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Islamic Banking and Finance—Essays on Corporate Finance, Efficiency and Product Development Volume Three

Islamic Banking and Finance—Essays on Corporate Finance, Efficiency and Product Development Volume Three
Islamic Banking and Finance—Essays on Corporate Finance, Efficiency and Product Development Volume Three

Published: April 2015

About the series: 

The International Conference on Islamic Economics and Finance (ICIEF) is the leading academic conference in the discipline organized by the International Association for Islamic Economics (IAIE) in collaboration with other key stakeholders, including the Islamic Research and Training Institute, Islamic Development Bank. It is the pioneering international conference on Islamic economics organized first in Makkah Al Mukaramah, Kingdom of Saudi Arabia, in 1976 under the auspices of King Abdulaziz University and has since been held in numerous locations around the world. The conference as such has contributed immensely to the promotion of Islamic economics and finance. Since 2011, the Qatar Faculty of Islamic Studies (QFIS), of Hamad bin Khalifa University, Qatar Foundation, has also become a key partner in organizing the conference.

Disseminating research presented at ICIEF to the greatest number of researchers interested in the topic is important. It not only advances the discourse, but also grants those who did not have the privilege of attending the conference to partake in the discussion. To this end, this series of five volumes (two in Arabic to follow) presents the proceedings of 8th and 9th conferences, which were held in Doha and Istanbul respectively in 2011 and 2013. Each volume focuses on a particular sub-theme within the broader theme of Developing Inclusive and Sustainable Economic and Financial Systems. 


Due to the increasing availability of data, empirical work in Islamic finance is on the rise. The selection of papers in this volume reflects this empirical trend. The majority of the existing literature attempts to answer questions of a comparative nature. Islamic banks are often compared to conventional banks on various measures. Which banks are more stable, more profitable, and more efficient? A more fundamental question that some academics have asked is: 

Are Islamic banks unique to begin with?

Efficiency and profitability comparisons are perhaps the most common type of study in the field. Generally speaking, the more robust studies seem to show that there were few differences between Islamic and conventional banks before the crisis. During the crisis, however, evidence seems to suggest that Islamic banks were less profitable. The size of the bank is an important control variable in such comparative studies. Studies have shown that small Islamic banks appear to perform better than small conventional banks, but large conventional banks appear to perform better than large Islamic banks. Furthermore, recent anecdotal evidence appears to suggest that Islamic banks may face challenges in liquidity management, hitherto an area of lesser concern. Product development will thus remain a key topic for research in Islamic banking for reasons related to risk management as well as increasing competitive advantage.

Table of contents:


1. Valuation of Islamic Debt Instruments (sukuk): Lessons for Market Development

Mohamed Ariff and Meysam Safari, Bond University and SEGi University

2. The Impact of Islamic Debt on Company Value

Fitriya Fauzi, Stuart Locke, Abdul Basyith and M. Idris, University of Muhammadiyah Palembang (Indonesia) and University of Waikato (New Zealand)

3. Islamic Financing and Bank Characteristics in a Dual-Banking System: Evidence from Malaysia

Muhamed Zulkhibri, Islamic Development Bank

4. Leverage Risk, Financial Crisis, and Stock Returns: A comparison among Islamic, conventional, and socially responsible stocks

Vaishnavi Bhatt and Jahangir Sultan, Ramaiah Institute of Management Studies (Bangalore) and Bentley University

5. Is Shariah-Compliant Investment Universally Sustainable? 

A comparative study, Mehdi Sadeghi, Macquarie University (Australia)


6. The nexus between economic freedom and Islamic bank performance: Empirical evidence from the MENA banking sectors

Fadzlan Sufian and Muhamed Zulkhibri Abdul Majid, Universiti Islam Antarabangsa & Islamic Development Bank

7. The Efficiency of Bank Performance in the Gulf Region Before, During and After Crises

Abdel Latef Anouze, Qatar University

8. The Relationship Between Islamic Bank Efficiency and Stock Market Performance: Evidence from GCC Countries

Samir Srairi, Imen Kouki, and Nizar Harrathi, Faculty of Law, Economics and Management Jendouba, Higher Institute of Management, and Faculty of Economic Sciences and Management of Nabeul (Tunisia)

9. Conventional Banks Versus Islamic Banks: What is the Difference?

Huseyin Aytug and Huseyin Ozturk, University of California Santa Cruz and Leicester University 


10. Estimating Expected Returns on Mudaraba Time Deposits of Islamic Banks

Zeynep Topaloglu Calkan, Georgetown University—Qatar 

11. Composite Profit-Sharing Formulas for Musharaka Financing

Volker Nienhaus, University of Bochum, University of Reading and INCEIF

12. Indexing government debt to GDP: A Risk Sharing Mechanism for Government Financing in Muslim Countries

Syed Aun R. Rizvi and Shaista Arshad, INCEIF and International Islamic University Malaysia

13. Concept and Mathematics of Islamic Valuation and Financial Engineering

Nadi Serhan Aydin and Martin Rainer, SESRIC and Middle East Technical University, Turkey


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