Journal of Islamic Monetary Economics and Finance
Focus and Scope : Islamic economics, monetary, and finance (more) e-ISSN :2460-6146 p-ISSN : 2460-6618 Journal of Islamic Monetary Economics and Finance (JIMF) is an international peer-reviewed journal published quarterly by Bank Indonesia Institute, Bank Indonesia (Central Bank of Indonesia). JIMF publishes important research contributions to a wide range of Islamic economics, monetary, and finance including work along empirical, methodological and theoritical lines. The topics covers but not limited to the followings: microeconomics; finance; financial markets; macroeconomics; economic growth and development; international trade; monetary policy; money demand and money supply behaviour. The primary criterion for publication in JIMF is the significance of the contribution an article makes to the literature in Islamic economics, monetary and finance i.e., the significance of the contribution and on the rigor of analysis and presentation of the paper. The acceptance decision is made based upon an independent review process that provides critically constructive and prompt evaluations of submitted manuscripts.
Journal of Islamic Monetary Economics and Finance is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
SUSTAINABILITY-BASED ISLAMIC CORPORATE GOVERNANCE AND ISLAMIC BANKS’ MULTI-PERFORMANCE: EVIDENCE FROM INDONESIA
This study develops a Sustainability-based Islamic Corporate Governance (SICG) index that integrates the roles of the Shariah board, regular board, and sustainable board and examines how it impacts multi-dimensional performance of Islamic banks. It employs a sample of 15 Islamic commercial banks in Indonesia from 2010 to 2023. The findings reveal that governance elements have a positive impact on particularly financial performance, while its influence on social performance is limited. For environmental and sustainability performance, a positive impact is primarily observed in the roles of the regular and sustainable boards. Further analysis through the Paris Agreement interaction confirms that most of these findings are consistent and support the role of SICG in enhancing various performances of Islamic banks. These results highlight the need for Islamic banks in Indonesia to transition toward SICG and suggest that policymakers facilitate this transformation by developing relevant regulations and guidelines to align governance structures with broader sustainability objectives. ACKNOWLEDGMENT The paper is supported by sponsorship from the Indonesia Endowment Fund for Education (LPDP), whose sponsorship has played a crucial role in facilitating the research process. The authors deeply appreciate this support and are grateful for the opportunities it has provided. The authors also gratefully acknowledge the valuable comments provided by the journal's editors and reviewers.
Islamic corporate governance, Sharia governance, ESG performance, Islamic bank, Sustainability.
Copyright (c) 2025 Journal of Islamic Monetary Economics and Finance http://creativecommons.org/licenses/by-nc/4.0
ESG COMMITMENT AND BANK'S DEFAULT RISK IN EMERGING AND DEVELOPING COUNTRIES: DOES ISLAMIC BANK MATTER?
This paper examines the impact of ESG commitment on banks’ default risk in emerging and developing countries. Using a panel dataset comprising 157 banks from 28 countries over the period 2016-2022 and the Two-Step Generalized Method of Moments (2-Step GMM), it reveals that banks’ ESG commitment reduces banks’ probability of default (PD). Islamic banks also matter for ESG commitments, where Islamic banks have a higher probability of default than conventional banks while committing to the governance pillar. The findings of the study imply that financial authorities and banking institutions in emerging and developing countries need to spur banks’ ESG commitment. However, it must be carefully implemented in Islamic banks, considering that it likely increases Islamic banks' PD. The study contributes to the empirical research concerning the nexus between ESG commitment and banks' default by extending the measurement of the probability of default and delving deep into investigating its relation to Islamic banks.
ESG commitment, Probability of default (PD), Emerging and developing countries, Islamic banks.
DOES DIGITAL FINANCIAL INCLUSION IMPACT ESG PERFORMANCE IN ISLAMIC AND CONVENTIONAL FINANCIAL INSTITUTIONS? A GLOBAL EVIDENCE
This study investigates the impact of digital financial inclusion on corporate ESG performance using a global sample of 660 conventional and Islamic institutions from 2010 to 2022. The study reveals that digital financial inclusion can significantly promote corporate ESG performance. What sets this study apart is its use of the novel methodology of fixed effects model and Methods of Moments Quantile Regression (MMQR) to empirically identify how digital financial inclusion affects corporate ESG performance from lower to higher quantiles (0.1 to 0.9). Further, the analysis using 1st and 2nd SLS shows that digital financial inclusion has a more pronounced impact on Islamic banks' ESG scores, mainly when involved in the high implementation of digitalization. These significant results are assured by legitimacy and stakeholder theories. ESG factors have been significantly affected by adopting modern digital applications and platforms in regulated industries of Islamic institutions. Sub-Sample analysis of financial institutions and heterogeneity analysis of more and less board independence and board size significantly impact implementing digital financial inclusion and ESG performance, instilling the need to mitigate banks' risks by disclosing non-financial information and resolving agency conflicts among stakeholders aimed at investing in sustainable green projects. Finally, our results remain robust after addressing endogeneity issues and conducting robustness checks, offering new insights into the evolving digital financial inclusion and ESG performance.
