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The governance, risk-taking, and performance of Islamic banks

Sabur Mollah, M. Kabir Hassan, Omar Al Farooque, Asma Mobarek

Journal of Financial Services Research, Volume: 51, Issue: 2, Pages: 195 - 219

Swansea University Author: Sabur Mollah

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DOI (Published version): 10.1007/s10693-016-0245-2

Abstract

We examine whether the difference in governance structures influences the risk taking and performance of Islamic banks compared to conventional banks. Using a sample of 52 Islamic banks and 104 conventional banks in 14 countries for the period from 2005 to 2013, we conclude that the governance struc...

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Published in: Journal of Financial Services Research
ISSN: 0920-8550 1573-0735
Published: 2016
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URI: https://cronfa.swan.ac.uk/Record/cronfa38261
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first_indexed 2018-01-23T13:50:35Z
last_indexed 2019-07-24T15:08:31Z
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spelling 2019-07-24T11:31:43.8167127 v2 38261 2018-01-23 The governance, risk-taking, and performance of Islamic banks 7bf64278ced3687f26a4b5d73dd4696c Sabur Mollah Sabur Mollah true false 2018-01-23 BAF We examine whether the difference in governance structures influences the risk taking and performance of Islamic banks compared to conventional banks. Using a sample of 52 Islamic banks and 104 conventional banks in 14 countries for the period from 2005 to 2013, we conclude that the governance structure in Islamic banks plays a crucial role in risk taking as well as financial performance that is distinct from conventional banks. Particularly, we show that the governance structure in Islamic banks allows them to take higher risks and achieve better performance because of product complexities and transaction mechanisms. However, Islamic banks maintain a higher capitalization compared to conventional banks. These results support the research on Islamic investment and risk taking. Our results add a new dimension to the governance research that could be a valuable source of knowledge for policy makers and regulators in the financial services sector. Journal Article Journal of Financial Services Research 51 2 195 219 0920-8550 1573-0735 Corporate governance • Risk-taking • Firm performance • Islamic banks 31 12 2016 2016-12-31 10.1007/s10693-016-0245-2 COLLEGE NANME Accounting and Finance COLLEGE CODE BAF Swansea University 2019-07-24T11:31:43.8167127 2018-01-23T12:23:57.9281173 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Sabur Mollah 1 M. Kabir Hassan 2 Omar Al Farooque 3 Asma Mobarek 4 0038261-23012018122430.pdf AAM4.MOLLAH_ETAL_JFSR2017.pdf 2018-01-23T12:24:30.5330000 Output 669136 application/pdf Accepted Manuscript true 2017-04-14T00:00:00.0000000 true eng
title The governance, risk-taking, and performance of Islamic banks
spellingShingle The governance, risk-taking, and performance of Islamic banks
Sabur Mollah
title_short The governance, risk-taking, and performance of Islamic banks
title_full The governance, risk-taking, and performance of Islamic banks
title_fullStr The governance, risk-taking, and performance of Islamic banks
title_full_unstemmed The governance, risk-taking, and performance of Islamic banks
title_sort The governance, risk-taking, and performance of Islamic banks
author_id_str_mv 7bf64278ced3687f26a4b5d73dd4696c
author_id_fullname_str_mv 7bf64278ced3687f26a4b5d73dd4696c_***_Sabur Mollah
author Sabur Mollah
author2 Sabur Mollah
M. Kabir Hassan
Omar Al Farooque
Asma Mobarek
format Journal article
container_title Journal of Financial Services Research
container_volume 51
container_issue 2
container_start_page 195
publishDate 2016
institution Swansea University
issn 0920-8550
1573-0735
doi_str_mv 10.1007/s10693-016-0245-2
college_str Faculty of Humanities and Social Sciences
hierarchytype
hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance
document_store_str 1
active_str 0
description We examine whether the difference in governance structures influences the risk taking and performance of Islamic banks compared to conventional banks. Using a sample of 52 Islamic banks and 104 conventional banks in 14 countries for the period from 2005 to 2013, we conclude that the governance structure in Islamic banks plays a crucial role in risk taking as well as financial performance that is distinct from conventional banks. Particularly, we show that the governance structure in Islamic banks allows them to take higher risks and achieve better performance because of product complexities and transaction mechanisms. However, Islamic banks maintain a higher capitalization compared to conventional banks. These results support the research on Islamic investment and risk taking. Our results add a new dimension to the governance research that could be a valuable source of knowledge for policy makers and regulators in the financial services sector.
published_date 2016-12-31T03:48:22Z
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score 11.012678

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