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Testing of the Ricardian Equivalence proposition: An Empirical Examination for Malaysia (1962-2006) Ismail, Ismadi; Ismail, Abdul Ghafar; Amiruddin, Rosilawati
Gadjah Mada International Journal of Business Vol 10, No 2 (2008): May - August
Publisher : Master of Management, Faculty of Economics and Business, Universitas Gadjah Mada

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This paper investigates the effects of debts and budgetary deficit on real variables using structural Vector Error Correction Model (VECM) method with long-run restrictions. We compare our estimates of the impulse responses with those based on levels Vector Auto-Regressive (VAR) with standard recursive order restrictions. The test is conducted on the Malaysian data covering the period of 1962-2006. The empirical results do not support the existence of âRicardian Equivalenceâ hypothesis. The effects of budgetary deficit and government spending have a significant influence on private consumption and private investment.

An Empirical Analysis of Cash Flow and Investment Fluctuations Using Firm-Level Panel Data Ismail, Abdul Ghafar; Sanusi, Nur Azura
Gadjah Mada International Journal of Business Vol 7, No 1 (2005): January-April
Publisher : Master of Management, Faculty of Economics and Business, Universitas Gadjah Mada

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Since the pioneering work of Gurley and Shaw (1955), the attempt has been done to justify money as a primary focal point of macroeconomic theorizing. However, other researchers argue that variables such as financial development and indicators are also important to be linked with macroeconomic performance. Here, if money can be thought as means of production and consumer goods as the ultimate end toward which production is directed, and then capital also occupies a position that is both logically and temporarily intermediate between original means and ultimate ends. This temporarily intermediate status of capital is not in serious dispute, but its significance for macroeconomic theorizing is rarely recognized. The firmsâ decision to acquire funds through debt and equity financings affects the capital structure, and, in the firmâs balance sheet, the impact of capital appears to influence the inventory investment. Hence, the significance of capital structure âinduced inventory distortions in the context of firm-level is the basis for our article. The sample for our analysis is compiled from the balance sheets of listed syaria firms in the Kuala Lumpur Stock Exchange for the period 1995-2000.

Monetary Policy, Debt and the Cyclical Behavior of Inventories Ismail, Abdul Ghafar; Bahari, Zakaria
Gadjah Mada International Journal of Business Vol 9, No 1 (2007): January - April
Publisher : Master of Management, Faculty of Economics and Business, Universitas Gadjah Mada

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An earlier study on the determinants of inventories investment has been proposed by Lovel (1961). However, the study fails to mention the effects of financial variables. The puzzle prevails on account of imperfect capital markets. This implies that interest rate generally affects inventory investment indirectly through the debt channel. For instance, in the period of tight monetary policy, increasing interest rates have a negative impact on the present value of firmsâ collateralizable net worth. In addition, they also weaken firmsâ balance sheets as interest expenses also rise up. In imperfect capital markets, this fact indicates an increase in the amount of external financing that firms need, a rise in the premium on external financing that they face, and a reduction in their accumulation of assets, their spending and their production. Given the low adjustment cost that characterizes firms, it will be inventories that firms will initially reduce. Therefore, this paper is contributes to the issue of monetary policy transmission in Malaysia. Our specific attention is limited to the channel of monetary policy on a firmâs inventory. Using micro data, we try to take into account the relevance of the firmâs balance sheet conditions in the transmission of monetary policy.

Incentive Zakat Agency Mechanism, a Comparison between Indonesia and Malaysia Siswantoro, Dodik; Nurzaman, Mohammad Soleh; Nurhayati, Sri; Munandar, Agus; Ismail, Abdul Ghafar
International Journal of Islamic Business and Economics (IJIBEC) Vol 5 No 1 (2021): IJIBEC VOL. 5 NO. 1 JUNE 2021
Publisher : Faculty of Islamic Economics and Business of Institut Agama Islam Negeri (IAIN) Pekalongan

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.28918/ijibec.v5i1.3067

The objective of the research is to compare the incentive zakat agency mechanism between Indonesia and Malaysia. In Indonesia, private institutions are permitted to collect zakat and have the agency to support zakat collection, while in Malaysia only state institution collects zakat. To enhance zakat fund collectability, they need agencies located in specific institutions. However, both countries share a similar mechanism of incentive zakat agency allocation. The method of the research is based on a qualitative study. Some respondents are questioned and interviewed on a specific topic of incentive zakat agency mechanism. The result shows that the agency mechanism in private zakat institutions in Indonesia is more flexible than Malaysia. The agency is authorized to get zakat allocation to be disbursed to surrounding zakat recipients and develop the allocation report. On the other hand, a zakat rebate can be a supporting factor for Muslims to pay zakat more in Malaysia than in Indonesia. This is the first study which compare the incentive zakat agency mechanism between Indonesia and Malaysia. Most of previous research does not investigate and compare the zakat incentive.

