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The Impact of Governance Mechanisms on Profitability of Islamic Banks in the GCC Countries During 2005-2016 أثر آليات الحوكمة على ربحية المصارف الإسلامية في دول مجلس التعاون الخليجي خلال الفترة 2005م - 2016م

Author

Listed:
  • Abdulhadi Abdulrahim Tashkandi

    (Islamic Economics, Umm al-Qura University, Makkah, Saudi Arabia)

Abstract

This study aims to explore the impact of applying the governance mechanisms on the profitability of Islamic banks in the GCC countries. The sample of the study is based on twenty-four full-fledged Islamic banks over the period from 2005 to 2016 in five GCC countries. The study utilizes a dynamic panel model that allows for persistence in bank profitability, and estimate the model using the Generalized Methods of Moment (GMM) estimator. Return on assets and return on equity have been used as alternative measures of bank profitability. The results of the research suggest there is a strong relationship between the variables of governance and profitability of Islamic banks. It was found that the number of members of the Sharīʿah board positively affects bank profitability, while the size of the Board of Directors and the number of independent members of the Board of Directors negatively affect bank profitability. Furthermore, the results showed that the size of the bank, the capital adequacy ratio, cash liquidity and interest rate were positive determinants of the profitability of Islamic banks. تهدف الدراسة إلى بيان أثر آليات الحوكمة على ربحية المصارف الإسلامية بدول مجلس التعاون الخليجي. واعتمدت الدراسة على عينة مكونة من 24 مصرفًا إسلاميًا في خمس دول من دول مجلس التعاون الخليجي خلال الفترة 2005م-2016م، من خلال تحليل نموذج بيانات السلاسل الزمنية المقطعية الديناميكي باستخدام طريقة العزوم المعممة “Generalized Methods of Moment” ((GMM System، وقد تم استخدام مقياسين للتعبير عن الربحية هما: العائد على الأصول، والعائد على حقوق الملكية. أظهرت نتائج الدراسة وجود علاقة قوية بين متغيرات الحوكمة والربحية للمصارف الإسلامية بدول مجلس التعاون الخليجي؛ حيث وجدت أن عدد أعضاء الهيئة الشرعية تؤثر إيجابًا على ربحية المصارف الإسلامية، بينما نجد أن كلاً من حجم مجلس الإدارة وعدد الأعضاء المستقلين في مجلس الإدارة تؤثر سلبًا على الربحية، كما أظهرت النتائج أن كلاً من حجم المصرف ونسبة كفاية رأس المال والسيولة النقدية ومعدل الفائدة تمثل محددات إيجابية مؤثرة على ربحية المصارف الإسلامية.

Suggested Citation

  • Abdulhadi Abdulrahim Tashkandi, 2019. "The Impact of Governance Mechanisms on Profitability of Islamic Banks in the GCC Countries During 2005-2016 أثر آليات الحوكمة على ربحية المصارف الإسلامية في دول مجلس التعاون الخليجي خلال الفترة 2005م ," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 32(3), pages 163-190, October.
    • Handle: RePEc:abd:kauiea:v:32:y:2019:i:3:no:10:p:163-190
    DOI: 10.4197/Islec.32-3.10
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    References listed on IDEAS

    as
    1. Chaouki Bourakba & Abdelhalim Gherbi, 2015. "The Impact of the Application of Corporate Governance Rules on the Performance of Islamic Banks: Evidence from the GCC Region أثر تطبيق قواعد حوكمـة الشركات في أداء المصـارف الإسلاميـة: حالة دول منطقة," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 28(3), pages 123-158, October.
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      Keywords

      Corporate Governance; Sharīʿah Governance; Profitability; Islamic Banks; GCC. حوكمة الشركات، الحوكمة الشرعية، الربحية، المصارف الإسلامية، دول مجلس التعاون الخليجي.;
      All these keywords.

      JEL classification:

      • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
      • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
      • G3 - Financial Economics - - Corporate Finance and Governance
      • P43 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Finance; Public Finance

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