Digital financial inclusion, ESG disclosure, Agency and signaling theory, Islamic and financial institutions.
RISK-ADJUSTED RETURNS AND SPILLOVER DYNAMICS AMONG EMERGING DIGITAL CURRENCIES
This study investigates the interconnected dynamics among diverse digital currencies, specifically focusing on risk-adjusted returns, tail risks, dynamic spillovers, and portfolio implications. Unlike prior research, which typically examines individual digital currency classes separately or in limited combinations, our study integrates six distinct classes of digital currencies, namely Islamic gold-backed cryptocurrencies, green cryptocurrencies, gold-backed stablecoins, non-fungible tokens (NFTs), decentralized finance (DeFi) assets, and conventional cryptocurrencies, enabling direct comparisons of risk-return dynamics and systemic interdependencies. Using Value at Risk (VaR), Conditional Value at Risk (CVaR), quantile-based Vector Autoregression (Quantile VAR), and network connectedness analysis, we provide nuanced insights into the behavior of these assets across various market conditions (bullish, bearish, and normal states). Our results demonstrate that conventional cryptocurrencies and DeFi assets consistently deliver positive risk-adjusted returns, whereas Islamic gold-backed cryptocurrencies exhibit notably higher downside risks and negative performance. Spillover analysis reveals pronounced connectedness, particularly in extreme market states, with conventional cryptocurrencies identified as primary transmitters of market shocks and gold-backed stablecoins and Islamic gold-backed cryptocurrencies as recipients. Our findings underscore significant diversification opportunities offered by pairs of assets exhibiting low connectedness, especially in normal market conditions. Furthermore, portfolio optimization analysis highlights the superior hedging effectiveness and lower hedging costs associated with gold-backed stablecoins and conventional cryptocurrency pairs. This comprehensive investigation delivers critical implications for investors, suggesting informed strategies for asset allocation and risk management. Policymakers can also utilize our insights to design adaptive regulatory frameworks that address systemic risks arising from digital currency markets. ACKNOWLEDGMENT Gazi Salah Uddin gratefully acknowledges the Faculty of Economics and Business, Universitas Indonesia, for the academic appointment as Adjunct and Visiting Professor, and expresses sincere appreciation for the institutional support and research facilities extended during his residency, which significantly contributed to the completion of this work.
Digital currency, Tail risks, Dynamic spillovers, Quantile VAR, Portfolio management, Islamic cryptocurrency, Green cryptocurrency.
Islamic Finance; Cryptocurrency; Digital currency; Spillover
Finance and Banking; Financial Econometrics
A LITERATURE REVIEW OF UPDATED ISLAMIC CORPORATE GOVERNANCE ELEMENTS: IMPLICATIONS FOR INDONESIA
This study identifies elements of Islamic Corporate Governance (ICG) that contribute to the performance of shariah-compliant firms. A systematic literature review is carried out on 173 relevant articles from the Scopus database, spanning from 2004 to 2024. It identifies five key elements of ICG: (1) Shariah board governance, (2) management and board governance, (3) audit and risk governance, (4) sustainable governance, and (5) Muslim management and board governance. These key elements encompass various sub-elements that have diverse impacts on firm performance across financial, social, and environmental dimensions. The findings offer specific implications for Indonesia, emphasizing the integration of sustainability practices into corporate governance mechanisms and considering distinct approaches to ICG mechanisms for dual-sector performance between Islamic Financial Institutions (IFIs) and non-IFIs. ACKNOWLEDGEMENT The paper is supported by sponsorship from the Indonesia Endowment Fund for Education (LPDP), whose sponsorship has played a crucial role in facilitating the research process. The authors deeply appreciate this support and are grateful for the opportunities it has provided. The authors also gratefully acknowledge the valuable comments provided by the journal's editors and reviewers.
Islamic corporate governance, Shariah governance, Firm performance, Literature review.
Copyright (c) 2025 Journal of Islamic Monetary Economics and Finance
SHARIA SUPERVISORY BOARD, BOARD ATTRIBUTES AND REAL EARNINGS MANAGEMENT IN ISLAMIC BANKS
This study examines how the Sharia Supervisory Board (SSB) moderates the effects of Board of Directors (BOD) characteristics on real earnings management (REM) of Islamic banks. Using unbalanced data encompassing 45 Islamic banks across 15 countries from 2012 to 2023, it documents a negatively significant influence of board size, independence, and expertise on REM. The influence of board's diligence, however, is absent. The study further notes that the SSB index moderates the effect of BOD attributes on REM in Islamic banks. The findings hold important implications for policymakers and regulators in shaping regulations on SSB and BOD oversight functions to curb REM practices. The study also contributes to the literature by offering further empirical evidence on the relationship between corporate governance and REM in Islamic banks.
