Labuan e-Journal of Muamalat and Society (LJMS)

SOCIALLY SUSTAINABLE LUXURY SUPPLY CHAINS: A CONCEPTUAL REVIEW

Alesia Sigang Gugkang — 2024-10-30

The luxury supply chains are called to realign their focus from a sustainability point of view. Affluent consumers are called for product visibility to ensure transparency is mainly on social inclusion. However, on-going debates are known in sustainability initiatives due to the complexity and uncertainty of standard guidelines and what counts as a successful or excellent implementation. Since luxury is a much visible industry that attracts public attraction on their association with the increase of social inequality between the richest and the poorest in the country - hence, this paper offers both a conceptual review and a research agenda – towards advancing this field of study and bridging the gap between existing research and future research. In conclusion, we propose three areas of future research on: (i) enablers and challenges, (ii) the role of stakeholders and (iii) how luxury organisations cope with institutional complexities of implementing social sustainability.

THE ASYMMETRIC IMPACT OF REAL EFFECTIVE EXCHANGE RATE, REAL OIL PRICE AND REAL GOLD PRICE ON REAL STOCK PRICES IN SELECTED EAST ASIAN ECONOMIES

Wong Hock Tsen — 2024-10-30

This study examines the impact of the real effective exchange rate, the real oil price and the real gold price on the real stock prices in selected economies, namely Hong Kong, Taiwan and Japan, using a nonlinear autoregressive distributed lag (NARDL) model. This study uses quarterly data from 2003 quarter 1 to 2023 quarter 4. The NARDL results indicate that the positive and negative shocks to the real effective exchange rate, the real oil price and the real gold price have different effects on the real stock prices in the long-run and short-run. Additionally, other factors such as real money supply, real gross domestic product and the Shanghai Stock Exchange significantly influence stock prices in the short-run. Moreover, this study found that major events, including the global financial crisis of 2007-2009 and the coronavirus disease of 2020-2023, can impact stock prices in the short-run. The analysis employing the cumulative dynamic multiplier reveals distinctive trends in the responses of the real effective exchange rate, real oil price and real gold price on real stock prices, providing valuable insights for risk management strategies, particularly in hedging against market fluctuations. This study contributes to a deeper understanding of macroeconomic influences on stock prices and offers practical implications for investors and policymakers navigating the complexities of financial markets in evolving economic landscapes.

UNDERSTANDING THE EFFICIENCY OF SUKUK INDICES: THE ROLE OF THE GARCH-IN-MEAN MODEL IN DIFFERENT SUKUK RATINGS

Syazwani Abd Rahim — 2024-10-30

Significant developments have occurred in the sukuk market in the Islamic capital markets. The deterioration of the economic situation during the 2008 global financial crisis affected the value of sukuk investment, particularly in the world's largest sukuk market, Malaysia. Following the 2008 crisis, the global decline in the issuance of sukuk has resulted in a 33 per cent decline in the total number of sukuk, creating a complex situation for sukuk investors, as sukuk are classified as risks and ultimately increase the number of sukuk that fail. The importance of the sukuk as the key capital market instrument of the Islamic Capital Market can be ascertained from this IIFM Sukuk report, where the global outstanding Sukuk in 2022 were USD 0.794 trillion or 24.43% of the total net worth of the industry. High volatility affects long-term effectiveness. The higher the volatility during the crisis (as a risk estimate), the greater is the likelihood of Sukuk's default. This study examined the efficiency of the Ukrainian market using daily historical price data from 2006 to 2015 and extracted some of the UK indices of different ratings DJSUK3AT, DJSUK2AT, DJSUK1AT, and DJSUK3BT from the Bloomberg database (excluding Saturdays and Sundays). The research uses the GARCH-in-Mean (GARCH-M) model to identify the types of efficiency of the sukuk market. The highest quality and excellence ratings (AAAs) for DJSUK3AT and DJSUK2AT have been recognised as the best market indicators based on market efficiency analysis. Generally, the sukuk market is considered inefficient, which should raise concerns among investors and issuers. Therefore, the efficiency of the sukuk market research is essential, as it can serve as an indicator for determining the best situation for investing and issuing sukuk. The empirical contribution of the study highlights the importance of sukuk for encouraging investors to invest in sukuk, which ultimately leads to economic growth and investment.

