Islamic Investment Financing and Commercial Banks Facilities: Mediation Effect of the Islamic Bank Size




Commercial Banking, Commercial Bank Facilities, Islamic Banking, Islamic Finance, Size


Purpose: The objective of this study was to investigate the effect of Islamic financing on commercial banks’ credit facilities tested under the mediation of the two variables of Islamic bank size (Total asset and Investment deposit).

Theoretical Framework: Even though studies of Islamic banking funding have been done within the Islamic economics and finance context, there has been needed to explore the effect of mediating the size of the Islamic bank and the relationship between Islamic financing and commercial banks’ credit facilities.

Design/Methodology/Approach: We used the methodologies of Baron and Kenny (1986) and Preacher and Hayes (2008) to test a mediation effect of the Islamic bank size variable. Regarding the testing and validity of the hypothetical research model, path analysis was used within the structural equation modeling analysis. The study sample consists of 16 commercial and Islamic banks in the Jordanian banking sector, it is comprehensive of all listed banks' data in the Amman stock exchange, to the possibility of fairly generalizing the results to the community.

Finding: Results indicate that the two variables of size indicators may partially mediate the direct effect of Islamic financing on commercial banks’ credit facilities. Such an effect is statistically significant. The findings provide practical solutions to enhancing competition in the Jordanian commercial and Islamic banking services market through various Islamic financing services to maintain and sustain banking resources.

Research, Practical & Social implications: Future studies can consider other indicators of Islamic bank size and assess their influence on the various dimensions of the relationship between Islamic funding methodology and commercial bank facilities

Implications/Originality/Value:  This study contributes to the literature on Islamic banking by analyzing the results of the effect of Islamic investment financing formulas on the commercial credit market in Jordanian banking, and it offers a practical and applied perception of the role played of the Islamic banking methodology in the Jordanian commercial credit market.



Download data is not yet available.


Abbas, F., Ali, S., Yousaf, I., & Wong, W. (2022). Economics of Risk-Taking, Risk-Based Capital, and Profitability: Empirical Evidence of Islamic Banks. Asian Academic of Management Journal of Accounting & Finance. 18 (1).

Abdal-Majeed, A., Al-Smadi, A., Hamdan, F., & Almsafir, M. (2013). Islamic Banking Vs. Conventional Banking, During The Global Financial Crisis: Malaysia as A Case. Journal of Islamic and Human Advanced Research. 3 (1), 27-40.

Abdullah, R. (2021). Study of the experience of the National Bank of Saudi Arabia in the field of transition from traditional banking to Islamic banking. Research Journal, 6 (1), 241-261.

Abu Muhaimid, M. M. (2008). The Islamic Finance and Investment Instruments risks and its impact on capital Adequacy for the Islamic Banks According to Basel II, Unpublished thesis, College of Banking and Financial Sciences. The Arab Academy for Banking and Financial Sciences.

Agler, R., & Boeck, P. (2017). On the Interpretation and Use of Mediation: Multiple Perspectives on Mediation Analysis. Frontiers in Psychology, 8, 1-11. DOI: 10.3389/fpsyg.2017.01984.

Ahmed, R., & Maimon, M. (2018). Measuring the Efficiency of Islamic and Traditional Banks in the Arab World: A Case Study Sample of the Top 10 Banks for 2013, Journal of Economic and Financial Research. 5(2), 423-448.

Al-amed, M. (2020). The impact of credit facilities on banks' profitability: applied study on Jordanian commercial banks for the period (2008-2018), IUG Journal of Economics and Business Studies. 28 (4), 174-190.

Al-Fawwaz, T., & Al-Rawashdah, O. (2019). Credit Risk Management in Islamic and Conventional Banks. Journal of Law and Human Sciences - Economic Studies. 19 (2), 72-90.

Al-Fawwaz, T., Daoud, H., & Arabiyat, Y. (2016). Credit Risk Management in Islamic and Conventional Banks in Jordan, Jordan Journal of Business Administration, 12 (2), 289-305.

Al-Quraishi, M., & Abdul Karim, M. (2012). Islamic Banks and the impact of the Global Financial Crisis.Iraqi Journal of Economic Sciences. 10 (32), 43-62.

Al-Rqeebat, G., & Al-Fawwaz, T. (2016). The Impact of Interest Rates on Size of the Credit Facilities and Deposits in Jordanian Commercial Banks (1985-2014). Dirasat: Administrative Sciences. 43 (2), 801-812.

Amman Stock Exchange, (2021).