REM, SSB index, BOD attributes, Islamic banks.
PORTFOLIO DIVERSIFICATION OPPORTUNITIES FOR NIGERIA’S ISLAMIC (SHARIAH) STOCK INVESTORS WITH THEIR MAJOR TRADING PARTNERS
This paper investigates potential diversification opportunities for Nigeria’s Islamic stock investors with Nigeria’s top trading partners (France, Spain, United Kingdom and India). It employs daily data of Islamic stock indices, namely Nigeria’s LOTUS Islamic index and FTSE shariah indices of the four countries, from 14 July 2015 to 14 December 2022. Using multivariate GARCH-DCC, we show that Islamic investors from Nigeria have almost no portfolio diversification opportunities in the Islamic stock markets of these countries except for a slight portfolio diversification opportunity found in the UK Islamic stock market for a very short period (one year) and almost none for India, Spain, France. The results from the continuous wavelet transform (CWT) however suggest that diversification opportunities are present in UK, France, Spain and not in India. These findings have important policy implications for policy makers and investors seeking to invest in these countries to be mindful of the appropriate investment timing to minimize potential future losses in investments.
Islamic stock indices, Portfolio diversification, Trading partners, M-GARCH, Wavelet analysis.
ESG AND BANKING PERFORMANCE IN EMERGING AND DEVELOPING COUNTRIES: DO ISLAMIC BANKS PERFORM BETTER?
This paper investigates the effects of Environmental, Social, and Governance (ESG) implementation on banking performance in emerging and developing countries. Applying the Two-step System Generalized Method of Moments (System-GMM) to panel data of 179 banks across 29 countries spanning 2016-2022, we find that ESG implementation significantly enhances overall banking profitability. However, when we assess the implications of ESG on Islamic banks, we find that overall ESG commitment significantly reduces profitability. As for the individual ESG pillar, we note the profit-enhancing effect of environmental pillar on both Islamic and conventional bank profitability. Some evidence is also uncovered for the significant positive effect of social pillar on conventional bank profitability. Finally, we note no significant influences from governance pillar. These results highlight the divergent impacts of ESG implementation on Islamic and conventional banks. We conclude that policymakers should exercise caution in designing and implementing ESG policies, ensuring they are tailored to promote optimal performance across different banking models. This study contributes to the growing body of the literature on sustainable finance and provides valuable insights for regulators and bank managers in emerging and developing economies.
Banking performance, ESG, Banks, Profitability.
A MAQASID-BASED WELFARE INDEX IN INDONESIA: AN EMPIRICAL INVESTIGATION
Acknowledging the importance of having an alternative welfare measurement to the prevailing material-based conventional welfare index, this study formulates a maqasid-based welfare index that encapsulates the material, spiritual, and social needs of individuals and then calculates the index for all regions in Indonesia. Our proposed index is based on a comprehensive set of maqasid indicators and on appropriate weighting of each maqasid indicator to arrive at the index scores for all regions in the country. From the results, four provinces in Indonesia are at the high level of Maqasid-based welfare. They are Aceh, Nusa Tenggara Barat, Gorontalo, and Sulawesi Barat. Meanwhile, twenty-five provinces are at the medium range of welfare. The index we compute for each region should prove useful as it would allow policymakers to tailor welfare strategies to each province’s strong and weak areas of the maqasid al-shariah. ACKNOWLEDGEMENT Special thanks to Universitas Muhammadiyah Malang and International Islamic University Malaysia for their research support and valuable resources provided throughout this study.
Maqasid-based welfare, Welfare measurement, Welfare index.
DIGITAL FINANCIAL INCLUSION AND BANK STABILITY IN A DUAL BANKING SYSTEM: DOES FINANCIAL LITERACY MATTER?
This study examines the relationship between digital financial inclusion (DFI), financial literacy, and stability of conventional and Islamic banks across 15 countries from 2011 to 2020. The findings show that DFI significantly enhances the stability of conventional banks, particularly through increased customer engagement with digital financial services, improving asset quality and reducing risks. In contrast, the relationship between DFI and stability of Islamic banks is either insignificant or negative, which may be attributed to Shariah compliance requirements, product mismatches, and competition from conventional banks and FinTech firms. Furthermore, while DFI boosts stability in conventional banks, it also exposes them to potential risks such as digital bank runs, as seen in the case of Silicon Valley Bank (SVB) in 2023. Additionally, high financial literacy positively interacts with DFI to boost the stability of conventional banks but has a negative impact on Islamic banks. Arguably, financially literate customers may resist digital services that do not fully meet Islamic principles. The results highlight the need for tailored strategies in Islamic banking, including the development of Shariah-compliant digital products, enhanced financial literacy programs, and more robust risk management frameworks to mitigate vulnerabilities like digital bank runs and improve stability in the sector.