MANAGERIAL OWNERSHIP AND TAX AVOIDANCE IN INDONESIA

Millicent Bernice — 2024-10-30

Tax avoidance is a scheme designed to reduce the tax liability of an individual or entity by avoiding the payment of taxes. Tax avoidance, in contrast, involves the transfer of transactions that are not subject to taxation. This study intends to investigate the impact of debt policy, audit committee, and company size on tax avoidance, and to investigate whether managerial ownership exerts a moderating influence on the relationship between these three variables. This study implemented quantitative data with a purposive sampling technique, and obtained 32 observation data from 8 companies of information between 2019 and 2022 Indonesia Stock Exchange financial statements of real estate and property enterprises. A methodology for analysing data is Structural Equation Modelling (SEM), which uses the SmartPLS application. The novelty of this study is to add managerial ownership as a moderating variable on tax avoidance and test the data using regression analysis with the PLS approach. The percentage of a company's shares that the management owns is known as managerial ownership. Ownership by managers pushes them to exercise greater caution when making choices that may directly affect the business and their interests as shareholders. Lowering the amount of tax evasion is important for reduced personal interests. This study's findings show that managerial ownership can moderate the effect of debt policy on tax avoidance. At the same time, Debt Policy, Audit Committee, and Company Size do not affect Tax Avoidance, and Managerial Ownership is unable to moderate the effect of Audit Committee and Company Size on Tax Avoidance.

EMPOWERING URBAN AGRICULTURE: A SUSTAINABLE MODEL OF AQUAPONIC WAQF

Mohamad Isa Abd Jalil — 2024-10-30

This conceptual paper introduces a waqf model for an aquaponic system aimed at enhancing food security for urban residents, particularly those in flats or apartment housing in Malaysia, which still relies on foreign countries for key food commodities like rice, fruits, dairy, and beef. The proposed model, designed to be simple and adaptable, is in its initial stages and requires validation by experts in Islamic finance and food security. The study outlines the purpose of creating a base model that can be improved and customized to meet various needs, with the hope that it will significantly impact food security practices through waqf. However, the model's current limitation is its conceptual nature, necessitating further development and validation. The novelty of this approach lies in its integration of aquaponics and waqf to address urban food security challenges.

STRATEGY FOR STRENGTHENING SHARIA BANKING SUPPORT FOR THE HALAL INDUSTRY IN INDONESIA: SWOT ANALYSIS

Azwar — 2024-10-30

Islamic banking is part of the Sharia financial industry sector, which has the potential to support the halal industry. To strengthen Sharia banking's support for developing the halal industry in Indonesia, we need to create the necessary ecosystem and implement strategic policies. This study aims to analyze the strengths, weaknesses, opportunities, and threats, as well as strategies for Islamic banking support for the development of the halal industry in Indonesia. This study uses a mixed-methods approach in the form of a sequential exploratory design with a SWOT analysis technique. The study's findings show that Indonesian Islamic banking's strength lies in relatively good asset growth and performance from year to year, while its main weakness lies in the quality of human resources, which is not as expected. This includes having an adequate number of well-educated, experienced, and ethically sound professionals proficient in essential banking operations and committed to upholding Sharia principles. Meanwhile, Indonesia's halal industry and MSMEs present a significant opportunity for Sharia banking as they continue to grow. However, it also faces a significant challenge in the form of conventional banks' strong presence, which hinders its ability to attract large-scale customers. As a result, it is necessary to strengthen Sharia banking funding and management processes, as well as establish a National Halal Fund.

