Junaina Muhammad - Academia.edu (original) (raw)

Papers by Junaina Muhammad

Using a sample of listed non-financial Philippine firms over the period 2004-2014, this study emp... more Using a sample of listed non-financial Philippine firms over the period 2004-2014, this study empirically examines the effects of macroeconomic and firm-specific uncertainty on firm leverage. We employ a dynamic panel data method, namely the robust two-step system GMM estimator on both the book and market leverage ratios. We further analyze the effects of macroeconomic and firm-specific uncertainty on firm debt maturity. The results provide strong evidence of the negative effects of macroeconomic and firm-specific uncertainty on firm leverage. The results also indicate that while short-term debt is adversely affected by both firm-specific and macroeconomic uncertainty, long-term debt is only affected by macroeconomic uncertainty. This implies that although the Philippine firms take into account both firm-specific and macroeconomic uncertainty in their financing decisions in the short-run, they are only concerned about the adverse effects of macroeconomic uncertainty in the long-run.

Buying and selling occurs when a seller provides an item to a buyer at a price agreed by both par... more Buying and selling occurs when a seller provides an item to a buyer at a price agreed by both parties. On the other hand, riba (usury or interest) is when someone gives a certain capital to another person with a condition that it is to be returned with a certain gain. Interest (usury), considered a taboo in Islam, has been one of the major causes of the financial crises in the West with the recent ones being the American subprime crisis and European sovereign debt crisis. What used to be the superpowers of modern finance have turned into indigent states. This paper compares both conventional and Islamic finance and looks at how Islamic finance can avoid the same mistakes from happening again. Islamic finance combines the divine and the secular with emphasis on spiritual values and social justice. In contrast to the western's 'Maximizing shareholders' worth' concept in finance, Islam states that profits in business must be accompanied with responsibility. It puts emphasis on profit sharing in lending funds. If one is not taking any business risks, he/she has no right to its profits. In a conventional banking system, due to the interest being charged, resources cannot be fully utilized as the funds available are discounted by interest fee. As such, usury is just not acceptable in Islam and would be destructive in any economic system.

This study examined the effect of CEO duality, board composition and board size on organizational... more This study examined the effect of CEO duality, board composition and board size on organizational performance of Bourse Malaysia or Kuala Lumpur Stock Exchange (KLSE) listed companies. For comparison purpose, this study examined these variables for main board companies as the proxy of large size companies, second board as the proxy for small size companies, and the whole market as proxy for developing country. This study employed 196 companies selected from the main board (96) and the second board (100) of KLSE and applied a simple regression analysis to describe the data of this study and MANOVA analysis model to test the effect of CEO duality, board composition and board size on organizational performance. We run these tests separately for main board, second board companies and the total market. The results indicated that the effects of multiple relationships between CEO duality and the three organizational performance variables (ROA, ROE, PER) before and after controlling by the age and industry are not significant for all three groups of board samples. While, the composition of outside directors was significant affects the firm performance for main board and combine board, but it is not significant for second board. Finally, board size is associated with higher firm performance. This evidence occurs only for main board. In general, the control variables, age and industry, do not affect significantly the relationships between CEO duality, board composition, and board size and organizational performance.

Jurnal pengurusan, 2019

Firms often face uncertainties which may affect corporate financing decisions. As uncertainty has... more Firms often face uncertainties which may affect corporate financing decisions. As uncertainty has potential adverse and destabilizing effects on firms, this study is carried out to examine the influence of firm-specific and macroeconomic uncertainty on firm leverage, short-term and long-term debt. Based on a panel of Philippine listed firms from 2004-2014, we adopt a dynamic panel data estimation technique, namely the Generalized Method of Moments to conduct our analyses. The results provide strong evidence of the adverse influence of firm-specific and macroeconomic uncertainty on leverage. Furthermore, the results indicate that while short-term debt is adversely impacted by firm-specific and macroeconomic uncertainty, long-term debt is merely influenced by macroeconomic uncertainty. This implies that although Philippine firms consider firm-specific and macroeconomic uncertainty in their short-run financing decisions, they are primarily concerned about macroeconomic uncertainty in the long-run. This paper addresses the paucity of research that has been conducted in this area, particularly in the context of developing countries. The findings provide important insights into the way firms derive their short-and long-run corporate financing decisions when encountering uncertainties. The insights can guide policymakers to formulate suitable policies to ensure stability in the business and macroeconomic environment.

The objective of the paper is to ascertain the influence of shares derivatives trading on the Mal... more The objective of the paper is to ascertain the influence of shares derivatives trading on the Malaysian stock market. Johansen-Juselius' co-integration test reveals signs of increasing integration between these cash and futures markets over time. The Granger causality test indicates that the stock index futures Granger causes the cash index with no feedback in the reverse direction during periods of financial crisis and recovery. Significantly observable during the period was high participation of foreign investors in the futures market. The increase in the number of foreign investors in the futures market dramatically increases the herding activities in futures market trading. The findings suggest that the transmission of information from the futures market to the cash market could, to a certain extent, during a period of "bad economy", be due to herding by foreign investors.

