IIUM Repository

Capital structure of Islamic banks: a critical review of theoretical and empirical research

Sakti, Muhammad Rizky Prima and Tareq, Mohamad Ali and Saiti, Buerhan and Akhtar, Tahir (2017) Capital structure of Islamic banks: a critical review of theoretical and empirical research. Qualitative Research in Financial Markets, 9 (3). pp. 292-308. ISSN 1755-4179 E-ISSN 1755-4187

[img] PDF - Published Version
Restricted to Repository staff only

Download (204kB) | Request a copy
PDF (Scopus) - Supplemental Material
Download (572kB) | Preview


Purpose – This paper critically evaluates theoretical and empirical research into capital structure practices in Islamic banks (IB) from four perspectives, namely: i) theoretical aspect and its nature, ii) determinants of capital structure in IB, iii) links between capital structure and risk management, and iv) nexus between capital structure and performance of IB. Design/methodology/approach – The authors will review and examine past studies on IB capital structure from both theoretical and empirical research. Findings – The paper concludes that most of the literature on IB capital structure is largely theoretical rather than empirical. The existing studies on IB capital structure have various limitations, which suggest a need for detailed empirical work. Detailed empirical research in the field of capital structure will support bank managers and policy makers in making decisions about improving capital structure. Originality/value – Our research will make several noteworthy contributions to address literature gaps for IB capital structure. Furthermore, this paper will identify areas for future research into capital structure practices and IB financing decisions. Lastly, this paper will equip regulators with guidelines for establishing sound capital requirements for IB.

Item Type: Article (Journal)
Additional Information: 7451/57133
Uncontrolled Keywords: Capital structure, Islamic banks, critical review
Subjects: H Social Sciences > HG Finance > HG1501 Banking
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): Institute of Islamic Banking & Finance (IIiBF)
Date Deposited: 02 Jun 2017 15:49
Last Modified: 16 Apr 2018 08:55
URI: http://irep.iium.edu.my/id/eprint/57133

Actions (login required)

View Item View Item


Downloads per month over past year