Digital financial inclusion, Bank stability, Financial literacy, Dual-banking.
CONSUMERS' BEHAVIOURAL INTENTION TO ADOPT SHARI’AH-COMPLIANT DIGITAL GOLD PLATFORM IN MALAYSIA: EXTENSION OF UTAUT MODEL
The advancement of technology has resulted in the emergence of digital platforms, such as digital gold platforms, as alternative channels for retail investment. In this study, we investigate factors that influence consumers’ behavioural intentions towards a Shari’ah-compliant digital gold platform in Malaysia. The study incorporates trust and Shari’ah-compliance as constructs in the extended UTAUT model. Gathering data from 130 respondents and applying SmartPLS 4.0 for data analysis, the study documents the significance of performance expectancy, effort expectancy, trust, and Shari’ah-compliance. Meanwhile, facilitating conditions and social influence turn out to be insignificant. The study notes that feeling safe, secure, and transparent as well as having Shari’ah-compliant features are crucial factors that influence consumer intention to adopt the Shari’ah-compliant digital gold platform in Malaysia. It is also critical to be aware of the services provided by Shari’ah-compliant providers and financial institutions by utilising the social network within the Shari’ah-compliant finance sphere. ACKNOWLEDGEMENT The second author (Nik Hadiyan Nik Azman) would like to Acknowledge “Ministry of Higher Education Malaysia for Fundamental Research Grant Scheme with Project Code: FRGS/1/2021/SS01/USM/03/1”.
Consumers' behavioural intention, Shari’ah-compliant digital gold platform, UTAUT model.
THE ROLE OF DEPOSIT INSURANCE IN SUPPORTING ISLAMIC MICROFINANCE INSTITUTIONS: INSIGHTS FROM INDONESIA
This study assesses the necessity of a Deposit Insurance System (DIS) for Islamic Microfinance Institutions (IMFIs). It first identifies key factors influencing knowledge of DIS among stakeholders and then proceeds to evaluate the social impact of IMFIs and examine the urgency for a DIS and respondents' willingness to pay deposit insurance premiums. Conducting survey using purposive sampling, we obtain required data for the analysis from 405 respondents. Applying the logistic regressions, we find reveal that education, work experience, and financial behaviors influence DIS awareness. The findings underscore the urgency of implementing DIS to bolster stakeholder trust and financial system stability, with respondents expressing willingness to contribute premiums. These insights contribute to designing a Shariah-compliant DIS that aligns with the unique operational characteristics of IMFIs, supports sustainable industrialization, and advances SDG-9 goals. The study highlights actionable pathways for policymakers, regulatory bodies, and IMFI managers to foster a resilient and inclusive financial ecosystem. ACKNOWLEDGEMENT Special thanks to the National Committee of Islamic Economic and Finance of the Republic of Indonesia and Universitas Airlangga for the financial assistance. Universitas Airlangga through International Research Collaboration Scheme Top #500, Airlangga Research Fund, Year 2023, Universitas Airlangga, No: 359/UN3.15/PT/2023.
Islamic microfinance, Deposit insurance, Economic growth, SDG-9, Indonesia.
PROMOTING INCLUSIVE AND SUSTAINABLE GROWTH WITH SHARIA ECONOMY AMID THE AGE OF DIGITALIZATION AND GLOBAL UNCERTAINTY
HOW FEASIBLE IS A CONVERTIBLE IJARAH CONTRACT FOR SME FINANCING?: A SIMULATION APPROACH
Islamic financial institutions have relied for decades on margin-based contracts to provide financing for the business sector, despite the basic idea that Islamic finance is expected to provide an equity-based or a profit and loss sharing (PLS) contract. This fact raises the need to encourage the use of a margin-based instrument with an innovative scheme that allows for conversion of the contract into a PLS-based contract. Moreover, we propose a convertible ijarah contract to fill this need. A convertible ijarah contract is an ijarah (rent) contract that is convertible to a PLS contract according to the Islamic financier’s decision. In this study, we simulate three scenarios of project financing with (a) murabaha as a margin-based contract, (b) musharaka as a PLS contract and (c) a convertible ijarah contract. The aim is to evaluate whether the convertible ijarah contract will provide a higher return for the financier compared to the other contracts. The main input of the simulation is nine sectors of Indonesian SMEs’ financial performance. We found that when the financial performance of Indonesian SMEs was measured by short-term financial performance, the convertible ijarah contract outperformed the murabaha contract for all sectors but did not outperform the musharaka contract, except for low-margin sectors. However, when the financial performance of Indonesians SMEs was measured by long-term economic performance, we found that the convertible ijarah contract outperformed the murabaha contract and musharaka contract for almost all sectors. Kami menemukan bahwa kontrak ijarah konversi mengungguli kontrak murabahah dan
DEVELOPMENT OF SHARIA HOSPITALS AS A SOURCE OF NEW ECONOMIC GROWTH
The development of Sharia hospitals represents a unique integration of Islamic values into healthcare services, fostering new avenues for economic growth. This study has three key objectives: (1) examining factors contributing to the establishment of Sharia hospitals, (2) analyzing the essential elements of Sharia hospital development using the Business Model Canvas (BMC) to ensure sustainability; and (3) assessing Sharia hospitals' potential to drive economic growth. Through a mixed-methods approach, quantitative data were collected from 619 patients and 149 respondents, while qualitative insights were gathered through focus group discussions and in-depth interviews with stakeholders including hospital managers and policymakers. Results indicate that Sharia hospitals report higher levels of patient satisfaction and loyalty compared to non-sharia hospitals, with significant emphasis on service quality, and experiential marketing. The integration of Islamic financial instruments such as Zakat, Infak, Sedekah, and Wakaf (ZISWAF) also enhances financial accessibility for underserved populations, promoting equitable healthcare. Indonesia also has the opportunity to open up Muslim-friendly health tourism destinations, attracting patients from other Muslim-majority countries. The growth of Sharia hospitals also contributes to the expansion of the halal ecosystem in Indonesia. This is not only beneficial for the health sector but also drives economic growth. ACKNOWLEDGMENT The authors acknowledge the support from the Research Grant Bank Indonesia (RGBI) 2024, for funding this research endeavor.