American Journal of Economics, 2013

Credit risk is one of the most important kinds of risk in banking sector. The relationship betwee... more Credit risk is one of the most important kinds of risk in banking sector. The relationship between business cycle and banks' loan losses was one of the hot debates in recent economic literature especially with respect to financial stability analysis. The quality of loans can be one of the factors that limit the banks' loan supply and affect on investment spending. Although banks have a significant role in transmission of monetary policy; in the meantime their performance is strongly influenced by monetary and fiscal policies that are effective in recession and prosperity and thereby affect bank performance; in other words, macroeconomic variab les can effect in/directly on banks loans quality and their transitional role. Thus policy makers and bankers are always concerned with the financial stability and are always looking for tools to better manage banks' credit risk. One of the risk indicators that are used in literature of banks' credit risk is Non-Performing Loans (NPL). Hence the main objective of this study is to analyze relat ionship between banks loans quality and macroeconomic variab les by using a dynamic panel data model on Malaysian co mmercial banking system for the 1997-2012 periods. The results show that there is a strong evidence of cyclical sensitivity of loan quality in Malaysia's commercial banking system. Based on the results lending interest rate and FDI-net outflow (% GDP) are the most effective factors on NPL ratio with simu ltaneous positive effects and a reverse effect with one-year delay. It can be said that the impact of external shocks on the domestic banking system is more than internal shocks. The result of this study can be helpful to bank supervisory and economists to adjust banking system stability and economic policies.

Asian Journal of Finance and Accounting, Feb 22, 2016

This paper focuses mainly on the Shariah screening methodologies for Shariah-Compliant firms. Thi... more This paper focuses mainly on the Shariah screening methodologies for Shariah-Compliant firms. This paper compares the Shariah screening methodologies which are used in selected Asian countries and the United States, a 'powerhouse' nation. In order to include the analysis of the new benchmark introduced in Malaysia as part of this study, the timeline used in this paper is from November 2013 until November 2014. It can be found that there are similarities and differences between the various Shariah screening methodologies in all the 5 countries, in terms of feasibility, duration, economic viability and fund requirements. It also appears that the Shariah screening methodologies implied in the United States is far more stringent than those implied in the selected Asian countries. On the whole, the results point towards the possibility of generalising the implementation of strict and uniform Shariah screening methodologies within all the country-specific Shariah Indices amongst Muslim nations, globally.

Data in Brief, Feb 1, 2018

This data article provides macroeconomic data that can be used to generate macroeconomic volatili... more This data article provides macroeconomic data that can be used to generate macroeconomic volatility. The data cover a sample of seven selected countries in the Asia Pacific region for the period 2004-2014, including both developing and developed countries. This dataset was generated to enhance our understanding of the sources of macroeconomic volatility affecting the countries in this region. Although the Asia Pacific region continues to remain as the most dynamic part of the world's economy, it is not spared from various sources of macroeconomic volatility through the decades. The reported data cover 15 types of macroeconomic data series, representing three broad categories of indicators that can be used to proxy macroeconomic volatility. They are indicators that account for macroeconomic volatility (i.e. volatility as a macroeconomic outcome), domestic sources of macroeconomic volatility and external sources of macroeconomic volatility. In particular, the selected countries are Malaysia, Thailand, Indonesia and Philippines, which are regarded as developing countries, while Singapore, Japan and Australia are developed countries. Despite the differences in level of economic development, these countries were affected by similar sources of macroeconomic volatility such as the Asian Financial Crisis and the Global Financial Crisis. These countries were also affected by other similar external turbulence arising from factors such as the global economic slowdown, geopolitical risks in the Middle East Contents lists available at ScienceDirect

International Journal of Managerial Finance, Jun 4, 2018

Purpose: The purpose of this paper is to examine how corporate governance moderates the relations... more Purpose: The purpose of this paper is to examine how corporate governance moderates the relationship between macroeconomic uncertainty and corporate capital structure. Design/methodology/approach: This paper employs the two-step system generalized method of moments regression, considering a sample of 907 listed non-financial firms from seven Asia Pacific countries during the period 2004-2014. Findings: This study finds that macroeconomic uncertainty has a significant negative impact on the capital structure decisions of firms. The results also reveal that the overall effect of macroeconomic uncertainty on capital structure among firms with better governance quality is significantly negative. The evidence suggests that corporate governance acts as an effective mechanism to curb the usage of leverage during times of high volatility. Further analysis shows that board independence, the separation between the roles of CEO and chairman of the board and blockholders' ownership are effective governance mechanisms, whereas similar observations do not hold for board size and institutional ownership. Research limitations/implications: The findings of this study may be useful to policy makers to formulate appropriate policies to mitigate the adverse effects caused by macroeconomic uncertainty. This is important because macroeconomic uncertainty may have potential destabilizing effects on a country's or region's development by jeopardizing the firms' ability to formulate sound investment, production and financing decisions. Additionally, the results suggest that good governance quality can act as a check and balance to ensure that firms use less leverage when they are facing volatility in the macroeconomic environment. These findings could help to reinforce the importance of good governance among policy makers of a country as well as managers of firms. Originality/value: The authors make the first attempt to examine the moderating effect of corporate governance on the relationship between macroeconomic uncertainty and corporate capital structure.

