Abstract:
Purpose Â The purpose of this paper is to examine the different motivational factors that lead to customers' Islamic bank selection decision in Pakistan. In particular, it aims to look into the importance of Shari'a compliance for Islamic banks' customers and thereby the potential risk of deposits withdrawal in case of violations of Shari'a principles. Design/methodology/approach Â The paper presents descriptive statistics and cross-tabulation analysis based on data collected from 357 customers. Findings Â The findings reveal that Islamic banks' customers highly value Shari'a compliance in their banks and that non-compliance with Shari'a principles leads to disgruntled customers. An interesting pronouncement is that if an Islamic bank is involved in repeated violations of Shari'a, the customers are inclined to switch their banks. Nonetheless, the findings reveal that Shari'a compliance is not the only satisfaction yardstick for Islamic banks' customers; they also expect their banks to be convenient, technologically advanced and provide security of their capital. Practical implications Â The paper has profound implications for Islamic financial institutions operating in Pakistan. Although Shari'a compliance is the most important factor that Islamic banks need to observe, they also need to be competitive with conventional banks. Originality/value Â The paper is a unique contribution to Islamic banks' selection criteria where the importance of Shari'a compliance and conventional bank patronage factors has been explored. The paper's has practical implications for Islamic banks' owners and regulators.

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Saudi Arabia's economic development: entrepreneurship as a strategy : Table of Contents

July 22, 2011, 4:21 am

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Abstract:
Purpose Â The purpose of this paper is to critically review some of the existing literature relevant to Saudi Arabia's quest for development in order to build the argument for the viability of entrepreneurship to Saudi Arabia's development process. Design/methodology/approach Â The method employed in this study is a combination of critical examination of existing literature and the authors' personal experience with the developmental and entrepreneurial process. Findings Â The successive five-year developmental plans failed to include an entrepreneurship sector, thus failing to address the most pressing unemployment problem facing the economy. Research limitations/implications Â The authors critically examined the issue of Saudi Arabia's economic development using secondary data coupled with field experience of the authors. This is a case study, so it did not employ any empirical analysis. Practical implications Â The findings of this paper will reinforce the importance of entrepreneurship as a diversification strategy among the policy-making bodies in Saudi Arabia. Although Saudi Arabia advocates the policy of development maintaining Islamic values, the paper makes a case that such Islamic values should be implemented fully to achieve socio-economic justice. Originality/value Â The paper comprises derived research based on country analysis coupled with the authors' practical experience with Saudi Arabia's economic development and entrepreneurial activities. It is original in the sense that the authors provide reasoned interpretations of Saudi Arabia's economic development and the role that an entrepreneurial sector can play in achieving balanced socio-economic justice.

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Multiple approaches in performance assessment of UAE commercial banks : Table of Contents

July 22, 2011, 4:21 am

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Abstract:
Purpose Â The purpose of this paper is to assess performance factors in the UAE commercial banks by using multiple approaches taking into consideration the effect of the bank size. Design/methodology/approach Â The UAE banking sector is divided, for the purpose of this research, into two groups: large and small based on the total assets. The last balance sheet has been used for size classification; those with total assets of AED10 billion and above are considered large banks, whereas banks with total assets less than AED10 billion are considered small banks. This classification criteria led to a sample of 15 large and 23 small banks. The number of banks included in this study is only 38 banks due to the scarcity of available information. Data for the study cover the period from 1996 to 2005. Findings Â The main findings of this study indicate that generally large banks perform better than small banks. The results partially confirmed the hypothesis that there is a positive and significant statistical difference between the small and large banks regarding bank performance indicators. Finally, the results reveal that the ratio of total equity to total assets, which reflect the importance of capital adequacy to commercial banks, is the most important performance indicator taking into account the bank size. In other words, it was the determinative factor in the classification of banks into large or small ones. Practical implications Â The paper's findings support the proposition that in an environment where banks are highly fragmented, mostly small, and are not performing well, there is a need to consolidate the operations of some of these banks. That is, small banks, and even large ones, might be better off, if they are merged into one major institution in order to reduce waste and improve efficiency. Originality/value Â The paper will be of value to UAE banks and those interested in investment in the UAE financial markets.

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Service quality models in banking: a review : Table of Contents

July 22, 2011, 4:21 am

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Abstract:
Purpose Â The purpose of this paper is to appraise various service quality models and identify issues for future research based on the analysis of literature. Design/methodology/approach Â The paper examines 14 different service quality models reported in the literature applicable to the banking sector. The critical review of the different service quality models is intended to compile the various dimensions which emerged out of the studies, compare the commonality between them, study their relevance and importance in banking in the various cultural and cultural contexts and highlight the limitations of the studies. Findings Â The review of various service quality models in banking revealed that the meaning of service quality may have some universal aspects, as demonstrated by the similarities in the underlying dimensions as proposed in the different studies. This paper lends support to the contention that the dimensionality of SERVQUAL and importance of the dimensions vary with the cultural and country context even within the banking industry. Research limitations/implications Â This paper comprises a compiled report on the different service quality models and the effect of application of SERVQUAL in banking in different countries. Practical implications Â Service quality has some common dimensions across the different models, however, the items involved and their operationalization in different cultural contexts within the same banking sector may vary. The paper indicates that a generic instrument for measurement of service quality or even one specifically developed for banking may not be applicable in its original form for all cultural contexts including Islamic society and banks. Development of the customized scale for measuring the service quality for a particular cultural or country context at that particular time is warranted. This paper brings a lot of information on service quality in banking under one roof and provides new directions to service quality researchers. Originality/value Â This paper offers practical help to researchers and practitioners in providing a direction for service quality improvement by indicating the common theme that emerges from the service quality models. Also, the differences in the relevance and importance of the dimensions, due to the change in the cultural and country contexts, have been brought to the forefront.

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The financial performance of Saudi Arabian IPOs : Table of Contents

July 22, 2011, 4:21 am

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Abstract:
Purpose Â The main objective of this paper is to measure Saudi Arabian initial public offerings' (IPOs) financial performance before and after going public on the Saudi Stock Exchange Market. The paper also aims to explore factors associated with the financial performance variation between pre- and post-IPO. Design/methodology/approach Â A sample of 16 Saudi IPOs is investigated. A matched pairs methodology is mainly used combined with regression analysis. Findings Â Saudi IPOs exhibit a significant decline in the post-IPO performance compared to the pre-IPO level as measured by the return on assets and return on sales. It was also found that the performance deterioration is associated with the IPO event. Originality/value Â The paper is the first assessment of IPOs clustering occurred in Saudi Arabia.

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