Arbuckle, J. (2008). Amos 17.0 user's guide. SPSS Inc.

Ariss, R.T. (2010). Competitive conditions in Islamic and conventional banking: A global perspective. Review of Financial Economics. 19 (3), 101–108.

Azouz, A. (2018). The Use of Structural Equation Modeling in Social Sciences. Journal of Humanities and Social Sciences. 15 (1), 287-322.

Badawi, M. (2016). Modeling by structural equations and their applications in marketing research. Algerian Review of Economic Development. 5, 21-36.

Baron, R. M., & Kenny, D.A. (1986). The Moderator-Mediator Variable Distinction in Social Psychological Research, Conceptual, Strategic, and Statistical Considerations. Journal of Personality and Social Psychology. 51 (6), 1173-1182. 0022-3514/86/$00.75.

Belkaid, K., & Abdelkader, Q. (2018). Estimating the efficiency of the leading Arab Islamic banks compared to their conventional counterparts in the face of contemporary challenges during the period (2005-2015). International Journal of El-Maqrizi for Economic and Financial Studies. 2 (1), 19-45.

Bitar, M., Pukthuanthong, K., & Walker, T. (2019). Efficiency in Islamic vs. conventional banking: The role of capital and liquidity. Global Finance Journal. 19, DOI: 10.1016/j.gfj.2019.100487.

Dang, C., Li, Z. F., & Yang, C. (2015), Measuring firm size in empirical corporate finance, Journal of Banking and Finance, Forthcoming pp:1-57. DOI: 10.2139/ssrn.2345506.

Demming, C.L., Boztug, Y., & Jahn, S. (2017). Conducting Mediation Analysis in Marketing Research. Marketing ZFP- journal of research and management. 39 (3), 76–93. DOI: 10.15358/0344-1369-2017-3-76.

El-Beltagy, M. (2005). A Proposed Model for Measuring Risk in Islamic Banking. Journal of Economic Studies. 13 (1), 1-32.

Gujrati, D., Porter, D., & Gunasekar, S. (2012). Basic Econometrics (5thed.). New Delhi, ND. McGraw Hill education.

Hair. F., Sarstedt, J., Hopkins, L., & Kuppelwieser, V. (2014). Partial least squares structural equation modeling (PLS-SEM) is an emerging tool in business research. European Business Review. 26 (2), 106-121.

Hamiltona, R., Qasrawib, B. W., & Al-Jarrah, I. M. (2010). Cost and Profit Efficiency in the Jordan Banking Sector 1993-2006, A parametric Approach. International Research Journal of Finance and Economics. Issue 56, 96-110.

Hayes, A.F., & Rockwood, N.J. (2020). Conditional Process Analysis: Concepts, Computation, and Advances in the Modeling of the Contingencies of Mechanisms. American Behavioral Scientist. 64 (1), 19–54. DOI: 10.1177/0002764219859633.

Hellmann, T. F., Murdock, K. C., & Stiglitz, J. E. (2000). Liberalization, moral hazard in banking, and prudential regulation: Are capital requirements enough? The American Economic Review. 90 (1), 147-165. DOI: 10.1257/aer.90.1.147.

Hilkevics, S., & Semakina, V. (2019). The classification and comparison of business ratios analysis methods. Insights into Regional Development. 1 (1), 48-57.

Hox, J., & Bechger, T. (2014). An Introduction to Structural Equation Modeling. Family Science Review. 11, 354-373.

Hoyle, R. H. (1995). The structural equation modeling approach: Basic concepts and fundamental issues. In Structural equation modeling: Concepts, issues, and applications. Thousand Oaks, CA: Sage Publications, 1-15.

Humairoh, S., & Usman, H. (2016). Competition of Islamic Bank in Indonesia. Journal of Distribution Science. 14 (6), 39-44.

Islamic Finance Development Indicator (IFDI). (2018). Islamic Finance Development (IFD) Report 2018.

Isnurhadi, I., Adam, M., Sulastri, S., Andriana, I., & Muizzuddin, M. (2021). Bank Capital, Efficiency and Risk: Evidence from Islamic Banks. Journal of Asian Finance, Economics and Business. 8 (1), 841–850. DOI: 10.13106/jafeb.2021.vol8.no1.841.

Karagoz, Y. (2016). SPSS ve AMOS 23 Uygulamalı Istatistiksel Analizler. Ankara: Nobel.

Kumar, A., Channa, K., & Maharive, M. (2018). Work to Family Enrichment as Mediator between Organizational Support and Employees Performance. Pakistan Journal of Commerce and Social Sciences. 12 (2), 638-650.