Experience-Based Knowledge in Islamic Perspective Sari, Yuli Indah; Mislan Cokrohadisumarto, Widiyanto bin; Fachrunnisa, Olivia; Ismail, Abdul Ghafar
International Journal of Islamic Business and Economics (IJIBEC) Vol 5 No 2 (2021): IJIBEC VOL. 5 NO. 2 DECEMBER 2021
Publisher : Faculty of Islamic Economics and Business of Institut Agama Islam Negeri (IAIN) Pekalongan

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.28918/ijibec.v5i2.2886

The development of technology has created problems regarding challenges and opportunities in utilizing knowledge obtained by humans from various experiences. Experience-based knowledge has been seen as a special advantage for individuals and Islam has a unique way to explain this aspect. This paper aimed to develop an experience-based knowledge model from an Islamic perspective. This study used a qualitative approach based on literature reviews sourced from Al-Qurâ€™an, Al-Hadith, and relevant previous kinds of literature. This study is expected to provide contributions to the development of theories related to experience-based knowledge from an Islamic perspective. The results show that knowledge could be learned and obtained by humans from various experience sources, such as personal experiences, other people's experiences, expertsâ€™ experiences, and experiences said in Al-Qurâ€™an and Al-Hadith. This experience-based knowledge helped individuals improve their abilities and were disseminated to the other individuals for Allahâ€™s blessings and achieving the embraced organizational goals and success.

AN EMPIRICAL INVESTIGATION OF CONSUMPTION BEHAVIOUR IN SELECTED OIC COUNTRIES Shaikh, Salman Ahmed; Ismail, Mohd Adib; Ismail, Abdul Ghafar; Shahimi, Shahida; Mohd. Shafiai, Muhammad Hakimi
Journal of Islamic Monetary Economics and Finance Vol 4 No 1 (2018)
Publisher : Bank Indonesia

This study examines the consumption behaviour in Organization of Islamic Cooperation (OIC) countries. It presents empirical evidence on rational expectations permanent income hypothesis (RE-PIH) and tests whether the phenomena of myopia, liquidity constraints or loss aversion impede forward-looking consumption behaviour. It also attempts to measure the intertemporal elasticity of substitution. The empirical evidence defies the existence of consumption smoothing phenomena as postulated in RE-PIH. The results support loss aversion. The response of consumption to unexpected income changes is statistically significant in only one-third of the countries. In contrast, the response of consumption to expected income changes is statistically as well as economically significant in as many countries. The intertemporal elasticity of substitution is also statistically insignificant in most of the countries and the elasticity is generally not positive. For the Islamic finance industry, the results help in explaining the low penetration of equity-based risk sharing instruments. From the policy perspective, the excess sensitivity of consumption to income suggests that redistribution efforts to enhance incomes of poor could help in enhancing their consumption levels.

ALTERNATIVE OF MONETARY POLICY INDICATOR: PANEL DATA ANALYSIS FROM ISLAMIC BANKS IN MALAYSIA Ahmad, Zuriyati; Ismail, Abdul Ghafar
Journal of Islamic Monetary Economics and Finance Vol 4 No 2 (2018)
Publisher : Bank Indonesia

The monetary policy indicators such as monetary aggregates, interest rates and Monetary Condition Index (MCI) are the traditional monetary policy indicators used in order to obtain early indication of the impact of monetary policy. These indicators could function as appropriate monetary policy indicators that will provide information to the monetary policy makers. The development in Islamic financial system however creates a challenge to find a monetary policy indicator, which is in conformity with Islamic teaching. Therefore, this paper is aimed to examine the future growth of nominal GDP as an alternative variable for monetary policy indicator in Islamic monetary system. The investigation will benefit from data of 17 Islamic banks in Malaysia which implement full fledge or Islamic windows scheme spanning from 2005 to 2010. GMM system method is used to analyze the data in hope to validate the appropriateness of the alternative monetary policy indicator. The result suggests that the future growth of nominal GDP is significant as monetary policy indicator and could be applied by the central bank in implementing the monetary policy especially in the dual banking system.