Sharia hospital, New economic growth, Business model canvas, Islamic finance.
WHAT FACTORS INFLUENCE THE WELFARE OF ZAKAT BENEFICIARIES?
This study investigates the influence of demographic, social, and economic variables on the welfare of zakat beneficiaries in West Java, Indonesia. Using a sample of 1,300 zakat beneficiaries, the paper applies the Chi-square Automatic Interaction Detector (CHAID) method. Our findings suggest the crucial role of monitoring by amil institutions in the respective areas on the improvement of material and spiritual conditions of zakat beneficiaries. The study suggests that amil plays a major part in the success of zakat distribution programs and the programs should be further enhanced for the betterment of zakat beneficiaries. This study also shows that apart from zakat distribution programs, there are also some demographic, social, and economic variables that affect the income and spiritual conditions of zakat beneficiaries.
Zakat, Amil, Zakat monitoring programs, CHAID, Zakat beneficiaries.
HOW ASEAN4 CONVENTIONAL, ISLAMIC, AND ESG INDICES REACT TO TWITTER MARKET UNCERTAINTY?
We investigate the time varying return spillover of ASEAN4 asset classes from four countries including Thailand, Philippines, Malaysia and Indonesia, and Twitter based market uncertainty measure, using daily data from 01-Sep-2014 to 21-Apr-2023. The estimations are performed using TVP-VAR approach. The results reveal that the dynamic connectedness of ASEAN4 markets fluctuates significantly. It peaked during bearish periods (2015-2016 and 2020) and remained low during market booms (2017-2018 and 2022). Islamic and ESG indices exhibit patterns similar to conventional indices. Indonesia and Malaysia emerge as net shock transmitters until the pandemic, with Thailand becoming a net transmitter post-COVID. Thailand’s role shifts between receiver and transmitter based on economic conditions relative to other ASEAN countries. Twitter Market Uncertainty Index (TMUENG) primarily remains a receiver, with limited impact on ASEAN4 Conventional, Islamic, and ESG indices. The findings are robust to a battery of robustness tests and carry important policy implications for investors and policymakers.
ASEAN4, Twitter market uncertainty, Islamic finance, ESG investments.
SHARIA-COMPLIANT DEPOSIT INSURANCE AND DEPOSIT FLOWS: EVIDENCE FROM A DUAL BANKING MARKET
We investigate whether the introduction of Islamic Deposit Insurance (IDI) affects deposit flow of and the pricing by Islamic banks vis-à-vis conventional banks for the case of Indonesia. Using December 2014 announcement of a separate deposit insurance scheme for Indonesia’s Islamic and traditional banks into two different funds as an exogenous event, we employ a difference-in-differences (DID) framework using matched bank-level data from 18 Islamic and conventional banks, comparing periods before and after the policy announcement. Our findings indicate that the announcement significantly boosts the growth of small deposits in Islamic banks compared to traditional banks, with an apparent increase in deposit growth after separating deposit insurance funds.
Sharia-compliant, Deposit insurance, Dual banking.
