Utilizatioan of Research in Decision-Making by Islamic Bank Administrators: A Case of Commodity Murabaha

Abstract

There has been a growing concern about the gap between research and practice in discipline of Islamic Finance. Siddiqi(2006)argued that the practice of Islamic finance significantly depart from its theory. He claim that the gap created as the theory Islamic banking is still not very well developed and the practice has focused on a few credit-based instruments. This paper investigate the perceptions of practitioners on their research utilization in relation to the application of commodity murabaha. To gather data and answers for the study questions, a survey developed by Lovett(2003)was modified and used. The revised 54-item Likert scale survey was electronically mailed to364 administrators of Islamic banks worldwide. A total of 96 usable surveys provided the data used in this study. Percentages, means, and standard deviation were calculated for each survey item. Analysis using t-tests and ANOVAs were conducted for each of the variables posed in the questions. Results of the study revealed that administrators of Islamic banks have a positive attitude 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 resources on research-based practices, and forces them to look for practical applications of research. The study, furthermore, revealed that the most significant barriers to research utilization are lack of practical application of research, lack of time to pursue research, difficult manner of writing research, and complex presentation of research findings.