ETHICS IN FOCUS: A BIBLIOMETRIC AND CONTENT ANALYSIS OF ISLAMIC BANKING AND FINANCE RESEARCH Zahari, Siti Aisyah; Shahimi, Shahida; Alma’amun, Suhaili; Ismail, Abdul Ghafar
Journal of Islamic Monetary Economics and Finance Vol 10 No 2 (2024)
Publisher : Bank Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.21098/jimf.v10i2.1992

This study performs a bibliometric analysis of the literature on ethics in Islamic banking and finance (IBF) in the Scopus database. A total of 366 scholarly articles pertaining to the subject of ethics in IBF are analyzed using VOSviewer, Wordstats, Harzing’s Publish or Perish and Microsoft Excel. The development of the literature on ethics in IBF is outlined in this study, along with a list of the most significant authors, as well as relevant nations, groups, and journal sources. Moreover, the study identifies six major clusters namely, corporate image and customer loyalty of IBF, ethical decision making in IBF, Islamic work ethics, IBF standards and supervisory, ethical products and services of IBF, and maqasid al-shariah and IBF. The findings show an increasing number of citations and documents related to ethics in IBF whereby, the journal of "International Journal of Islamic and Middle Eastern Finance and Management" makes a substantial contribution to the field of ethics in IBF, both in terms of number of articles published and citation counts. The study offers the opportunity for future research to focus on these topics. Acknowledgment This paper is part of the research funded by the Faculty of Economics and Management, Universiti Kebangsaan Malaysia under Geran Inisiatif Penyelidikan (EP-2023-016) entitled "The Policy Framework of Ethical Banking for Malaysian Financial Institutions". We would also like to express our gratitude to the participants and discussants of The 9th International Islamic Monetary Economics and Finance Conference (9th IIMEFC), held on 25th October 2023, who provided valuable insights that significantly contributed to the improvement of the paper.

AN EMPIRICAL INVESTIGATION OF CONSUMPTION BEHAVIOUR IN SELECTED OIC COUNTRIES Shaikh, Salman Ahmed; Ismail, Mohd Adib; Ismail, Abdul Ghafar; Shahimi, Shahida; Mohd. Shafiai, Muhammad Hakimi
Journal of Islamic Monetary Economics and Finance Vol. 4 No. 1 (2018)
Publisher : Bank Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.21098/jimf.v4i1.785

This study examines the consumption behaviour in Organization of Islamic Cooperation (OIC) countries. It presents empirical evidence on rational expectations permanent income hypothesis (RE-PIH) and tests whether the phenomena of myopia, liquidity constraints or loss aversion impede forward-looking consumption behaviour. It also attempts to measure the intertemporal elasticity of substitution. The empirical evidence defies the existence of consumption smoothing phenomena as postulated in RE-PIH. The results support loss aversion. The response of consumption to unexpected income changes is statistically significant in only one-third of the countries. In contrast, the response of consumption to expected income changes is statistically as well as economically significant in as many countries. The intertemporal elasticity of substitution is also statistically insignificant in most of the countries and the elasticity is generally not positive. For the Islamic finance industry, the results help in explaining the low penetration of equity-based risk sharing instruments. From the policy perspective, the excess sensitivity of consumption to income suggests that redistribution efforts to enhance incomes of poor could help in enhancing their consumption levels.

ALTERNATIVE OF MONETARY POLICY INDICATOR: PANEL DATA ANALYSIS FROM ISLAMIC BANKS IN MALAYSIA Ahmad, Zuriyati; Ismail, Abdul Ghafar
Journal of Islamic Monetary Economics and Finance Vol. 4 No. 2 (2018)
Publisher : Bank Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.21098/jimf.v4i2.1017

The monetary policy indicators such as monetary aggregates, interest rates and Monetary Condition Index (MCI) are the traditional monetary policy indicators used in order to obtain early indication of the impact of monetary policy. These indicators could function as appropriate monetary policy indicators that will provide information to the monetary policy makers. The development in Islamic financial system however creates a challenge to find a monetary policy indicator, which is in conformity with Islamic teaching. Therefore, this paper is aimed to examine the future growth of nominal GDP as an alternative variable for monetary policy indicator in Islamic monetary system. The investigation will benefit from data of 17 Islamic banks in Malaysia which implement full fledge or Islamic windows scheme spanning from 2005 to 2010. GMM system method is used to analyze the data in hope to validate the appropriateness of the alternative monetary policy indicator. The result suggests that the future growth of nominal GDP is significant as monetary policy indicator and could be applied by the central bank in implementing the monetary policy especially in the dual banking system.

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