Hasan Mukhibad, FEB Akuntansi (2023) Equity-based financing and risk in Islamic banks: A cross-country analysis. Cogent Economics & Finance. ISSN 2332-2039

	PDF - Published Version Download (1MB)
	PDF - Published Version Download (1MB)
	PDF - Published Version Download (4MB)
	PDF - Published Version Download (2MB)

Abstract

Equity-based financing (EBF) is an Islamic bank (IB) financing type that promotes justice, spirituality, and Islamic values. However, data shows that IBs still have low EBF. The researcher noted that with EBF, there is information asymmetry, agency problems and the potential for moral hazards, meaning EBF may be a risky type of transaction. This study aims to empirically show whether EBF is a risky transaction by looking at the role of EBF in non-performing financing (NPF), the z-score, and the return on average assets (ROAA). The research sample consisted of 54 IBs from 19 countries, with an observation period of 11 years (2009 to 2019). This study finds that EBF has a positive effect on NPF and does not affect the z-score and ROAA. The subsample test shows that EBF is riskier for large IBs than for small IBs. EBF has a positive effect on NPF and a negative one on ROAA for large IBs. In

Actions (login required)

View Item