Journal of King Abdulaziz University: Islamic Economics

The Economic Contributions of Awqāf in Türkiye

Ozan Maraşlı, Monzer Kahf — Wed, 18 Sep 2024 00:00:00 +0000

Waqf holds profound significance, extending beyond its economic role, rooted in the
concept of qurbah—seeking closeness to Allah Ta’ālā. It embodies perpetual worship ('ibādah)
dedicated to serving the needy and virtuous causes while maintaining a vital nexus with the
economy as a charitable endeavor for producing added value. This study descriptively explores
this nexus by analyzing the Turkish awqāf sector and its economic contributions. In Türkiye, the
awqāf SECTOR comprises fused (mazbût), annexed (mülhak), new (yeni), community (cemaat),
and state awqāf, along with corporate awqāf, waqf universities, and waqf healthcare institutions.
Fused and annexed awqāf represent the Ottoman waqf tradition, while state awqāf redistribute the
government revenue sources by providing aid to the poor and disadvantaged. Community awqāf,
apart from their hospitals, have limited contributions. New awqāf represent contemporary models
with diverse revenue sources, making the most substantial contribution to the Turkish economy.
Turkish awqāf play a significant role in providing public services, notably in higher education,
industrial manufacturing (especially for defense sector), research and development, healthcare,
and social assistance, primarily through corporate awqāf and waqf universities. As a result, they
foster economic growth by expanding capital stock and investments while aiming to improve
income distribution and the welfare of the poor.

Hālal Investment Sensitivity to Cash Flow and the Effects of Capital Market Imperfections

MOHAMED ABOUELSEOUD — Wed, 18 Sep 2024 00:00:00 +0000

This paper examines the relationship between hālal investment sensitivity and cash flow,
as well as the impact of capital market imperfections on investment sensitivity in ṣukūk -dependent
companies versus conventional enterprises in six countries: Saudi Arabia, the United Arab Emirates,
Kuwait, Qatar, Bahrain, and Malaysia. The research is based on panel data from 240 non-financially
listed conventional and Islamic enterprises from 2018 to 2022. The study incorporates both analytical
and econometric approaches. Stationarity, co-integration, and multivariate Granger-Causality tests
are carried out using the estimated equations. The study finds that there are considerable distinctions
between ṣukūk -dependent firms and traditional enterprises. At the 5% significance level, both
groups' investment expenditures responded significantly to cash flow. But hālal investment rises by
$0.14 for ṣukūk -dependent companies, whereas conventional investment climbs by $0.17 for
conventional businesses when current cash flow rises by $1. Market capital imperfections, as
assessed by four factors, have a significant effect on hālal investment cash flow sensitivity. The
sensitivity of hālal investments to cash flows diminishes when fund flows, analyst following,
institutional ownership, and the corporate governance index increase. Finally, the Grnagel causality
tests confirm the study's alternative hypotheses. There is a bidirectional causal relationship between
hālal investment and cash flow, while there is a unidirectional relationship from capital market
imperfections to hālal investment-cash flow sensitivity.

Empowering Women in Pakistan's Agriculture: Rethinking Sharecropping, Education, and Rural Dynamics

Sahibzada Muhammad Hamza, Nasim Shah Shirazi — Wed, 18 Sep 2024 00:00:00 +0000

This study examines the impact of sharecropping agricultural structures on women's
empowerment in Pakistan, utilizing data from the Pakistan Social and Living Standard Survey (PSLM)
across three-time cohorts: 2010-2011, 2014-2015, and 2019-2020. Employing a comprehensive
empirical model and the Heckman two-step approach to address potential sample selection bias, we
analyze a sample of 315,835 respondents. Contrary to initial expectations, our findings reveal that
participation in sharecropping does not have a statistically significant impact on women's empowerment,
as measured by female employment. However, the study identifies several other crucial determinants of
empowerment. Education consistently demonstrates a positive and significant relationship with
empowerment, reinforcing its vital role in enhancing women's status. Surprisingly, rural residence shows
a strong positive effect on empowerment, challenging assumptions about urban areas offering more
opportunities for women. Ethnicity emerges as a significant factor, with non-minority (Punjabi) women
showing higher levels of empowerment. An unexpected finding is the positive association between being
female and empowerment in the combined model of both genders, suggesting potential gains for women
who overcome barriers to economic participation. These results have important implications for policy,
highlighting the need for continued focus on education, targeted rural development programs, and
interventions that increase women's control over resources in the agricultural sector. The study
contributes to the broader understanding of the complex interplay between agricultural practices, socioeconomic
factors, and women's empowerment in developing nations, while also identifying areas for
future research, including the need for more nuanced, multidimensional measures of empowerment and
longitudinal studies to establish causal relationships.

Examining the Adoptability of Cryptocurrency in the Islamic Financial System: Perspectives from Sharīʿah Scholars

Samina Naz — Wed, 18 Sep 2024 00:00:00 +0000

This study explores the adoptability of cryptocurrency within the Islamic
financial system, a topic of substantial debate among scholars and practitioners. Given the
decentralized nature of cryptocurrency, its acceptance within the conventional and Islamic
financial systems presents unique challenges. To ascertain the legitimacy and possible
adoptability of cryptocurrency under Sharīʿah law, this paper employs qualitative research
methods, using in-depth interviews of twenty-four Sharīʿah scholars. These scholars,
selected through purposive and snowball sampling techniques, possess expert knowledge
of both cryptocurrency and the Islamic financial system. The results revealed that the
acceptability of cryptocurrency in Sharīʿah-compliant financial systems is contingent on
its centralization and its function as a store of value, aligning with the objectives (maqasid)
of Sharīʿah. Cryptocurrency's lack of intrinsic value necessitates its backing by a central
authority or asset to mitigate risks and potential fraud. This research offers valuable
insights into the considerations required for cryptocurrencies' adoption in Islamic finance,
contributing to the ongoing debate on their legitimacy under Sharīʿah law.