RELIGION AND GREEN: THE DUAL POWER OF ESG AND SHARIAH-COMPLIANT STOCKS IN BRAND VALUES OF MALAYSIA, INDONESIA, AND SAUDI ARABIA
This study examines the differential impact of Environmental, Social, and Governance (ESG) factors and Shariah compliance on brand value and stock returns across Malaysia, Indonesia, and Saudi Arabia using a sample of 1,474 publicly listed Shariah-compliant firms. Using panel data regression, quantile-on-quantile regression, Granger causality, and FGLS methods, we find that ESG factors significantly enhance brand value and stock returns in Malaysia and Indonesia, with stronger effects than conventional stocks, especially under positive investor sentiment. However, in Saudi Arabia, ESG factors are insignificant, and Shariah compliance alone drives financial performance, indicating that alignment with Islamic principles is a prerequisite for market impact in this context. The quantile-on-quantile analysis further shows that ESG and Shariah compliance yield stronger effects at higher quantiles of brand value, benefiting firms with greater brand equity. These results validate the signaling theory, highlighting ESG and Shariah compliance as mechanisms to reduce information asymmetry and enhance investor confidence in Islamic financial markets. For policymakers, this study underscores the need for robust ESG and Shariah compliance standards, advocating transparent reporting to foster market trust and attract sustainable investment, particularly by advancing a Shariah-compliant green economy in Saudi Arabia and beyond.
ESG, Shariah compliance, Brand value, Stock returns, Islamic finance.
WHAT HAS BEEN DISCUSSED ON ZAKAT INSTITUTIONS? A BIBLIOMETRIC STUDY
This study conducts a comprehensive bibliometric analysis of research on zakat published between 2011-2024 with the aims to map its intellectual structure, thematic evolution, and collaboration networks. Using science mapping principles, 312 documents from Scopus database are analyzed through co-authorship, citation counts, co-occurrence patterns, thematic analysis, and network visualization using R-based bibliometrix package and biblioshiny interface with AI-assisted visualization. Results reveal five distinct thematic clusters: social and psychological aspects of zakat compliance; digital transformation and technology adoption; institutional efficiency with Malaysian focus; financial governance and accountability; and macro-level zakat management in Indonesia. The field demonstrates remarkable growth with a 28.29% annual growth rate, dominated by Malaysian and Indonesian institutions accounting for over 65% of publications. Research evolution shows a progression from foundational governance issues (2011-2016) to strategic management (2016-2020) and contemporary digital innovation (2020-2024). The study identifies significant research gaps, particularly the absence of in-depth qualitative methodologies and limited cross-country comparative studies. This study offers novel insights into the evolution of zakat governance and highlights the need for interdisciplinary and cross-regional research to strengthen institutional relevance and inclusivity in zakat management. ACKNOWLEDGMENT The authors received the support funding for research, authorship and publication of this article from The Indonesian Education Scholarship (Beasiswa Pendidikan Indonesia), Center for Higher Education Funding and Assessment (Pusat Pelayanan Pembiayaan dan Asesmen Pendidkan Tinggi), Ministry of Higher Education, Science, and Technology of Republic Indonesia, and Endowment Fund for Education Agency (Lembaga Pengelola Dana Pendidikan). The authors gratefully acknowledge the support and facilities provided by UPT Perpustakaan Universitas Brawijaya in the completion of this article.
WEATHERING THE STORM: SHARIAH COMPLIANCE, DIGITAL INNOVATION, AND STOCK PERFORMANCE DURING COVID-19
The COVID-19 pandemic disrupted global financial markets, highlighting the need for factors that enhance resilience. This study examines whether Shariah compliance and digital innovation, individually and together, mitigate declines in stock performance during economic downturns. Drawing on Signaling Theory and Dynamic Capabilities Theory (DCT), this study argues that Shariah compliance serves as a signal of strong governance, while digital innovation enhances adaptability. Using firm-level data from Indonesia and a difference-in-differences (DID) model, our findings suggest that both factors help firms withstand crises, with digital innovation amplifying the benefits of Shariah compliance. This study provides insights into how Islamic finance and digital transformation contribute to financial stability. ACKNOWLEDGMENT This research is funded by HIBAH Penelitian International BINUS University 2024 (BINUS International Research Grant 2024). The authors would like to express their sincere gratitude to BINUS University for the support and funding provided.
Shariah stocks, Stock performance, COVID-19, Digital transformation.
ACCOUNTING EDUCATION, DISCIPLINE, AND SUPERVISION WHEN WOMEN IN CHARGE IN ISLAMIC MICROFINANCE: CASE STUDIES OF INDONESIA AND PAKISTAN
This paper investigates the relations between women's freedom within the family and their access to accounting education, adherence to discipline, and supervision for the cases of Indonesia and Pakistan using the Structural Equation modelling. The participation of women in microfinance is deemed crucial for the success of poverty alleviation programs, particularly in countries where group-based initiatives are prevalent. The observation reveals that women involved in Islamic microfinance programs experience economic, moral, and religious empowerment, enabling them to overcome economic challenges and poverty, thereby enhancing their living standards. The findings indicate that women's ability to manage family finances has a direct impact on their access to accounting education, discipline, and supervision. The argument posits that autonomy plays a significant role in influencing accounting education, discipline, and supervision within the observed groups in Indonesia and Pakistan. The study further documents that the influence of women's life freedom in Baitut Tamkin Tazkia Madani (BTTM) Indonesia on accounting education and supervision surpasses that in Akhuwat Pakistan. Conversely, the impact of women's life freedom in BTTM on accounting discipline is lower than that in Akhuwat. This research addresses the existing gap in the literature concerning the study of women and Islamic microfinance, emphasizing the importance of considering Islamic perspectives on women, family, and microfinance in social policies aimed at poverty eradication. ACKNOWLEDGMENT The authors gratefully acknowledge the partial support of the Ministry of Religious Affairs of the Republic of Indonesia, as well as the research support provided by BTTM (Bogor, Indonesia) and Akhuwat (Lahore, Pakistan). We also express our sincere appreciation to the journal’s editors and anonymous reviewers for their constructive comments and valuable suggestions.