Global Business Review, Mar 1, 2014

This article examines the cost, revenue and profit efficiency levels of 74 banks (47 conventional... more This article examines the cost, revenue and profit efficiency levels of 74 banks (47 conventional and 27 Islamic banks) in Gulf Cooperative Council (GCC) countries over the periods 2007 to 2011. The level of efficiencies was measured using Data Envelopment Analysis (DEA) method which applied the intermediation approach. We find that, revenue efficiency seems to play the main factor leading to the lower or higher profit efficiency levels. In essence, the higher revenue efficiency only affects a higher profit efficiency levels in Islamic banks. However, the profit efficiency on conventional banks will not be affect by the higher revenue efficiency levels since the result shows the level of profit efficiency is lower than cost efficiency due to the higher revenue efficiency. In addition, the result of this study also shows that they are statistically significant difference on cost, revenue and profit efficiency between Islamic and conventional banks in GCC countries. The findings of this study are expected to contribute significantly to the existing knowledge on the operating performance of the GCC Islamic and conventional banking sector, bank’s specific management, policy makers and may also facilitate directions for sustainable competitiveness of the GCC Islamic and conventional banking sector operations in the future.

This paper investigates the influence of export volatility on corporate financing decisions of a ... more This paper investigates the influence of export volatility on corporate financing decisions of a sample of nonfinancial firms listed on the Australian Securities Exchange over the period 2004-2014. The GARCH model is employed to model export volatility. Using a dynamic panel data method, namely the robust two-step system GMM estimation procedure, the results show that export volatility has a significant negative effect on the financing decisions of Australian firms. The results also reveal that while long-term debt is affected by export volatility, similar observation does not hold for short-term debt. This indicates that Australian firms are chiefly concerned about the adverse effect of export volatility in the long-run. The results also provide evidence of the importance of accounting for the effects of the Global Financial Crisis. Policy implications are derived from the findings.

The purpose of this study is to evaluate the degree of competition in the Malaysian dual banking ... more The purpose of this study is to evaluate the degree of competition in the Malaysian dual banking industry to address the question of whether Islamic banks are able to cope with competition from the well-established conventional banks. The Panzar-Rosse (PR) method has been used to measure the degree of competition in Islamic compared with conventional banking market over the period of 1997-2016. Present study uses static panel data estimation to estimate the developed models. Results from the H-statistics values using total income show that level of competition in the Islamic banking market is more intense than conventional banking market. Hence, providing evidence that Islamic banks are able to compete with conventional banks that have long history of establishment. The H-statistic values using total interest income also indicate the same result, hence supporting the robustness of these results. The findings also show the effectiveness of policy changes adopted by Bank Negara Malaysia in order to increase level of competition in both banking markets. Hence, knowledge on this issue is important to the policy makers for them to formulate new policy regarding banking competition.

Jurnal pengurusan, 2018

The banking industry in Malaysia has undergone a change in its market structure, especially in te... more The banking industry in Malaysia has undergone a change in its market structure, especially in terms of competition due to several factors such as the implementation of the merger program, restructuring of the Islamic banking operations, liberalization and technological advancement. Therefore, this study is conducted to measure the changes in the degree of competition in the Malaysian dual banking due to structural changes occurring in the industry. The Panzar-Rosse (PR) method has been used to measure the degree of competition in the Malaysian dual banking market for the period 1997-2016. Present study uses static panel data estimation to estimate the developed models. The value of H-statistics indicates that Islamic and conventional banks operate in monopolistic competition market structure. The findings show that structural changes have increased the level of competition in the Malaysian banking industry. The results of the study show that policy changes made by Bank Negara Malaysia have improved the level of competition in the Islamic and conventional banking markets. Knowledge of competitive issues is crucial so that policy makers may formulate new policies for the banking industry that suit the current market structure.

Research in Applied Economics, Nov 16, 2017

This paper examines the historical pattern of macroeconomic uncertainty of two developing countri... more This paper examines the historical pattern of macroeconomic uncertainty of two developing countries in the South East Asia, namely Malaysia and Indonesia. Comparisons of macroeconomic uncertainty are also made between both countries using a selected number of indicators for macroeconomic volatility. We find that while both countries were affected by similar external sources of macroeconomic uncertainty, these countries were also subject to domestic sources of macroeconomic uncertainty which were confined to the particular country. The analyses also reveal that Indonesia experienced more fluctuations compared to Malaysia when macroeconomic uncertainty is measured by volatility as a macroeconomic outcome and domestic sources of macroeconomic volatility. Contrarily, Malaysia displayed greater fluctuations than Indonesia when macroeconomic uncertainty is measured by external sources of macroeconomic volatility. Policy implications are drawn from the findings.

