity matter for the stability of Islamic banks in dual banking systems? Heliyon Islamic banks Stability Z-score Islamicity index |
| title | Does Islamicity matter for the stability of Islamic banks in dual banking systems? |
| title_full | Does Islamicity matter for the stability of Islamic banks in dual banking systems? |
| title_fullStr | Does Islamicity matter for the stability of Islamic banks in dual banking systems? |
| title_full_unstemmed | Does Islamicity matter for the stability of Islamic banks in dual banking systems? |
| title_short | Does Islamicity matter for the stability of Islamic banks in dual banking systems? |
| title_sort | does islamicity matter for the stability of islamic banks in dual banking systems |
| topic | Islamic banks Stability Z-score Islamicity index |
| url | http://www.sciencedirect.com/science/article/pii/S2405844022005333 |
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