FACTORS INFLUENCING SUSTAINABILITY INVESTMENT INTENTIONS: AN EMPIRICAL INVESTIGATION

Dzuljastri Abdul Razak — 2024-10-30

This study delves into the determinants of intention for sustainability investment in Malaysia, examining the factors that drive such intentions among 278 Malaysians through a quantitative survey. The research reveals that attitude, subjective norms, perceived behavioural control and financial knowledge have a positive influence on sustainability investment. The findings underscore the pivotal role of attitudes in shaping investment decisions, indicating that a positive attitude toward sustainability correlates with a greater willingness to allocate resources toward sustainable initiatives. Moreover, subjective norms, encompassing social influences and perceived norms, emerged as key drivers, suggesting that when individuals perceive support for sustainability investment from peers and industry leaders, they are more inclined to engage in such activities themselves. Perceived behavioural control, reflecting confidence in one's ability to invest sustainably, is also highlighted as a significant determinant. Individuals and organizations are more likely to invest in sustainability when they feel equipped with the necessary resources, knowledge, skills, and access to opportunities. Furthermore, the study emphasizes the importance of financial knowledge, indicating that individuals and organizations with greater financial literacy are more inclined to engage in sustainable investment practices. Understanding financial concepts enables investors to make informed decisions that align with sustainability goals, contributing to both financial returns and environmental/social objectives. Overall, the study suggests that by fostering positive attitudes, addressing subjective norms, enhancing perceived behavioural control, and promoting financial literacy, Malaysia can create a conducive environment for sustainable investment, nurturing progress toward a more environmentally and socially responsible economy.

REVITALIZING WAQF: A JOURNEY THROUGH ITS RISE, COLLAPSE, AND REFORM

Anwar Allah Pitchay — 2024-10-30

This manuscript delves into the historical evolution, decline, and potential reform of the Waqf system, a pivotal institution in Islamic civilization. Waqf, an Islamic endowment of property to be held in trust and used for charitable or religious purposes, has significantly influenced socio-economic and cultural landscapes in Muslim societies. Beginning with its establishment by Prophet Muhammad (PBUH) and its flourishing during the Umayyad and Abbasid periods, the Waqf system facilitated the development of essential public infrastructure, including mosques, schools, and hospitals. However, the system faced challenges and decline, particularly during colonial rule, which disrupted its management and reduced its effectiveness. This study examines the foundational principles of Waqf, its historical significance, the reasons for its decline, and contemporary efforts to revive and reform Waqf institutions. Through a comprehensive analysis, this manuscript aims to highlight the enduring relevance of Waqf and propose strategies for its revitalization to address modern socio-economic needs.

KERANGKA MODEL ASNAFPRENUER MELALUI DANA ZAKAT DALAM BENTUK PEMBIAYAAN MIKRO DI INSTITUSI ZAKAT KORPORAT

Mohd Faisol Ibrahim — 2024-10-30

The corporatisation of zakat institutions in Malaysia has caused a change in the zakat management system. This change can be seen through the method of zakat collection, the total amount of zakat collection and the method of zakat distribution to the asnaf itself. To help the poor groups and get out of poverty group, zakat institutions that have been corporatized step forward by introducing micro-credit zakat distribution to the asnaf group. This is the innovation of the distribution in the age of Fintech (financial technology) to ensure that zakat distribution is always relevant to the development of the times. This study examines the implementation of microcredit financing by zakat institutions that have been corporatized to asnaf entrepreneurs involving the Lembaga Zakat Selangor (LZS) and Baitulmal of the Federal Territory Islamic Religious Council (MAIWP). The results of the study show that there is a difference in the allocation of zakat distribution through microcredit financing to eligible asnaf. In addition, this study also suggests the development of a microcredit financing model for this asnaf. This study uses field and library research. The innovation of zakat distribution in Malaysia can contribute to improving the small-scale economy in the Muslim community by stimulating a business culture among asnaf.

