nep-isf New Economics Papers
on Islamic Finance
Issue of 2021‒05‒10
three papers chosen by
Mohamed Mohamed Tolba Said

  1. Determinants and Sustainability of External Debt: A Panel Data Analysis for Selected Islamic Countries By Waheed, Abdul; Abbas, Shujaat
  2. Determinants of Islamic Banking Profitability: Empirical Evidence from Palestine By Abugamea, Gaber
  3. Changing Ingroup Boundaries: The Effect of Immigration on Race Relations in the US By Fouka, Vasiliki; Tabellini, Marco

  1. By: Waheed, Abdul; Abbas, Shujaat
    Abstract: This study analyses the determinants and sustainability of external debt of selected Islamic countries. The study uses panel data of ten oil & gas exporting countries and nine oil & gas importing countries from 2004 to 2016. For oil & gas exporting Islamic countries, economic growth, central government revenue, FDI, and population have a negative effect on external debt, while central government expenditure, trade openness, inflation, and current account balance have a positive effect on external debt. For oil & gas importing Islamic countries, economic growth, central government revenue, current account balance, domestic investment, and labour force have a negative effect on external debt; whereas, FDI and foreign exchange reserve have a positive effect on external debt. The result of sustainability analysis shows that for many oil & gas importing Islamic countries, the actual debt is more than their expected debt based on their macroeconomic performance. For oil & gas exporting Islamic countries, the situation is not as alarming and their external debt position is still better, except few countries.
    Keywords: External debt, Debt sustainability, Panel data, Oil & gas exporters, Oil & gas importers
    JEL: F1 F3 O4
    Date: 2021
  2. By: Abugamea, Gaber
    Abstract: The objective of this study is to examine the impact of bank-specific and major macroeconomic factors on the profitability of the biggest two Islamic banks in Palestine over the time period 1997-2018. It employs Pooled Regression analysis to investigate the effect of bank’s asset size, capital, loans, liabilities, operating cost, economic growth and inflation on key bank profitability indicators; return on assets (ROA) and return on equity (ROE), respectively. The main findings show that size and capital have positive impact on ROE. Loans are positively correlated with both ROA and ROE. Liabilities are negatively related to ROA and operating cost has negative impact on both ROA and ROE. Moreover, Islamic banks not benefited significantly from both the inflationary environment and economic growth.
    Keywords: Banking Profitability, Internal & External Factors, Pooled Regression
    JEL: G12
    Date: 2021–05–03
  3. By: Fouka, Vasiliki (Stanford University); Tabellini, Marco (Harvard Business School)
    Abstract: How do social group boundaries evolve? Does the appearance of a new outgroup change the ingroup's perceptions of other outgroups? We introduce a conceptual framework of context-dependent categorization, in which exposure to one minority leads to recategorization of other minorities as in- or outgroups depending on perceived distances across groups. We test this framework by studying how Mexican immigration to the US affected White Americans' attitudes and behaviors towards Black Americans. We combine survey and crime data with a difference-in-differences design and an instrumental variables strategy. Consistent with the theory, Mexican immigration improves Whites' racial attitudes, increases support for pro-Black government policies and lowers anti-Black hate crimes, while simultaneously increasing prejudice against Hispanics. Results generalize beyond Hispanics and Blacks and a survey experiment provides direct evidence for recategorization. Our findings imply that changes in the size of one group can affect the entire web of inter-group relations in diverse societies.
    Keywords: ingroup–outgroup relations, race, immigration
    JEL: J11 J15
    Date: 2021–04

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