Latif, D., & Attia, T. (2020). Determinants of credit facilities in Iraqi commercial banks (2010-2019). Journal of Financial, Accounting, and Administrative Studies. 7 (1), 157-175.

Lewis, M. (2007). Islamic Banking in Theory and Practice, Monash Business Review, 3 (1), 1-8.

Mater, A. (2017). Evaluating the Performance of Islamic and Commercial Banks in Jordan: A Comparative study. Jordan Journal of Economic Sciences. 4 (1), 57-75.

Mezo, P., & Short, M. (2012). Construct validity and confirmatory factor analysis of the Self-Control and Self-Management Scale. Canadian Journal of Behavioral Science. 44 (1), 1-8.

Mohammed, W. (2012). Financial Intermediation in Islamic Banks: An Applied Research in the Iraqi Islamic Bank (for Investment and Development). Al-Ustath Journal, Issue 201, 833-847.

Ocarina, F., & Mariam, A. (2021). Islamic Bank Efficiency in Indonesia: Stochastic Frontier Analysis. Journal of Asian Finance, Economics, and Business. 8(1), 751–758.

Pratomo, W.A., & Ismail, A.G. (2006). Islamic bank performance and capital structure. Munich Personal RePEc Archive Paper. No. 6012. University Library of Munich, Germany.

Preacher, K., & Hayes, A. (2004). SPSS and SAS procedures for estimating indirect effects in simple mediation models. Behavior Research Methods, Instruments, & Computers. 36 (4), 717-731.

Preacher, K., & Hayes, A. (2008). Asymptotic and resampling strategies for assessing and comparing indirect effects in multiple mediator models. Behavior Research Methods. 40 (3), 879-891.

Rahim, R. (2016). Does Competition Foster Efficiency? Empirical Evidence from Malaysian Commercial Banks. ASIAN ACADEMY of MANAGEMENT JOURNAL of ACCOUNTING & FINANCE. 12 (1), 1–23.

Ramlee, Sh., & Ghazali, N. (2006). Interest Rates Uncertainty, Immediacy Cost and The Role of Banks. ASIAN ACADEMY of MANAGEMENT JOURNAL of ACCOUNTING and FINANCE. 2 (2), 61–74.

Risfandy, T., Tarazi, A., & Trinugroho, I. (2020). Competition in dual markets: Implications for banking system stability. Global Finance Journal.

Sahraoui, A., & Bouselb, A. (2016). Constructivism and the processing of real standardization in the psychological and educational researches: the study of global construction model of relations of competencies of the administrative management in the educational institution. Journal of Psychological and Educational Sciences. 3 (2), 61-91.

Samarin, M. (2011). A Perspective on Islamic Banks (Problems, Obstacles, Ambitions, and Future Vision). International Conference on Islamic Banks. Higher Institute of Islamic Studies. Al al-Bayt University. Jordan.

Schermelleh-Engel, K., Moosbrugger, H., & Müller, H. (2003). Evaluating the Fit of Structural Equation Models: Tests of Significance and Descriptive Goodness-of-Fit Measures. Methods of Psychological Research. 8 (2), 23-74.

Talebnia, G., Valipour, H., & Shafiee, S. (2010). Empirical Study of the Relationship between Ownership Structure and Firm Performance: Some Evidence of Listed Companies in Tehran Stock Exchange. Journal of Sustainable Development. 3 (2). 264-270.

Turnes, P., & Ernst, R. (2015). Strategies to Measure Direct and Indirect Effects in Multi-Mediator Models. China-USA Business Review. 14 (10), 504-514. DOI: 10.17265/1537-1514/2015.10.003

Venardos, A. M. (2006). Islamic banking and finance in south-east Asia: its development and future (2nd edition) (Asia-Pacific Business) Paperback – October 30. Wspc.

Zaho, X., Lyndh, J., & Chen, O. (2010) Reconsidering Baron and Kenny: Myths and Truths about Mediation Analysis. Journal of Consumer Research. 37, 197-206.

Zariyawati, M., Annuar, M., & Pui-San, N. (2016). Working Capital Management Determinants of Small and Large Firms in Malaysia. International Journal of Economics & Management. 10 (2), 365-377.




How to Cite

Altameemi , A. F. ., & Al-Slehat, Z. A. F. . (2022). Islamic Investment Financing and Commercial Banks Facilities: Mediation Effect of the Islamic Bank Size. International Journal of Professional Business Review, 7(4), e0458.