IDEAS home Printed from https://ideas.repec.org/a/eme/jmlcpp/jmlc-09-2021-0094.html
   My bibliography  Save this article

Do Islamic banks gain from corruption and money laundering (ML)?

Author

Listed:
  • Kinza Aish
  • M. Kabir Hassan
  • Qamar Uz Zaman
  • Sadaf Ehsan
  • Khurram Abbas
  • Ijaz Hussain Shah

Abstract

Purpose - This paper aims to examine the impact of corruption and money laundering (ML) on the profitability and stability of Islamic banks. Design/methodology/approach - This study used the data of 53 conventional and 19 Islamic banks of Pakistan and Malaysia to have comparative insights. The empirical methods include the fixed effect and random effect regression and generalized methods of moment for robust results. Findings - The results indicate that Islamic banks gain from corruption and ML. Corruption and ML affect bank profitability and stability positively in a less corrupt environment, i.e. Malaysia; however, corruption hurts Islamic banks’ performance, and ML favours Islamic banking profitability and stability in a more corrupt environment, i.e. Pakistan. Originality/value - The present study pioneers the debate on corruption and ML related to Islamic banking profitability and stability. This study provides important insights to regulators and Shariah advisors to build a real model of Islamic banking.

Suggested Citation

  • Kinza Aish & M. Kabir Hassan & Qamar Uz Zaman & Sadaf Ehsan & Khurram Abbas & Ijaz Hussain Shah, 2021. "Do Islamic banks gain from corruption and money laundering (ML)?," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 25(4), pages 909-929, October.
    • Handle: RePEc:eme:jmlcpp:jmlc-09-2021-0094
    DOI: 10.1108/JMLC-09-2021-0094
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/JMLC-09-2021-0094/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/JMLC-09-2021-0094/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/JMLC-09-2021-0094?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Money laundering; Islamic banking; Banking stability; Corruption; Banking profitability; C33; G2; G21; G28;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • G2 - Financial Economics - - Financial Institutions and Services
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:jmlcpp:jmlc-09-2021-0094. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.