11 research outputs found
Perceptions and Predictions of Service Quality-Customer Satisfaction of Conventional and Islamic Banks in the GCC Region
Purpose - The purpose of this paper is to investigate differences in the perceived relationship of service quality (SERVQUAL)-customer satisfaction between conventional and Islamic banks in the Gulf Council of Arab Countries (GCC) region which appears to be lacking such an investigation.
Design/methodology/approach – The authors solicited survey responses from bank clients in all six countries of the region. They used data reliability tests followed by factor analysis to shortlist individual items of SERVQUAL to few manageable constructs. Nonparametric ranking tests were used to identify the importance constructs affecting customer satisfaction. A nonparametric multiple linear regression was employed to model causal effects.
Findings - The results indicate that the two types of banks were associated with different SERVQUAL drivers as perceived by banks customers. Determinants, of overall satisfaction for the two types, also proved to be different.
Research limitations/implications – Despite the important contribution of the paper to a region lacking a SERVQUAL comparative study on conventional versus Islamic banking, a similar investigation, with additional variables and more responses, at the global level would provide a better understanding of the subject.
Practical implications – As firm value is associated with customer satisfaction, banks managers should, whether conventional or Islamic, pay attention to the details of each construct proved to be a predictor of customer satisfaction.
Originality/value – The value of this research is in the wider geographical region comprising the highest number of Islamic banks and conventional in operation. It is also one of the few studies employing nonparametric multiple linear regression to model causal relationship in this area of research. 
Effects of the Global Financial Crisis on the Agency Cost of Islamic Banks and Conventional Banks
In this paper, we investigate the effect of the 2008 global financial crisis on the agency cost (AC) of Islamic banks (IBs) and conventional banks (CBs). Many pioneering scholars (see, for example, Archer et al., 1998) have recognized fundamental differences in the capital structures and risks of IBs compared to CBs and called for more empirical testing of these issues. This effort is in response to those calls. Focusing on AC, we collected data for all Gulf Cooperation Council (GCC) banks satisfying the period from 2001-2014. The data was split into “before” and “after” the 2008 crisis. Although statistically insignificant, the analysis shows higher AC for IB compared to CBs before and after the crisis. However, we provide evidence of significant differences in AC causal models for the two types of banks. For conventional banks, only profitability factors explain variability in AC before and after the crisis. For Islamic banks, however, in addition to profitability, liquidity, deposits and financing facilities matter depending on the status of the economy. We provide further discussions, implications, and recommendations
Effect of market and corporate reforms on firm performance: evidence from Kuwait
Following the global financial crisis in 2008, many countries have introduced economic and corporate reforms to assure fair markets and mitigate the risk of management misconduct. In this context, Kuwait has implemented two new major laws to restructure its capital markets and improve corporate governance. The two laws ere the Capital Market Authority Law (CMAL) and Kuwait Companies Law (KCL). In this paper, the authors sought answers to two questions: (1) has the performance of the listed companies changed in response to the enforcement of the laws? and (2) was there a direct influence of the laws on that change? The authors found some evidence of significant change in performance. Moreover, they provide evidence of KCL viability as a determinant of better performance. Interestingly, CMAL was found to be inadequate for improving firm performance. Implications and recommendations for further research are provided
Stakeholders' Perceptions and Predictions of Stock Exchange Demutualization: The Case of Kuwait Stock Exchange
In this paper, we investigate the perceptions of various stakeholders in relation to the benefits stated in the new capital markets authority law (CMAL) to be achieved when Kuwait Stock Exchange (KSE) is demutualized. We use a survey questionnaire to solicit their agreement on the achievement of specific benefits after six years of activation. Factor analysis was used to extract four new constructs from the collected responses. Market harmony is the construct elected to be the independent variable affecting three dependent variables: stability, corporate governance and attractiveness variables. The results indicate that the different stakeholders have the same perception that privatization of KSE will lead to the achievement of all benefits promised. Furthermore, all three dependent variable are found to be significantly affected by market harmony. These results contradict with the results of an earlier study of the same research project on the relationship between firm performance and market reforms. We provide discussions of the results and further implications.
Keywords: Stock exchange demutualization, corporate governance, market reforms, factor analysis
JEL Classifications: G10, G18, G2
Dynamic association between technological advancement, green finance, energy efficiency and sustainable development: evidence from Vietnam
GHG emissions growth of Vietnam is highest all over the globe and
the carbon intensity of this economy is considered second highest
in Asian economies. As the energy intensity level is rising constantly,
thereby, the predictions indicate that Vietnam will become
highest GHG emission in the region. In order to address the issue,
the current article aims to investigate the impact of green finance,
technology advancement, energy efficiency, industrialization, and
population growth on sustainable development in Vietnamese context.
The time chosen for the study is 1991 to 2020. The study has
used the Dynamic Auto-regressive Distributed Lags (DARDL) and
the Bayesian Auto-regressive Distributed Lags (BARDL) model for
data analysis. Findings exposed that green finance, technology
advancement, REO, REC, industrialization, and population growth
all are positively connected with sustainable development. The
study guides the regulators in establishing regulations related to
sustainable development through the adoption of green finance,
energy, and technolog
The nexus between COVID-19 fear and stock market volatility
This study described an empirical link between COVID-19 fear and
stock market volatility. Studying COVID-19 fear with stock market
volatility is crucial for planning adequate portfolio diversification
in international financial markets. The study used AR (1) – GARCH
(1,1) to measure stock market volatility associated with the
COVID-19 pandemic. Our findings suggest that COVID-19 fear is
the ultimate cause driving public attention and stock market volatility. The results demonstrate that stock market performance and
GDP growth decreased significantly through average increases
during the pandemic. Further, with a 1% increase in COVID-19
cases, the stock return and GDP decreased by 0.8%, 0.56%,
respectively. However, GDP growth demonstrated a slight movement with stock exchange. Moreover, public attention to the attitude of buying or selling was highly dependent on the COVID-19
pandemic reported cases index, death index, and global fear
index. Consequently, investment in the gold market, rather than
in the stock market, is recommended. The study also suggests
policy implications for key stakeholders
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Efficiency and client satisfaction of Islamic and conventional banks: A bilateral effect
In this paper, we investigate the possible bidirectional causal relationship between bank efficiency and client satisfaction in the banking sector of Kuwait. For this purpose, we applied structural equation model (SEM) methodology. Based on a 5-point Likert scale questionnaire, data was gathered from Islamic banks (IBs) clients and conventional banks (CBs) client. We found a significant evidence of a, relatively, higher client satisfaction for IBs. The findings, also, provide evidence of a positive and significant bilateral causal relationship between client satisfaction and bank efficiency. This is a result that confirms an anticipated theoretical proposition related to the ultimate goal of firm value maximization. Discussions, interpretations, implications, and recommendations are provided
Dividend policy as a multi-purpose mechanism; the case of conventional and Islamic banks before and after the 2008 crisis
Dividend policy and its association to firm value is still a concern for researchers. Empirical research provided evidence that it is relevant in various forms including signaling, pecking order, and agency. The aim of this study is to investigate the dividend policy of Islamic banks versus conventional banks in response to a major financial crisis. By studying the mixed banking industry of the Gulf Cooperation Council countries, known for negligible taxation systems, we provide evidence that conventional and Islamic banks use dividend payouts as a multi-purpose mechanism. At times of economic prosperity, conventional banks use them as signaling and pecking-order instruments, while it is used as an agency problem protection instrument during downturns. For Islamic banks, however, dividend policy is a pecking order mechanism before and after the crisis. Discussions on theoretical and empirical implications are provided