 The Effect of Applying Sustainability (Maqasid Shariah) and Competition on Islamic Bank FinancingSustainability, 2023, vol. 15, issue 17, 1-18 Abstract: In the last decade, the Islamic Bank (IB) has been contributing to global financial development. There are inconclusive results about the function of IB to meet Islamic Finance ethics, particularly sustainability from the IB perspective (called Maqasid Shariah-MS). This paper aims to contribute to the basic research question: does sustainability matter in improving competition in IB financing? This study developed an advanced empirical model from previous theoretical studies that separated IB behavior using MS or less MS. To distinguish this effect, this study employed causal inference with Instrumental Variable (IV) analysis. The IV-Probit was applied to conduct a simulated treatment effect analysis accordingly. The dataset was obtained and combined from two global IB sustainability indicators and comprehensive financial statements of IB across 35 banks in 12 countries. The results confirm that applying IB in different MS with similar increasing level of competition produce different growth of financing. The IB with MS has larger financing than less MS. These results confirm that sustainability matters for improving competition and financing growth. Keywords: Maqasid shariah; mathematical model; instrumental variable probit; islamic bank sustainability; global data (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:15:y:2023:i:17:p:12994-:d:1227794 Access Statistics for this article Sustainability is currently edited by Ms. Alexandra Wu More articles in Sustainability from MDPI |
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