nep-isf New Economics Papers
on Islamic Finance
Issue of 2022‒05‒23
four papers chosen by
Rachita Gulati
IIT Roorkee

  1. Does Religious Diversity Improve Trust and Performance? Evidence from Lebanon By Canaan, Serena; Deeb, Antoine; Mouganie, Pierre
  2. Prosedur Pemberian Pembiayaan Murabahah Pada Baitul Maal Wa Tamwil (BMT) At-Taqwa Muhammadiyah Cabang Siteba By S, Irvan Afandi.; dona, Elva
  3. Heterogeneous Information Network based Default Analysis on Banking Micro and Small Enterprise Users By Zheng Zhang; Yingsheng Ji; Jiachen Shen; Xi Zhang; Guangwen Yang
  4. Corporate Finance, Industrial Performance and Environment in Africa: Lessons for Policy By Ekundayo P. Mesagan; Titilope C. Adewuyi; Olugbenga Olaoye

  1. By: Canaan, Serena (Simon Fraser University); Deeb, Antoine (University of California, Santa Barbara); Mouganie, Pierre (Simon Fraser University)
    Abstract: Religious divisions have long played a primary role in major conflicts throughout much of the world. Intergroup contact may increase trust between members of different religions. However, evidence on how inter-religious contact affects individuals' behavior towards one another is scarce. We examine this question in the setting of a four-year university in Lebanon, a country with a long history of deep divisions and armed conflicts between religious groups. To identify causal effects, we exploit the university's random assignment of first-year students to peer groups. We proxy students' religious backgrounds by whether they attended secular, Christian or Islamic high schools—the last of which have the most religiously homogeneous student body. Results indicate that for students from Islamic high schools, exposure to peers from different religious backgrounds decreases their enrollment in courses taught by instructors with distinctively Muslim names, suggesting that contact improves trust towards members of other religions. Moreover, we show that students from Islamic schools experience improvements in GPA when interacting with those from other groups, while exposure to Islamic students reduces secular students' academic performance.
    Keywords: diversity, religious schools, intergroup contact
    JEL: I23 J15
    Date: 2022–04
  2. By: S, Irvan Afandi.; dona, Elva
    Abstract: Murabahah financing is more commonly used in Islamic finance as well as in BMT At-Taqwa Muhammadiyah Siteba Branch. The purpose of this study was to determine the procedure for financing the BMT. This study is a descriptive analysis by explaining the development of murabahah financing and the number of customers and the procedures for providing such financing from 2015-2019. The results of this study are an increase in murabahah financing during the analysis period as well as the number of customers. This capability is supported by BMT health data which is getting better in the year of analysis. Reflected by its NPL value. The murabahah financing procedure is very easy to understand and apply to prospective borrowers as well as from the BMT itself.
    Date: 2022–03–24
  3. By: Zheng Zhang; Yingsheng Ji; Jiachen Shen; Xi Zhang; Guangwen Yang
    Abstract: Risk assessment is a substantial problem for financial institutions that has been extensively studied both for its methodological richness and its various practical applications. With the expansion of inclusive finance, recent attentions are paid to micro and small-sized enterprises (MSEs). Compared with large companies, MSEs present a higher exposure rate to default owing to their insecure financial stability. Conventional efforts learn classifiers from historical data with elaborate feature engineering. However, the main obstacle for MSEs involves severe deficiency in credit-related information, which may degrade the performance of prediction. Besides, financial activities have diverse explicit and implicit relations, which have not been fully exploited for risk judgement in commercial banks. In particular, the observations on real data show that various relationships between company users have additional power in financial risk analysis. In this paper, we consider a graph of banking data, and propose a novel HIDAM model for the purpose. Specifically, we attempt to incorporate heterogeneous information network with rich attributes on multi-typed nodes and links for modeling the scenario of business banking service. To enhance feature representation of MSEs, we extract interactive information through meta-paths and fully exploit path information. Furthermore, we devise a hierarchical attention mechanism respectively to learn the importance of contents inside each meta-path and the importance of different metapahs. Experimental results verify that HIDAM outperforms state-of-the-art competitors on real-world banking data.
    Date: 2022–04
  4. By: Ekundayo P. Mesagan (Pan Atlantic University, Lagos, Nigeria.); Titilope C. Adewuyi (University of Lagos, Lagos, Nigeria.); Olugbenga Olaoye (Bells University of Technology, Nigeria)
    Abstract: This study employs the Pool Mean Group framework to investigate the impact of corporate finance and industrial performance on pollution in Africa between 1990 and 2020. The study, which focuses on 36 African nations, found that corporate financing insignificantly enhances environmental quality in the short run, while it significantly worsens the environment in the long run. Also, the result shows that industrial performance exerts a negative but insignificant impact on pollution in both the short- and long-run periods. Lastly, the interaction term between corporate finance and industrial performance has a negative and significant impact on pollution in both periods. With this striking result, the study recommends that efforts should be made to promote the growth of environmentally sound production plants in the continent through the removal of credit facilitation bottlenecks.
    Keywords: Corporate Finance, Industrial Performance, Pollution, Africa
    JEL: G3 L25 O14 Q53
    Date: 2022–01

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