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Impact of Family Involvement on the Bank Risk Taking Behavior: Evidence from Islamic Countries

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Book cover Proceedings of the Twelfth International Conference on Management Science and Engineering Management (ICMSEM 2018)

Part of the book series: Lecture Notes on Multidisciplinary Industrial Engineering ((LNMUINEN))

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Abstract

The study aims to investigate the impact of family involvement, measured by two dimensions: family involvement in ownership (FIO) and family involvement in (FIM) on risk taking behavior (RTB) of financial institutions. The study analyses RTB of family owned banks in three Islamic countries (Turkey, Malaysia and Pakistan) over the period of 2009 to 2016. The data are collected from twenty family owned banking institutions from the said countries i.e. four banks from Turkey, four banks from Malaysia and five banks from Pakistan. FIO (FIM) shows positive (negative) impact on banks’ risk taking behavior. In Turkey, increasing 1% in FIO (FIM) might incline (decline) RTB by 3.3 (14.2) percent. In Malaysia, adding 1% in FIO (FIM) causes 5.4 (4.2) percent inclination (reduction) in RTB. In Pakistan, 1% increase in FIO (FIM) causes 4.4 (6.0) percent increase (decrease) in RTB. The study supports the agency theory as well as corporate governance’s separation of ownership and control theorem. The study recommends increasing FIO and decreasing FIM in family owned banks.

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Author information

Authors and Affiliations

  1. Lyallpur Business School, Government College University, Faisalabad, Pakistan

    Safdar Husain Tahir, Nabeeha Ghafoor & Muhammad Rizwan Ullah

  2. Department of Psychology, Lahore Garrison University, Lahore, Pakistan

    Gulzar Ahmad

  3. Management Sciences, National University of Modern Languages, Swabi, Pakistan

    Aijaz Mustafa Hashmi

Authors
  1. Safdar Husain Tahir
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  2. Gulzar Ahmad
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  3. Nabeeha Ghafoor
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  4. Muhammad Rizwan Ullah
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  5. Aijaz Mustafa Hashmi
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Corresponding author

Correspondence to Safdar Husain Tahir .

Editor information

Editors and Affiliations

  1. Sichuan University, Chengdu, China

    Jiuping Xu

  2. Monash University, Department of Management, Melbourne, VIC, Australia

    Fang Lee Cooke

  3. Fuzzy Logic Systems Institute, Tokyo University of Science, Tokyo, Japan

    Mitsuo Gen

  4. Department of Mathematics and Statistics, McMaster University, Hamilton, ON, Canada

    Syed Ejaz Ahmed

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Tahir, S.H., Ahmad, G., Ghafoor, N., Ullah, M.R., Hashmi, A.M. (2019). Impact of Family Involvement on the Bank Risk Taking Behavior: Evidence from Islamic Countries. In: Xu, J., Cooke, F., Gen, M., Ahmed, S. (eds) Proceedings of the Twelfth International Conference on Management Science and Engineering Management. ICMSEM 2018. Lecture Notes on Multidisciplinary Industrial Engineering. Springer, Cham. https://doi.org/10.1007/978-3-319-93351-1_4

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