Capital Structure and Shari'ah Compliance of non-Financial Firms (De Gruyter Studies in Islamic Economics, Finance and Business 9) (2021. XVIII, 384 S. 40 b/w ill., 106 b/w tbl. 240 mm)

In the present financial world, various niche markets play an increasingly important role. One of the fastest-growing niches is, without a doubt, Islamic finance. Indeed, sustainable finance needs constantly evolving innovations, and this book offers valuable insights into Islamic capital structure and Shari'ah equity screening enriching academic discourse.

"In recent years, we have witnessed the emergence of a new generation of academics and professionals specializing in various aspects of Islamic finance as knowledge and practice. This has brought about a new dynamism and also further sophistication. This book is one of such contributions, as it develops knowledge which is then transformed into practice whereby practical impact is also achieved. Being an academic book, it provokes readers' thoughts, offering a critique of the implications of the currently applied Shari'ah screenings methodologies. As a transformative practical piece, by developing an innovative screening ratio, in this book, Dr. Yildirim extends his focus on the risk-sharing based financing hierarchy, covers thoughts and the underlying philosophy, and proposes an Islamic version of a pecking order hierarchy. This framework can be considered the foundation for developing an Islamic capital structure theory. This book will benefit academics, professionals, investors, as well as policymakers working in the Islamic finance industry and would like to explore more." (Professor Dr. Mehmet Asutay, Durham University Business School, UK)

"This book offers, for the first time after the inception of Shari'ah screening methodologies, a groundbreaking new stock screening solution that is comprehensible, practical, and foremost entirely derived from the primary sources of Islam (Qur'an and Sunnah). Congratulations to Dr. Ramazan for his outstanding contribution to Islamic finance and capital markets." (Associate Professor Dr. Ahcene Lahsasna)

"This excellent book is a must-have for all corporate finance students/researchers interested in the theoretical aspect of capital structure and the religious discussion of Shari'ah equity screening. This book should become a companion to those involved in a quantitative research environment and aim to conduct a comparative analysis; an ideal resource for everyone, from Shari'ah scholars to Islamic finance practitioners and beginners to experts." (Professor Dr. M. Kabir Hassan, University of New Orleans, USA)

Table of Contents

Chapter 1: Introduction

Chapter 1.1 Context and Background

Chapter 1.2 Motivation and Objectives

Chapter 1.3 Organization of the Book

Chapter 2: Capital Structure Theories and its Determinants

Chapter 2.1 Introduction

Chapter 2.2 Definition of Capital Structure

Chapter 2.3 Development of Capital Structure Theories

Chapter 2.4 The Trade-Off Theory

Chapter 2.5 The Pecking Order Theory

Chapter 2.6 Capital Structure Determinants

Chapter 2.7 Review of Earlier Capital Structure Studies on Shari'ah Compliant Companies

Chapter 2.8 Conclusion

Chapter 3: Shari'ah Compliant Equities and Capital Structure

Chapter 3.1 Historical Background

Chapter 3.2 Shari'ah Screening Methodology

Chapter 3.3 Critical Comments on Shari'ah Screening Methodology

Chapter 3.4 Proposed Solution for Shari'ah Screening Methodology

Chapter 3.5 Proposed Expected Financing Hierarchy

Chapter 3.4 Conclusion

Chapter 4: Establishing a framework for comparative analysis

Chapter 4.1 Data Selection Procedure/Data Sources and Classification of Datasets

Chapter 4.2 Estimator and Post Estimation Tests

Chapter 4.3 Formulation of Variables

Chapter 4.4 Model Specification and Testing Model

Chapter 4.5 Conclusion

Chapter 5: Cross-Country and Cross-Industry Determinants

Chapter 5.1 Descriptive Summary and Correlation Matrix Analysis

Chapter 5.2 Empirical Results and Analysis

Chapter 5.3 Conclusion

Chapter 6: Testing of Capital Structure Theories

Chapter 6.1 Pecking Order Model

Chapter 6.2 Partial Adjustment Model (Speed of Adjustment)

Chapter 6.3 Conclusion

Chapter 7 Conclusion

Chapter 7.1 Overview and Key Findings

Chapter 7.2 Implications of the Study

Chapter 7.3 Contribution of the Study

Chapter 7.4 Limitations of the Study

Chapter 7.5 Suggestions for Future Research

Dr. Ramazan Yildirim is the Managing Director of Upsite Consulting S.P.C. located in the Kingdom of Bahrain. He has gained entrepreneurial and consulting experiences especially in corporate governance areas, such as Business Process Management (BPM) and Enterprise Risk Management (ERM); followed by strong academic experience in complex research environments. He provides his professional services on a global level (USA, EU and in GCC) to several multinational conglomerates among various industries such as Siemens, SAP, Software AG, SABIC and many more. He received his Ph.D. in Islamic Finance from the International Centre for Education in Islamic Finance (INCEIF), Kuala Lumpur, Malaysia. He studied Business Administration specializing in Computer Sciences at Pforzheim Business School in Germany. He received his MBA in International Management and Marketing from the same university in cooperation with Nanyang Technological University in Singapore. In addition to this, Dr. Ramazan received the Best Paper Award from Pacific-Basin Finance Journal (PBFJ) at the Malaysian Finance Association Conference 2017 for his paper titled "Determinants of Capital Structure: Evidence from Shari'ah Compliant and Non-Compliant Firms". Furthermore, he presented his innovative idea "Shari'ah Screening Methodology: New Shari'ah Compliant Approach" at the 1^st IF Innofest 2016 (Islamic Finance Innovation Festival/Competition) sponsored and organized by the Central Bank of Malaysia (Bank Negara) and INCEIF respectively, where he received the 1^st Prize for his Idea Pitch (Exhibitor). Dr. Ramazan has authored and reviewed in international journals such as in Pacific-Basin Finance Journal (PBFJ), Journal of Islamic Economics, Banking and Finance (JIEBF), Thunderbird International Business Review (TIBR, Wiley), ISRA International Journal of Islamic Finance (IJIF), International Journal of Islamic and Middle Eastern Finance and Management (IMEFM), International Journal of Islamic Economics and Finance Studies (IJISEF) as well as in book chapters such as in Emerald International Finance Review (IFR), etc. His research interests are in the areas of (but not limited to) Corporate Finance, Corporate Governance, Capital Markets and Portfolio Management, with applied Econometric methods in both Islamic and Conventional Finance.