Aljughaiman, Abdullah and Salama, Aly and Verousis, Thanos (2023) Corporate Governance, Shari’ah Governance and Financial Flexibility: Evidence from the MENA region. International Journal of Finance and Economics. DOI https://doi.org/10.1002/ijfe.2878
Aljughaiman, Abdullah and Salama, Aly and Verousis, Thanos (2023) Corporate Governance, Shari’ah Governance and Financial Flexibility: Evidence from the MENA region. International Journal of Finance and Economics. DOI https://doi.org/10.1002/ijfe.2878
Aljughaiman, Abdullah and Salama, Aly and Verousis, Thanos (2023) Corporate Governance, Shari’ah Governance and Financial Flexibility: Evidence from the MENA region. International Journal of Finance and Economics. DOI https://doi.org/10.1002/ijfe.2878
Abstract
This article investigates the relationship between corporate governance structures and financial flexibility for conventional and Islamic banks in the Middle East and North Africa (MENA) region. We construct a novel financial flexibility index (FFI) for the banking sector and examine the impact of the Shari'ah supervisory board (SSB), board size, and risk governance on financial flexibility. We find that board size and risk governance significantly affect banks' financial flexibility for Islamic and conventional banks. However, Shari'ah governance rules determine how that relationship is manifested in Islamic banks. We show that SSB size and busy SSBs enhance Islamic banks' financial flexibility. Our results show that Western corporate governance structures may lead to suboptimal financial flexibility. Banking policies should re-evaluate the impact of one-size-fits-all approaches to corporate governance while promoting ‘soft policies’ to banking regulation that are value-enhancing for the banking sector.
Item Type: | Article |
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Uncontrolled Keywords: | corporate governance, financial flexibility, Islamic banking, MENA region, Shari'ah governance |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Essex Business School |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 22 Sep 2023 12:17 |
Last Modified: | 16 May 2024 21:57 |
URI: | http://repository.essex.ac.uk/id/eprint/36113 |
Available files
Filename: Int J Fin Econ - 2023 - Aljughaiman.pdf
Licence: Creative Commons: Attribution 4.0