Accounting education, Discipline, Supervision, Islamic microfinance, Women, Indonesia, Pakistan.
ISLAMIC LABEL AND STOCK PRICE CRASH RISK
This study explores how an Islamic label on firms influences stock price crash risk in Indonesia. We utilize a sample of 566 nonfinancial firms listed between 2016 and 2021, apply panel data method, and find that the Islamic label benefits the firms by lowering crash risk. Investors consider firms with the Islamic label as lower risk due to leverage constraints they must adhere to, which contributes to a decreased crash risk. Our primary results are robust to various sensitivity analyses. We also find that dividend policy and audit quality strengthen the Islamic label-crash risk nexus. The COVID-19 pandemic weakens the link between the Islamic label and crash risk. Furthermore, the Islamic label-crash risk nexus persists for up to two years.
Islamic label, Stock price crash risk, Dividend policy, Audit quality, COVID-19 pandemic.
TRENDS, EVOLUTION AND FUTURE RESEARCH DIRECTIONS IN WAQF: A BIBLIOMETRIC ANALYSIS THROUGH COMPLEX NETWORKS
This study employs a quali-quantitative approach that combines both bibliometric standard method and content analysis process to analyse WAQF publications and derive the current trends, evolution and future research directions in this important sector of Islamic finance industry. Our final dataset consists of 645 publications retrieved from the Scopus database and covers the period from 1975 to 2023. We use VOSviewer, Bibliometrix R-Package, and Microsoft Excel to conduct our three-stage analysis, namely bibliometric performance analysis, bibliometric network map analysis, and content analysis. Our descriptive analysis indicates that Malaysia and Indonesia top the list of most influential countries, hold the most relevant institutions, and accommodate on average half of the top ten most productive and impactful authors. Our network map analysis on the other hand ascertains the existence of four primary research themes namely, cash WAQF; WAQF as part of Islamic social finance ecosystem and its contribution to sustainable development; accountability; and governance and disclosure. An important policy implication of our results is that policymakers should integrate WAQF and Islamic social finance institutions into the mainstream financial system, establish effective regulatory and governance ecosystems for WAQF institutions to increase their ability to boost people’s social welfare, expand the spectrum of impact investment, and strengthen their contribution to more sustainable growth.
WAQF, Islamic social finance, Bibliometric analysis.
FACTORS INFLUENCING MUSLIM PREFERENCE FOR ISLAMIC BANKING IN RUSSIA
This study analyzes factors influencing preference of Muslims in Russia to choose Islamic Banking. This is important as Russia has recently introduced Islamic banking into their national banking system. Modified Theory of Planned Behavior is used to structure the empirical model which is analyzed using SMART PLS4 with PLS-SEM method. Using data gathered from 476 respondents, the result shows that attitude, perceived behavioral control, and religiosity have significant influences on intention, and intention significantly influences the behavior of choosing Islamic Banking in Russia. However, subjective norms and trust are not significant. Educational campaigns incorporating norms and Islamic values, along with developing a special regulatory framework to ensure Sharia compliance, are recommended. Future studies may explore additional variables to enhance understanding of Islamic Banking practices in Russia.
ISLAMIC FINANCE'S ROLE IN SOCIAL EQUITY AND POVERTY ALLEVIATION: TRENDS AND GAPS
This study investigates global research trends on the role of Islamic finance in promoting social equity and poverty alleviation. Using bibliometric and content analysis methods, we analyze publications on the subject from Scopus from 1991 to 2025 using Rstudio, VOSviewer and Excel to identify key authors, institutions, and journals and to perform a thematic analysis. The results show increasing academic interest, with publication peaking from 2020 onwards. Leading contributors are M. Kabir Hassan and Universiti Utara Malaysia (UUM) for respectively authors and institutions. Dominant themes include zakat, waqf, Islamic microfinance, and financial inclusion, alongside emerging areas like Islamic fintech and productive zakat. Despite its growth, the field remains fragmented, with gaps in governance, regional representation, and long-term impact assessments. Future research should focus on integrating Islamic finance with national poverty strategies, addressing gender disparities, and leveraging technology for greater financial inclusion. This study provides a comprehensive roadmap for scholars and policymakers, contributing to a deeper understanding of Islamic finance as a tool for fostering social equity and poverty alleviation.