American Journal of Economics, 2013

Negative effects of 1997 financial crisis in Malaysia, such as other emerging countries, led to t... more Negative effects of 1997 financial crisis in Malaysia, such as other emerging countries, led to the development and restructuring of financial system in this country. Hence many big firms and corporations to provide their required funds shift towards newly established markets like stock and bond markets. Under these conditions, many banks maintained their profitability by attracting new customers especially Small and Mediu m size Entrepreneurs (SM Es) and increased their loans and credits to the household sector. No w a significant share of loans has been given to the household sector and SM Es and this feature caused the banking system to become more vulnerable against external and internal shock. So, increasing unemploy ment and reducing income for any reason will be a threat for banks by Default risk. Thus, anticipated effects of mac ro-economic shocks on banks' operation are more important to policy makers and bankers. Hence in th is study, a Structural Vector Autoregressive (SVAR) model is emp loyed to show how a macroeconomic shock effects on Non-Performing Loan changes (NLP) as a credit risk indictor in Malaysian co mmercial banking system for period of 1997-2012. The designed Model is called A B model that is limited based on IS-LM theory. According to results the demand and supply shock have negative and monetary shock has positive effects on NPL ratio. Mean while simu ltaneous effects of monetary and demand shocks are more than supply shocks effects but the supply shocks' impact is more persistent. Co mparison response of NPL ratio with capital ratio shows that the commercial banks against domestic shocks are safe and adequate capital to deal with the risks arising fro m internal shocks in the economy are considered. The results of this study can help policy makers to pursue suitable monetary policies and decrease banks failing in front of any macroeconomic shocks.

The quality of loans can be one of the factors that limit the banks' loan supply and affect on in... more The quality of loans can be one of the factors that limit the banks' loan supply and affect on investment spending. On the other hand according to the Basel committee regulations, banks can calculate their capital charge to cover their internal credit risk. Although banks have a significant role in transmission of monetary policy, in the meantime their performance is strongly influenced by monetary and fiscal policies. These policies are effective in recession and prosperity and thereby affect bank performance; in other words, macroeconomic variables can effect in/directly on banks loans quality and their transitional role. Thus policy makers and bankers are always looking for tools to better manage banks' credit risk. Hence the main objective of this study is to analyze relationship between Non-Performing Loans (NPL) and macroeconomic variables by using a dynamic panel data model in Malaysian commercial banking system for period 1997-2012. The results show that there is a strong evidence cyclical sensitivity of loan quality in Malaysia commercial banking system. Lending interest rate and foreign direct investment outflow are the most effective factors on NPL ratio with simultaneous positive effects and a reverse effect with one-year delay. It can be said that the impact of external shocks on the domestic banking system is more than internal shocks.

There is a worldwide trend to adopt the international financial reporting standards (IFRS) but Is... more There is a worldwide trend to adopt the international financial reporting standards (IFRS) but Islamic banking companies in Bangladesh are required to follow different rules and regulations. These banks should follow more regulatory formalities than the conventional ones. The Bangladesh Financial Reporting Standards (BFRS) adopted the International Financial Reporting Standards (IFRS) in 2000. Since then, the regulator in Bangladesh has initiated the Sharia governance framework from regulatory and non-regulatory aspects. This study considered the annual report of 8 Islamic banks in Bangladesh in 2015 and tried to identify the requirements in preparing the financial reports under Islamic Shariah and to show the compliance status of these banks. The average compliance rate with the requirements was found to be 88.11%. It is recommended that in complying the requirements of the financial reports, Bangladesh Bank may modify BRPD Circular No. 15/2009 that will be helpful for banks to pre...

Halal Industry in Malaysia has created employment opportunities especially among Small, medium-si... more Halal Industry in Malaysia has created employment opportunities especially among Small, medium-sized enterprises (SMEs). High demand for Halal products especially from Islamic countries has put Halal industry as one of the national agenda priorities. In the Eleventh Malaysia Plan (11MP), the halal industry had been given special emphasis by the Prime Minister to ensuring the halal industry is highly and persistently competitive. In Asia, Malaysia has been considered as a leader in the development of the Halal hub center. However, halal industry is not only about halal food production, but also it covers Islamic finance services which prohibit interest (riba), uncertainties (gharar) and gambling (maysir). Islamic financial planning is one of the important parts of Islamic finance because it plays a big role in providing Shariah compliant funds and investment opportunities especially for SMEs halal operators. The holistic approach to halal industry should also cover not only halal foo...

