Corporate Governance and Credit Rating: Evidence of Shariah Governance from Pakistani Islamic Banks

Qaiser Ali Malik; Nazima Ellahi; Muhammad Mansoor

Abstract:

Shariah Governance in Islamic banks is the most essential characteristics which differentiates Islamic banking from conventional banking. The study objective is to confirm that not only corporate governance attributes but Shariah board attributes also affect credit rating in Islamic banks. The study collects the data for the period 2013-2017 of Pakistan Islamic banks and develops the three different models. This study used Long term credit rating scale used by Ashbaugh-Skaife, Collins, and LaFond (2006). The study used ordered logit Model which results shows long term credit rating is associated with governance attributes and Shariah board attributes. The study concluded that Credit rating agencies in Pakistan i.e. PACRA and JC-VIS and other International Credit rating must give weightage to Shariah governance attributes in the evaluation of credit rating procedure.

research from:

• Foundation University - Faculty of Management Sciences

Year:

2019

Type of Publication:

Article

Journal:

International Transaction Journal of Engineering, Management and Applied Sciences & Technologies.

Volume:

10

Number:

18

Month:

9