Islamic finance, Poverty alleviation, Social equity, Bibliometric, Content analysis.
CORPORATE SOCIAL PERFORMANCE AND FINANCIAL STABILITY: EVIDENCE FROM ISLAMIC, SOCIAL AND CONVENTIONAL BANKING MODELS
This paper addresses two key issues in Corporate Social Performance (CSP) research. First, it investigates the impact of CSP on Financial Stability (FS), and second, it examines the influence of different banking models on the relationship between CSP and FS. Using a cross-country sample of 117 financial institutions from 36 countries over an 8-year period (2013-2020) and the System Generalized Method of Moments (GMM) estimation method, it finds that banking models significantly affect the CSP-FS relationship. This is attributed to diminishing marginal benefits of economic growth beyond a certain level of financial intermediation, which increases financial risk. The results give new insights into the synergies and divergences between different banking models and the overarching goals of social performance and financial stability. This research contributes novel insights that can inform policymakers, regulators, and industry stakeholders in their quest for a more resilient and sustainable banking sector.
Corporate social performance, CSP index, Financial stability, Islamic banking, Social banking, Values-based banking.
Copyright (c) 2024 Journal of Islamic Monetary Economics and Finance
A BIBLIOMETRIC ANALYSIS AND MAPPING STUDY OF RISK MANAGEMENT IN ISLAMIC FINANCIAL INSTITUTIONS
This paper performs a bibliometric analysis on risk management in Islamic financial institutions (IFIs), identifying significant research themes, influential authors, as well as emerging trends from 2003 to 2024. A systematic search strategy identifies 524 relevant publications from the Scopus and Web of Science databases. Using techniques from network analysis, science mapping, and performance analysis with the help of VOSviewer software, we find that 2020 and 2021, with 86 and 97 papers, are the most productive years in both databases. University of New Orleans and International Islamic University Malaysia are significant institutions. The most prominent journal is the International Journal of Islamic and Middle Eastern Finance & Management, which garners the highest number of citations. The Journal of Islamic Accounting and Business Research has the highest number of publications. Malaysia is a significant contributor to this field. Moreover, research on risk management in other sectors has been scant, concentrating solely on Islamic banking. Relying on particular databases and English-language publications could have eliminated relevant non-English research.
Risk management, Risk credit, Islamic banking, Islamic financial institutions, Corporate governance.
A bibliometric analysis and mapping study of risk management in Islamic financial institutions from 2004 to 2024
THE LEVEL OF CONVERGENCE TO SHARI’AH PRINCIPLES AND CORPORATE PROFITABILITY
This study constructs a Shari'ah convergence index for 1,362 companies operating in 10 different Islamic countries between 2017 and 2021 and assesses its relation to corporate profitability. Shari’ah screening variables are based on existing Shari’ah screening literature and applications, and variable weights are assigned using the Integrated Determination of Objective Criteria Weights (IDOCRIW) technique, a widely used, multi-criteria decision-making method. The results suggest that 4% of the sample is completely non-compliant as they engage in non-permissible business activities, 82% has a non-compliant activity level below 30% and the remaining 14% has a non-compliant activity level between 41 and 99%. Our panel data regression analysis shows that, while the Shari'ah convergence index does not affect operating profitability, it does have a statistically positive effect on total corporate profitability. These findings are attributable to two factors, interest burden and debt level. It seems that, for Islamic companies, The high cost of debt service may offset the advantage of high leverage on profitability. ACKNOWLEDGEMENTS We thank to Prof. Abdullah Yalaman for his valuable comments and to Eric Laden for his proofreading.
Shari’ah convergence, Shari’ah screening, Multi-criteria decision-making, Return on assets, Return on equity.
AUGMENTING ISLAMIC DIGITAL PAYMENT EFFECT ON MUSLIM CUSTOMER PURCHASE DECISION ON MICRO, SMALL AND MEDIUM ENTERPRISES’ (MSMEs) PRODUCTS
To support the role of digital transaction in improving the growth of economy, the effect of Islamic digital payments on Muslim customer purchase decision on Micro, Small and Medium Enterprises’ (MSMEs) products should be augmented. This study employs a modified Technology acceptance Model (TAM) to examine whether perceived values mediate or augment the effect of Islamic digital payments on purchase decisions of MSMEs’ products. Using data gathered from 477 respondents, we find that the perceived values do augment Islamic digital payment effect on Muslim customer purchase decision on MSMEs products. However, their augmentation for the case of cash payments is absent. In other words, Islamic digital payments and perceived values are together the predictors of Muslim customer purchase decision while cash payments are not. We also note that the Islamic digital payments are the predictor of perceived values.
Islam, Digital payment, Cash payment, Purchase decision, MSMEs.