Capital Markets Review, 2019

Using a sample of listed non-financial Philippine firms over the period 2004-2014, this study emp... more Using a sample of listed non-financial Philippine firms over the period 2004-2014, this study empirically examines the effects of macroeconomic and firm-specific uncertainty on firm leverage. We employ a dynamic panel data method, namely the robust two-step system GMM estimator on both the book and market leverage ratios. We further analyze the effects of macroeconomic and firm-specific uncertainty on firm debt maturity. The results provide strong evidence of the negative effects of macroeconomic and firm-specific uncertainty on firm leverage. The results also indicate that while short-term debt is adversely affected by both firm-specific and macroeconomic uncertainty, long-term debt is only affected by macroeconomic uncertainty. This implies that although the Philippine firms take into account both firm-specific and macroeconomic uncertainty in their financing decisions in the short-run, they are only concerned about the adverse effects of macroeconomic uncertainty in the long-run.

Buying and selling occurs when a seller provides an item to a buyer at a price agreed by both par... more Buying and selling occurs when a seller provides an item to a buyer at a price agreed by both parties. On the other hand, riba (usury or interest) is when someone gives a certain capital to another person with a condition that it is to be returned with a certain gain. Interest (usury), considered a taboo in Islam, has been one of the major causes of the financial crises in the West with the recent ones being the American subprime crisis and European sovereign debt crisis. What used to be the superpowers of modern finance have turned into indigent states. This paper compares both conventional and Islamic finance and looks at how Islamic finance can avoid the same mistakes from happening again. Islamic finance combines the divine and the secular with emphasis on spiritual values and social justice. In contrast to the western's 'Maximizing shareholders' worth' concept in finance, Islam states that profits in business must be accompanied with responsibility. It puts emphasis on profit sharing in lending funds. If one is not taking any business risks, he/she has no right to its profits. In a conventional banking system, due to the interest being charged, resources cannot be fully utilized as the funds available are discounted by interest fee. As such, usury is just not acceptable in Islam and would be destructive in any economic system.

This study examined the effect of CEO duality, board composition and board size on organizational... more This study examined the effect of CEO duality, board composition and board size on organizational performance of Bourse Malaysia or Kuala Lumpur Stock Exchange (KLSE) listed companies. For comparison purpose, this study examined these variables for main board companies as the proxy of large size companies, second board as the proxy for small size companies, and the whole market as proxy for developing country. This study employed 196 companies selected from the main board (96) and the second board (100) of KLSE and applied a simple regression analysis to describe the data of this study and MANOVA analysis model to test the effect of CEO duality, board composition and board size on organizational performance. We run these tests separately for main board, second board companies and the total market. The results indicated that the effects of multiple relationships between CEO duality and the three organizational performance variables (ROA, ROE, PER) before and after controlling by the age and industry are not significant for all three groups of board samples. While, the composition of outside directors was significant affects the firm performance for main board and combine board, but it is not significant for second board. Finally, board size is associated with higher firm performance. This evidence occurs only for main board. In general, the control variables, age and industry, do not affect significantly the relationships between CEO duality, board composition, and board size and organizational performance.

Jurnal pengurusan, 2019

Firms often face uncertainties which may affect corporate financing decisions. As uncertainty has... more Firms often face uncertainties which may affect corporate financing decisions. As uncertainty has potential adverse and destabilizing effects on firms, this study is carried out to examine the influence of firm-specific and macroeconomic uncertainty on firm leverage, short-term and long-term debt. Based on a panel of Philippine listed firms from 2004-2014, we adopt a dynamic panel data estimation technique, namely the Generalized Method of Moments to conduct our analyses. The results provide strong evidence of the adverse influence of firm-specific and macroeconomic uncertainty on leverage. Furthermore, the results indicate that while short-term debt is adversely impacted by firm-specific and macroeconomic uncertainty, long-term debt is merely influenced by macroeconomic uncertainty. This implies that although Philippine firms consider firm-specific and macroeconomic uncertainty in their short-run financing decisions, they are primarily concerned about macroeconomic uncertainty in the long-run. This paper addresses the paucity of research that has been conducted in this area, particularly in the context of developing countries. The findings provide important insights into the way firms derive their short-and long-run corporate financing decisions when encountering uncertainties. The insights can guide policymakers to formulate suitable policies to ensure stability in the business and macroeconomic environment.

The objective of the paper is to ascertain the influence of shares derivatives trading on the Mal... more The objective of the paper is to ascertain the influence of shares derivatives trading on the Malaysian stock market. Johansen-Juselius' co-integration test reveals signs of increasing integration between these cash and futures markets over time. The Granger causality test indicates that the stock index futures Granger causes the cash index with no feedback in the reverse direction during periods of financial crisis and recovery. Significantly observable during the period was high participation of foreign investors in the futures market. The increase in the number of foreign investors in the futures market dramatically increases the herding activities in futures market trading. The findings suggest that the transmission of information from the futures market to the cash market could, to a certain extent, during a period of "bad economy", be due to herding by foreign investors.

