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(ProQuest: ... denotes formula omitted.)1.INTRODUCTIONSince its inception in 1975, Islamic banking and finance has grown unabatedly and it is now considered as one of the fastest growing segments in the field of finance. According to the World Islamic Banking Competitiveness Report, Islamic banking is growing at the rate of 15% to 20% per annum globally with assets held by Islamic banks are set to exceed USD2 trillion in 2013 (Nazim & Bennie, 2012). Islamic finance has increasingly carved out a significant slice of the global financial market (Mallin, Farag, & Ow-Yong, 2014). It has become systemically important in many markets and too big to ignored in others i.e. Europe and the Americas (Nawaz, 2013, 2015).Given the robust growth of Islamic finance industry and its resilience during the financial crisis, has attracted the attention of many research intellectuals. An emerging body of literature has attempted to identify and examine distinct features of Islamic banking and finance. The aspects investigated are but not limited to asset quality (Beck, Demirguc-Kunt, & Merrouche, 2013), stability (Cihak & Hesse, 2010; Hasan & Dridi, 2010), efficiency (Bourkhis & Nabi, 2013; Majid, Saal, & Battisti, 2010), valuation (Elnahass, Izzeldin, & Abdelsalam, 2014), risk (Abedifar, Molyneux, & Tarazi, 2013), relationship banking (Ongena & §endeniz-Yuncu, 2011), mutual funds (Abdelsalam, Fethi, Matallin, & TortosaAusina, 2014), mortgage loans (Ebrahim, 2009) and other risk dimensions such as loan default rates (Baele, Farooq, & Ongena, 2014; Khan, 2010). The foregoing empirical literature posit for the sound financial health of Islamic finance industry (Nawaz, 2017) and reports an upward trend in the growth of total assets held by the Islamic banks (Beck et al., 2013; Hasan & Dridi, 2010; Johnes, Izzeldin, & Pappas, 2014).While the afore cited studies are clearly important but they have examined the effects of tangible or financial assets on bank performance and paid little attention to the investigation of how financial intermediaries exploit their intangible resources (i.e. intellectual capital), which helps an organization to maintain its profitability and sustain competitive advantage in the market. IC is highly significant to Islamic banks (IBs) because the whole phenomenon of Islamic banking is based on the Shariah law, an intangible ideology. Therefore, knowing how intangible aspects (i.e. IC) affect IBs' performance, is of paramount importance.In chorus, the empirical evidence also suggests that the recent financial crisis is to a large extent attributable to lax governance in the banking sector. Kashyap, Rajan, and Stein (2008), for instance, reasons that firms' risk management and financing policies are ultimately the outcome of cost-benefit trade-offs made by governing bodies, suggesting that corporate governance have had impact on firm performance during the financial crisis (Erkens, Hung, & Matos, 2012). Equally, academics and policymakers have also emphasized that flaws in bank governance played a key role in the performance of banks during the crisis (e.g., Bebchuk & Spamann, 2009; Diamond & Rajan, 2009). Governance features especially, Shariah governance is a distinguishing feature of Islamic banking in determining IBs' performance. However, the empirical evidence on the said matter is limited and shallow.Against this back ground the main purpose of this paper is to analyse the impact of intellectual capital and Shariah governance on the accounting- and market-based performance of Islamic banks in the pre- and post-financial crisis period.2.BACKGROUND2.1.Financial crisis and Islamic bankingLed by the intensity of the recent financial crisis, academics and policy makers have expressed concerns about the merits of laissez-faire capitalism and flawlessness of the centuries old orthodox banking model (Chen et al. …

INTELLECTUAL CAPITAL, FINANCIAL CRISIS AND PERFORMANCE OF ISLAMIC BANKS: DOES SHARIAH GOVERNANCE MATTER?