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Bankruptcy Profile of the Islamic Banking Industry: Evidence from Pakistan

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Listed:
  • Ahmad Ali Jan
  • Muhammad Tahir
  • Fong-Woon Lai
  • Amin Jan
  • Mehreen Mehreen
  • Salaheldin Hamad

Abstract

The purpose of this study is to examine the bankruptcy profile of the Islamic banking industry in Pakistan for the post-crisis period 2007-2008. This study used Altman’s Z-score bankruptcy evaluation model for evaluating bankruptcy rates of the sampled Islamic banks from Pakistan for the post-crisis period 2009-2015. ANOVA result shows the P-value with 0.002, which implies that the sampled Islamic banks from Pakistan do differ in their rates of bankruptcy. Regression results show that the variables liquidity and productivity ratios have a significant positive impact on the bankruptcy profile of the Islamic banking sector in Pakistan. While profitability and insolvency, ratios indicated an insignificant impact on the bankruptcy profile of the Islamic banking industry in Pakistan. The overall analysis of this study is viable to draw the attention of researchers and practitioners towards the deteriorating bankruptcy profile of the Islamic banking sector in Pakistan. The study also persuades the researchers to design a separate Shariah-based bankruptcy evaluation model for the Islamic banking industry of Pakistan.

Suggested Citation

  • Ahmad Ali Jan & Muhammad Tahir & Fong-Woon Lai & Amin Jan & Mehreen Mehreen & Salaheldin Hamad, 2019. "Bankruptcy Profile of the Islamic Banking Industry: Evidence from Pakistan," Business Management and Strategy, Macrothink Institute, vol. 10(2), pages 265-284, December.
    • Handle: RePEc:mth:bmsmti:v:10:y:2019:i:2:p:265-284
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    References listed on IDEAS

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    Cited by:

    1. Salaheldin Hamad & Fong‐Woon Lai & Muhammad Kashif Shad & Zdeňka Konečná & Feybi Ariani Goni & Abdoulmohammad Gholamzadeh Chofreh & Jiří Jaromír Klemeš, 2022. "Corporate governance code and voluntary disclosure of integrated reporting: Evidence from an emerging economy," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(6), pages 1497-1510, December.
    2. Ahmad Ali Jan & Fong-Woon Lai & Muhammad Umar Draz & Muhammad Tahir & Syed Emad Azhar Ali & Muhammad Zahid & Muhammad Kashif Shad, 2022. "Integrating sustainability practices into islamic corporate governance for sustainable firm performance: from the lens of agency and stakeholder theories," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(5), pages 2989-3012, October.
    3. Syed Quaid Ali Shah & Fong-Woon Lai & Muhammad Kashif Shad & Ahmad Ali Jan, 2022. "Developing a Green Governance Framework for the Performance Enhancement of the Oil and Gas Industry," Sustainability, MDPI, vol. 14(7), pages 1-19, March.

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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