American Journal of Economics, 2013

Credit risk is one of the most important kinds of risk in banking sector. The relationship betwee... more Credit risk is one of the most important kinds of risk in banking sector. The relationship between business cycle and banks' loan losses was one of the hot debates in recent economic literature especially with respect to financial stability analysis. The quality of loans can be one of the factors that limit the banks' loan supply and affect on investment spending. Although banks have a significant role in transmission of monetary policy; in the meantime their performance is strongly influenced by monetary and fiscal policies that are effective in recession and prosperity and thereby affect bank performance; in other words, macroeconomic variab les can effect in/directly on banks loans quality and their transitional role. Thus policy makers and bankers are always concerned with the financial stability and are always looking for tools to better manage banks' credit risk. One of the risk indicators that are used in literature of banks' credit risk is Non-Performing Loans (NPL). Hence the main objective of this study is to analyze relat ionship between banks loans quality and macroeconomic variab les by using a dynamic panel data model on Malaysian co mmercial banking system for the 1997-2012 periods. The results show that there is a strong evidence of cyclical sensitivity of loan quality in Malaysia's commercial banking system. Based on the results lending interest rate and FDI-net outflow (% GDP) are the most effective factors on NPL ratio with simu ltaneous positive effects and a reverse effect with one-year delay. It can be said that the impact of external shocks on the domestic banking system is more than internal shocks. The result of this study can be helpful to bank supervisory and economists to adjust banking system stability and economic policies.

Asian Journal of Finance and Accounting, Feb 22, 2016

This paper focuses mainly on the Shariah screening methodologies for Shariah-Compliant firms. Thi... more This paper focuses mainly on the Shariah screening methodologies for Shariah-Compliant firms. This paper compares the Shariah screening methodologies which are used in selected Asian countries and the United States, a 'powerhouse' nation. In order to include the analysis of the new benchmark introduced in Malaysia as part of this study, the timeline used in this paper is from November 2013 until November 2014. It can be found that there are similarities and differences between the various Shariah screening methodologies in all the 5 countries, in terms of feasibility, duration, economic viability and fund requirements. It also appears that the Shariah screening methodologies implied in the United States is far more stringent than those implied in the selected Asian countries. On the whole, the results point towards the possibility of generalising the implementation of strict and uniform Shariah screening methodologies within all the country-specific Shariah Indices amongst Muslim nations, globally.

Data in Brief, Feb 1, 2018

This data article provides macroeconomic data that can be used to generate macroeconomic volatili... more This data article provides macroeconomic data that can be used to generate macroeconomic volatility. The data cover a sample of seven selected countries in the Asia Pacific region for the period 2004-2014, including both developing and developed countries. This dataset was generated to enhance our understanding of the sources of macroeconomic volatility affecting the countries in this region. Although the Asia Pacific region continues to remain as the most dynamic part of the world's economy, it is not spared from various sources of macroeconomic volatility through the decades. The reported data cover 15 types of macroeconomic data series, representing three broad categories of indicators that can be used to proxy macroeconomic volatility. They are indicators that account for macroeconomic volatility (i.e. volatility as a macroeconomic outcome), domestic sources of macroeconomic volatility and external sources of macroeconomic volatility. In particular, the selected countries are Malaysia, Thailand, Indonesia and Philippines, which are regarded as developing countries, while Singapore, Japan and Australia are developed countries. Despite the differences in level of economic development, these countries were affected by similar sources of macroeconomic volatility such as the Asian Financial Crisis and the Global Financial Crisis. These countries were also affected by other similar external turbulence arising from factors such as the global economic slowdown, geopolitical risks in the Middle East Contents lists available at ScienceDirect

International Journal of Managerial Finance, Jun 4, 2018

Purpose: The purpose of this paper is to examine how corporate governance moderates the relations... more Purpose: The purpose of this paper is to examine how corporate governance moderates the relationship between macroeconomic uncertainty and corporate capital structure. Design/methodology/approach: This paper employs the two-step system generalized method of moments regression, considering a sample of 907 listed non-financial firms from seven Asia Pacific countries during the period 2004-2014. Findings: This study finds that macroeconomic uncertainty has a significant negative impact on the capital structure decisions of firms. The results also reveal that the overall effect of macroeconomic uncertainty on capital structure among firms with better governance quality is significantly negative. The evidence suggests that corporate governance acts as an effective mechanism to curb the usage of leverage during times of high volatility. Further analysis shows that board independence, the separation between the roles of CEO and chairman of the board and blockholders' ownership are effective governance mechanisms, whereas similar observations do not hold for board size and institutional ownership. Research limitations/implications: The findings of this study may be useful to policy makers to formulate appropriate policies to mitigate the adverse effects caused by macroeconomic uncertainty. This is important because macroeconomic uncertainty may have potential destabilizing effects on a country's or region's development by jeopardizing the firms' ability to formulate sound investment, production and financing decisions. Additionally, the results suggest that good governance quality can act as a check and balance to ensure that firms use less leverage when they are facing volatility in the macroeconomic environment. These findings could help to reinforce the importance of good governance among policy makers of a country as well as managers of firms. Originality/value: The authors make the first attempt to examine the moderating effect of corporate governance on the relationship between macroeconomic uncertainty and corporate capital structure.

