Utilization of Research in Decision-Making by Islamic Banks Administrators : A Case of Commodity Murabaha

Khalil Mohammed Khalil and Zurina Shafii (Universiti Sains Islam Malaysia)



There has been a growing concern about the gap between research and practice in disipline of Islamic finance. Siddiqi (2006) argued that the practice of Islamic finance significantly departs from its theory. He claimed that the gap was created as the theory of Islamic banking is still not very well developed and the practice has focused on a few credit- based instruments. This paper investigates the perception of practitioners on their research utilization in relation to the application of commodity murabaha. To gather data and answers for the studyquestions, a survey developed by Lovett(2003) was modified and used.The revised 54- item Likert scale survey was electronically mailed to 364 administrators of Islamic banks worldwide. A total of 96 usable standard deviation were calculated for each survey item. Analysis using t-test and ANOVA’s were conducted for each of the variables posed in the questions. Result of the study revealed that administrators of Islamic banks have a positive attitute towards research and its value in the area of commodity murabaha. Administrators of Islamic banks believe that research was an important and useful tool to develop the area of commodity murabaha. They believe that new technology made it easier to locate, access and quickly find useful research and that research brings about change in Islamic finance in the future. They admit that increased accountability makes them spend more resourses on research- based practices, and forces them to look for practical applications of research. The study, furthermore, revealed that the most significant barries to research utilization are lack of practical application of research,lack of time to pursue research,difficult mannerof writing research and complex presentation of research findings


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