The role of skills in Islamic financial innovation : evidence from Bahrain and Malaysia

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Poon, J., Chow, Y. W., Ewers, M., & Ramli, R. (2020). The role of skills in Islamic financial innovation : evidence from Bahrain and Malaysia. Journal Of Open Innovation : Technology, Market, And Complexity. https://doi.org/doi:10.3390/joitmc6030047
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Description

A body of work has emerged that examines human capital from the perspective of skills to better understand the types of expertise that influence innovation. The relationship between skill and financial innovation, however, is poorly understood in the context of Islamic financial institutions (IFIs). IFIs are distinct from their conventional counterparts by their compliance with Shariah law. Based on a survey of IFIs in Bahrain and Malaysia, this paper examines the effect of different skills on IFI innovation. The findings indicate that while skill in Islamic finance positively influences innovation, skill in Shariah law does not. Cognitive-technical skill is also highly significant, but marketing skill has a negative effect. The results suggest that Islamic financial innovation relies on continuous improvement that sustains markets, product and service innovation. Sustaining innovation lends itself to abilities that are oriented towards problem solving and computation of Shariah and business risks. This favors skills of programming and expertise in Islamic finance over marketing and Shariah legal proficiency.

Details
Title

The role of skills in Islamic financial innovation : evidence from Bahrain and Malaysia

Author(s)

Poon, Jessie
Chow, Yew Wah
Ewers, Michael
Ramli, Razli

UNC Charlotte Affiliate Type

Faculty

Publisher

MDPI

Extent

1 online resource

Date Published

2020

Material Type

Journal article

Genre

articles

Resource Type

text

Abstract

A body of work has emerged that examines human capital from the perspective of skills to better understand the types of expertise that influence innovation. The relationship between skill and financial innovation, however, is poorly understood in the context of Islamic financial institutions (IFIs). IFIs are distinct from their conventional counterparts by their compliance with Shariah law. Based on a survey of IFIs in Bahrain and Malaysia, this paper examines the effect of different skills on IFI innovation. The findings indicate that while skill in Islamic finance positively influences innovation, skill in Shariah law does not. Cognitive-technical skill is also highly significant, but marketing skill has a negative effect. The results suggest that Islamic financial innovation relies on continuous improvement that sustains markets, product and service innovation. Sustaining innovation lends itself to abilities that are oriented towards problem solving and computation of Shariah and business risks. This favors skills of programming and expertise in Islamic finance over marketing and Shariah legal proficiency.

Subjects--Topics

Financial institutions
Finance (Islamic law)

Is Part Of

Journal of open innovation : technology, market, and complexity

Volume

Vol. 6, issue 3

Language

English

Published Version (Please cite this version)

doi:10.3390/joitmc6030047

Publisher's Version

https://www.mdpi.com/2199-8531/6/3/47

Permalink

http://hdl.handle.net/20.500.13093/work:216

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