Purpose

This paper aims to determine the effect of equity financing on bank stability during normal and crisis periods.

Design/methodology/approach

This study uses a static panel regression that includes pooled ordinary least square, random effect and fixed effect model to examine the influence of equity financing on bank stability. In estimating bank stability during a financial crisis, the authors predict the occurrence of a crisis using the early warning system (EWS). The authors then used z-score to measure Islamic banks’ stability.

Findings

Islamic banks that offer equity financing structure are more stable compared to Islamic banks without such structure. Islamic banks with medium equity financing have highest stability relative to Islamic banks with high or low equity financing. During crises, the Islamic banks with equity financing structure remain relatively stable compared to other Islamic banks.

Research limitations/implications

The sampling coverage could have included a larger number of countries and banks.

Practical implications

The authorities need to strengthen the banking framework to support the Islamic financial products by encouraging a wider use of risk-sharing instruments. Besides using a debt-like financing structure, Islamic banks should also place emphasis on equity financing in instilling the banking sector stability. In monitoring banks with equity financing, the authorities may need to look into the level of equity financing.

Social implications

Besides avoiding riba and gharar in financing, equity financing encourages cooperation and participation among society as they share the risks.

Originality/value

This paper analyses the effect of equity financing on the Islamic banks stability during normal and crisis periods. This paper further examines the intensity of the equity financing and its influence on bank stability.

中文翻译：

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股权融资和伊斯兰银行稳定性：来自马来西亚和印度尼西亚的证据

目的

本文旨在确定正常时期和危机时期股权融资对银行稳定性的影响。

设计/方法论/途径

本研究采用静态面板回归（包括汇总普通最小二乘、随机效应和固定效应模型）来检验股权融资对银行稳定性的影响。在评估金融危机期间银行的稳定性时，作者使用预警系统（EWS）预测危机的发生。然后作者使用 z 分数来衡量伊斯兰银行的稳定性。

发现

与没有这种结构的伊斯兰银行相比，提供股权融资结构的伊斯兰银行更加稳定。相对于高或低股权融资的伊斯兰银行，中等股权融资的伊斯兰银行具有最高的稳定性。在危机期间，与其他伊斯兰银行相比，股权融资结构的伊斯兰银行保持相对稳定。

研究局限性/影响

抽样覆盖范围可能包括更多的国家和银行。

实际影响

当局需要通过鼓励更广泛地使用风险分担工具来加强银行框架以支持伊斯兰金融产品。除了使用类似债务的融资结构外，伊斯兰银行还应重视股权融资，以增强银行业的稳定性。在监管股权融资银行时，当局可能需要调查股权融资水平。

社会影响

股权融资除了避免融资中的利巴和加拉尔外，还鼓励社会合作和参与，共担风险。

原创性/价值

本文分析了正常时期和危机时期股权融资对伊斯兰银行稳定性的影响。本文进一步考察了股权融资的强度及其对银行稳定性的影响。