Global Business Review, Mar 1, 2014

This article examines the cost, revenue and profit efficiency levels of 74 banks (47 conventional... more This article examines the cost, revenue and profit efficiency levels of 74 banks (47 conventional and 27 Islamic banks) in Gulf Cooperative Council (GCC) countries over the periods 2007 to 2011. The level of efficiencies was measured using Data Envelopment Analysis (DEA) method which applied the intermediation approach. We find that, revenue efficiency seems to play the main factor leading to the lower or higher profit efficiency levels. In essence, the higher revenue efficiency only affects a higher profit efficiency levels in Islamic banks. However, the profit efficiency on conventional banks will not be affect by the higher revenue efficiency levels since the result shows the level of profit efficiency is lower than cost efficiency due to the higher revenue efficiency. In addition, the result of this study also shows that they are statistically significant difference on cost, revenue and profit efficiency between Islamic and conventional banks in GCC countries. The findings of this study are expected to contribute significantly to the existing knowledge on the operating performance of the GCC Islamic and conventional banking sector, bank’s specific management, policy makers and may also facilitate directions for sustainable competitiveness of the GCC Islamic and conventional banking sector operations in the future.

This paper investigates the influence of export volatility on corporate financing decisions of a ... more This paper investigates the influence of export volatility on corporate financing decisions of a sample of nonfinancial firms listed on the Australian Securities Exchange over the period 2004-2014. The GARCH model is employed to model export volatility. Using a dynamic panel data method, namely the robust two-step system GMM estimation procedure, the results show that export volatility has a significant negative effect on the financing decisions of Australian firms. The results also reveal that while long-term debt is affected by export volatility, similar observation does not hold for short-term debt. This indicates that Australian firms are chiefly concerned about the adverse effect of export volatility in the long-run. The results also provide evidence of the importance of accounting for the effects of the Global Financial Crisis. Policy implications are derived from the findings.

The purpose of this study is to evaluate the degree of competition in the Malaysian dual banking ... more The purpose of this study is to evaluate the degree of competition in the Malaysian dual banking industry to address the question of whether Islamic banks are able to cope with competition from the well-established conventional banks. The Panzar-Rosse (PR) method has been used to measure the degree of competition in Islamic compared with conventional banking market over the period of 1997-2016. Present study uses static panel data estimation to estimate the developed models. Results from the H-statistics values using total income show that level of competition in the Islamic banking market is more intense than conventional banking market. Hence, providing evidence that Islamic banks are able to compete with conventional banks that have long history of establishment. The H-statistic values using total interest income also indicate the same result, hence supporting the robustness of these results. The findings also show the effectiveness of policy changes adopted by Bank Negara Malaysia in order to increase level of competition in both banking markets. Hence, knowledge on this issue is important to the policy makers for them to formulate new policy regarding banking competition.

Jurnal pengurusan, 2018

The banking industry in Malaysia has undergone a change in its market structure, especially in te... more The banking industry in Malaysia has undergone a change in its market structure, especially in terms of competition due to several factors such as the implementation of the merger program, restructuring of the Islamic banking operations, liberalization and technological advancement. Therefore, this study is conducted to measure the changes in the degree of competition in the Malaysian dual banking due to structural changes occurring in the industry. The Panzar-Rosse (PR) method has been used to measure the degree of competition in the Malaysian dual banking market for the period 1997-2016. Present study uses static panel data estimation to estimate the developed models. The value of H-statistics indicates that Islamic and conventional banks operate in monopolistic competition market structure. The findings show that structural changes have increased the level of competition in the Malaysian banking industry. The results of the study show that policy changes made by Bank Negara Malaysia have improved the level of competition in the Islamic and conventional banking markets. Knowledge of competitive issues is crucial so that policy makers may formulate new policies for the banking industry that suit the current market structure.

Research in Applied Economics, Nov 16, 2017

This paper examines the historical pattern of macroeconomic uncertainty of two developing countri... more This paper examines the historical pattern of macroeconomic uncertainty of two developing countries in the South East Asia, namely Malaysia and Indonesia. Comparisons of macroeconomic uncertainty are also made between both countries using a selected number of indicators for macroeconomic volatility. We find that while both countries were affected by similar external sources of macroeconomic uncertainty, these countries were also subject to domestic sources of macroeconomic uncertainty which were confined to the particular country. The analyses also reveal that Indonesia experienced more fluctuations compared to Malaysia when macroeconomic uncertainty is measured by volatility as a macroeconomic outcome and domestic sources of macroeconomic volatility. Contrarily, Malaysia displayed greater fluctuations than Indonesia when macroeconomic uncertainty is measured by external sources of macroeconomic volatility. Policy implications are drawn from the findings.

