Open AccessThe Impact of Political Stability and Firm-Specific Variables on the Performance of Islamic Banks in Pakistan
Author(s) -
Ali Burhan Khan Et al.
Publication year - 2021
Publication title -
psychology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.112
H-Index - 10
ISSN - 0033-3077
DOI - 10.17762/pae.v58i2.2322
Subject(s) - islam , leverage (statistics) , market liquidity , political stability , politics , financial stability , monetary economics , financial system , business , accounting , economics , political science , geography , law , statistics , mathematics , archaeology
Financial sector of a country plays pivotal role in the economic advancement. Therefore, the aim of this study is to analyze the performance determinants of 5 Islamic banks in Pakistan which remain active from year 2006 to 2018. By applying the Random Effect Model (REM), this study concluded that leverage and size of Islamic banks contributed significantly towards their performance. However, Islamic banks’ performance remained unaffected with respect to change in political stability level and liquidity. Therefore, this study has implication for Islamic banks managers that instead of considering political environment of Pakistan, focus should be made on bank specific matters.