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The effect of corporate governance on Islamic banking performance: a maqasid Shari’ah index approach on Indonesian Islamic banks

This study aims to provide empirical evidence on the Maqasid al-Shari’ah performance of Islamic banks in Indonesia for the period from 2012 to 2016. The Simple Additive Weighting (TSAW) is employed to obtain the performance of IBs according to the Maqasid al-Shari’ah. This study found that the Maqas...

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Main Authors: Rahman, Audia Syafa’atur, Haron, Razali
Format: Article
Language:English
Published: IIUM Institute of Islamic Banking and Finance (IIiBF), International Islamic University Malaysia (IIUM) 2019
Subjects:
HB126.4 Islamic Economics
HG3368 Islamic Banking and Finance
HG4001 Financial management. Business finance. Corporation finance.
Online Access:http://irep.iium.edu.my/72730/1/72730_The%20Effect%20of%20Corporate%20Governance.pdf
http://irep.iium.edu.my/72730/
https://journals.iium.edu.my/iiibf-journal/index.php/jif/article/view/343/153
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spelling my.iium.irep.727302020-02-21T07:38:07Z http://irep.iium.edu.my/72730/ The effect of corporate governance on Islamic banking performance: a maqasid Shari’ah index approach on Indonesian Islamic banks Rahman, Audia Syafa’atur Haron, Razali HB126.4 Islamic Economics HG3368 Islamic Banking and Finance HG4001 Financial management. Business finance. Corporation finance. This study aims to provide empirical evidence on the Maqasid al-Shari’ah performance of Islamic banks in Indonesia for the period from 2012 to 2016. The Simple Additive Weighting (TSAW) is employed to obtain the performance of IBs according to the Maqasid al-Shari’ah. This study found that the Maqasid Index for Indonesia IBs within the range between 11% and 28% with only few banks achieved above 20%. The impact of SSB characteristics and board structures are then tested on the IBs Maqasid al-Shari’ah performance. Regression result indicates that SSB characteristics (SSB size, SSB cross membership, SSB Education and SSB reputation) and board structures (Board size and Board independence) have an essential role in improving the performance of IBs. The findings denote SSB with smaller size, higher portion of SSB cross membership, lesser SSB hold doctorate degree, lesser reputable scholar, more members on board of directors, and less independence non-executive directors enhance the performance of IBs. This study offers practical implication and regulators in Indonesia should set up and impose a more robust and new tool to evaluate the Maqasid al-Shari’ah performance index in order to assess how far the role of IBs have contributed to the society. This will help all stakeholders to have informed decision which not only concentrates on performance based on financial ratios but also the entire dimensions of IBs that reflect the main purpose of IBs. IIUM Institute of Islamic Banking and Finance (IIiBF), International Islamic University Malaysia (IIUM) 2019-06-19 Article PeerReviewed application/pdf en http://irep.iium.edu.my/72730/1/72730_The%20Effect%20of%20Corporate%20Governance.pdf Rahman, Audia Syafa’atur and Haron, Razali (2019) The effect of corporate governance on Islamic banking performance: a maqasid Shari’ah index approach on Indonesian Islamic banks. Journal of Islamic Finance, 8 (Special Issue). pp. 1-18. ISSN 2289-2109 E-ISSN 2289-2117 https://journals.iium.edu.my/iiibf-journal/index.php/jif/article/view/343/153
institution Universiti Islam Antarabangsa Malaysia
building IIUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider International Islamic University Malaysia
content_source IIUM Repository (IREP)
url_provider http://irep.iium.edu.my/
language English
topic HB126.4 Islamic Economics
HG3368 Islamic Banking and Finance
HG4001 Financial management. Business finance. Corporation finance.
spellingShingle HB126.4 Islamic Economics
HG3368 Islamic Banking and Finance
HG4001 Financial management. Business finance. Corporation finance.
Rahman, Audia Syafa’atur
Haron, Razali
The effect of corporate governance on Islamic banking performance: a maqasid Shari’ah index approach on Indonesian Islamic banks
description This study aims to provide empirical evidence on the Maqasid al-Shari’ah performance of Islamic banks in Indonesia for the period from 2012 to 2016. The Simple Additive Weighting (TSAW) is employed to obtain the performance of IBs according to the Maqasid al-Shari’ah. This study found that the Maqasid Index for Indonesia IBs within the range between 11% and 28% with only few banks achieved above 20%. The impact of SSB characteristics and board structures are then tested on the IBs Maqasid al-Shari’ah performance. Regression result indicates that SSB characteristics (SSB size, SSB cross membership, SSB Education and SSB reputation) and board structures (Board size and Board independence) have an essential role in improving the performance of IBs. The findings denote SSB with smaller size, higher portion of SSB cross membership, lesser SSB hold doctorate degree, lesser reputable scholar, more members on board of directors, and less independence non-executive directors enhance the performance of IBs. This study offers practical implication and regulators in Indonesia should set up and impose a more robust and new tool to evaluate the Maqasid al-Shari’ah performance index in order to assess how far the role of IBs have contributed to the society. This will help all stakeholders to have informed decision which not only concentrates on performance based on financial ratios but also the entire dimensions of IBs that reflect the main purpose of IBs.
format Article
author Rahman, Audia Syafa’atur
Haron, Razali
author_facet Rahman, Audia Syafa’atur
Haron, Razali
author_sort Rahman, Audia Syafa’atur
title The effect of corporate governance on Islamic banking performance: a maqasid Shari’ah index approach on Indonesian Islamic banks
title_short The effect of corporate governance on Islamic banking performance: a maqasid Shari’ah index approach on Indonesian Islamic banks
title_full The effect of corporate governance on Islamic banking performance: a maqasid Shari’ah index approach on Indonesian Islamic banks
title_fullStr The effect of corporate governance on Islamic banking performance: a maqasid Shari’ah index approach on Indonesian Islamic banks
title_full_unstemmed The effect of corporate governance on Islamic banking performance: a maqasid Shari’ah index approach on Indonesian Islamic banks
title_sort effect of corporate governance on islamic banking performance: a maqasid shari’ah index approach on indonesian islamic banks
publisher IIUM Institute of Islamic Banking and Finance (IIiBF), International Islamic University Malaysia (IIUM)
publishDate 2019
url http://irep.iium.edu.my/72730/1/72730_The%20Effect%20of%20Corporate%20Governance.pdf
http://irep.iium.edu.my/72730/
https://journals.iium.edu.my/iiibf-journal/index.php/jif/article/view/343/153
_version_ 1662753728160071680
score 13.211869

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