American Journal of Economics, 2013

Negative effects of 1997 financial crisis in Malaysia, such as other emerging countries, led to t... more Negative effects of 1997 financial crisis in Malaysia, such as other emerging countries, led to the development and restructuring of financial system in this country. Hence many big firms and corporations to provide their required funds shift towards newly established markets like stock and bond markets. Under these conditions, many banks maintained their profitability by attracting new customers especially Small and Mediu m size Entrepreneurs (SM Es) and increased their loans and credits to the household sector. No w a significant share of loans has been given to the household sector and SM Es and this feature caused the banking system to become more vulnerable against external and internal shock. So, increasing unemploy ment and reducing income for any reason will be a threat for banks by Default risk. Thus, anticipated effects of mac ro-economic shocks on banks' operation are more important to policy makers and bankers. Hence in th is study, a Structural Vector Autoregressive (SVAR) model is emp loyed to show how a macroeconomic shock effects on Non-Performing Loan changes (NLP) as a credit risk indictor in Malaysian co mmercial banking system for period of 1997-2012. The designed Model is called A B model that is limited based on IS-LM theory. According to results the demand and supply shock have negative and monetary shock has positive effects on NPL ratio. Mean while simu ltaneous effects of monetary and demand shocks are more than supply shocks effects but the supply shocks' impact is more persistent. Co mparison response of NPL ratio with capital ratio shows that the commercial banks against domestic shocks are safe and adequate capital to deal with the risks arising fro m internal shocks in the economy are considered. The results of this study can help policy makers to pursue suitable monetary policies and decrease banks failing in front of any macroeconomic shocks.

The quality of loans can be one of the factors that limit the banks' loan supply and affect on in... more The quality of loans can be one of the factors that limit the banks' loan supply and affect on investment spending. On the other hand according to the Basel committee regulations, banks can calculate their capital charge to cover their internal credit risk. Although banks have a significant role in transmission of monetary policy, in the meantime their performance is strongly influenced by monetary and fiscal policies. These policies are effective in recession and prosperity and thereby affect bank performance; in other words, macroeconomic variables can effect in/directly on banks loans quality and their transitional role. Thus policy makers and bankers are always looking for tools to better manage banks' credit risk. Hence the main objective of this study is to analyze relationship between Non-Performing Loans (NPL) and macroeconomic variables by using a dynamic panel data model in Malaysian commercial banking system for period 1997-2012. The results show that there is a strong evidence cyclical sensitivity of loan quality in Malaysia commercial banking system. Lending interest rate and foreign direct investment outflow are the most effective factors on NPL ratio with simultaneous positive effects and a reverse effect with one-year delay. It can be said that the impact of external shocks on the domestic banking system is more than internal shocks.

There is a worldwide trend to adopt the international financial reporting standards (IFRS) but Is... more There is a worldwide trend to adopt the international financial reporting standards (IFRS) but Islamic banking companies in Bangladesh are required to follow different rules and regulations. These banks should follow more regulatory formalities than the conventional ones. The Bangladesh Financial Reporting Standards (BFRS) adopted the International Financial Reporting Standards (IFRS) in 2000. Since then, the regulator in Bangladesh has initiated the Sharia governance framework from regulatory and non-regulatory aspects. This study considered the annual report of 8 Islamic banks in Bangladesh in 2015 and tried to identify the requirements in preparing the financial reports under Islamic Shariah and to show the compliance status of these banks. The average compliance rate with the requirements was found to be 88.11%. It is recommended that in complying the requirements of the financial reports, Bangladesh Bank may modify BRPD Circular No. 15/2009 that will be helpful for banks to pre...

Halal Industry in Malaysia has created employment opportunities especially among Small, medium-si... more Halal Industry in Malaysia has created employment opportunities especially among Small, medium-sized enterprises (SMEs). High demand for Halal products especially from Islamic countries has put Halal industry as one of the national agenda priorities. In the Eleventh Malaysia Plan (11MP), the halal industry had been given special emphasis by the Prime Minister to ensuring the halal industry is highly and persistently competitive. In Asia, Malaysia has been considered as a leader in the development of the Halal hub center. However, halal industry is not only about halal food production, but also it covers Islamic finance services which prohibit interest (riba), uncertainties (gharar) and gambling (maysir). Islamic financial planning is one of the important parts of Islamic finance because it plays a big role in providing Shariah compliant funds and investment opportunities especially for SMEs halal operators. The holistic approach to halal industry should also cover not only halal foo...

Capital Markets Review, 2019