PEMBIAYAAN QARDHUL HASSAN BERASASKAN WAKAF DI SABAH, MALAYSIA

Putera Aliif Al'Ain Jasni — 2024-10-30

Kajian ini menilai penerimaan pengguna ke atas produk pembiayaan Qardhul Hassan berasaskan wakaf di Sabah, Malaysia. Model kajian ini menggunapakai mekanisma Teori Islam Tingkah Laku Pengguna (Islamic Theory of Consumer Behavior, ITCB). Reka bentuk/metodologi/pendekatan dalam kajian berasaskan kaedah kuantitatif dengan saiz sampel berjulah 845 responden. Aplikasi Statistical Package of Social Science (SPSS) instrumen analisis data yang digunapakai. Pengumpulan data bermula September hingga November 2023. Dapatan keputusan menunjukkan hubungan yang positif dan signifikan pemboleh ubah tidak bersandar (Nilai Maqasid Syariah, Dasar atau Polisi Hutang Islam, Kewajaran Harga dan Keberagamaan) dengan pemboleh ubah tidak bersandar (Penerimaan). Jurang kajian adalah kajian yang dilaksanakan di lima daerah utama di Sabah: Kota Kinabalu, Ranau, Sandakan, Keningau and Tawau. Implikasi praktikal adalah menggunakan pendekatan Model ITCB sebagai asas dalam membina kerangka kajian untuk tujuan kajian ini. Kajian ini sebagai penanda aras dalam usaha pembangunan dan penyelidikan (R&D) Produk Pembiayaan Berasaskan Wakaf Qardhul Hassan kepada Institusi Wakaf di Sabah. Implikasi Sosial dalam analisis penerimaan pengguna Produk Pembiayaan Berasaskan Wakaf di Sabah, Malaysia memberikan maklumat yang amat bernilai berhubung kecenderungan dan persepsi masyarakat Islam di Sabah terhadap amalan wakaf untuk kemudahan produk pembiayaan berasaskan wakaf Qardhul Hassan dalam usaha membangunkan kekuatan aktiviti seperti sektor ekonomi ummah. Ianya boleh digunakan sebagai teori asas untuk kajian masa depan untuk memperteguh hipotesis sedia ada.

SKIM PEMBIAYAAN BANTUAN MODAL UNTUK USAHAWAN ASNAF

Najwa Mohd Khalil — 2024-10-30

Secara umumnya, usahawan asnaf merupakan golongan yang mengalami kesukaran dalam mendapatkan pembiayaan atau pinjaman untuk memulakan atau mengembangkan perniagaan kerana ketiadaan rekod kewangan yang baik. Isu ini telah menyebabkan golongan asnaf terus berada dalam keadaan selesa dengan pergantungan sepenuhnya bantuan kewangan dari institusi zakat untuk membangunkan keperluan ekonomi semasa keluarga. Bagi memastikan agihan dana kewangan kepada golongan asnaf tetap relevan dengan perkembangan semasa, institusi zakat atau institusi kewangan telah memperkenalkan dana zakat atau dana kewangan dalam bentuk skim pembiayaan bantuan modal kepada golongan asnaf. Langkah ini diambil dengan harapan dapat membantu golongan asnaf keluar dari kepompong kemiskinan. Oleh itu, tujuan kertas kerja ini adalah untuk mengenal pasti skim pembiayaan bantuan modal yang ditawarkan untuk usahawan asnaf dalam membantu membangunkan ekonomi usahawan asnaf. Kajian ini menggunakan kaedah penyelidikan kualitatif daripada perspektif sumber data sekunder yang membolehkan maklumat diperoleh dengan memahami dan merungkai pembiayaan untuk usahawan asnaf. Justeru, dapatan menunjukkan bahawa di Malaysia, keusahawanan merupakan satu aktiviti yang signifikan dalam proses membangunkan ekonomi golongan asnaf. Manakala, pembiayaan merujuk kepada penyediaan dana yang disediakan oleh institusi zakat atau institusi kewangan bagi memenuhi keperluan pihak yang mengalami defisit. Pembiayaan ini juga dikenali sebagai dana yang dirancang. Dalam kajian ini, pihak yang mengalami defisit ialah usahawan asnaf. Oleh yang demikian terdapat pembiayaan bantuan modal oleh institusi bukan perbankan, institusi bank, dan institusi zakat ditawarkan kepada usahawan asnaf yang dapat memenuhi keperluan ekonomi mereka.