Research on Islamic Banking in Malaysia: A Guide for Future Directions

Abstract

Although not a near equivalent of conventional banking in terms of size, the global Islamic banking industry has grown at a very rapid pace in the last three decades. Malaysia has been at the forefront of this development since early 1980s and has earned a reputation of a global hub for Islamic banking. Since its inception, much research has been carried out in this area but there is no systematic documentation of research findings in Islamic banking, though much focus has been on aspects of efficiency and performance vis-a-vis the conventional counterparts. This warrants our relooking at the research – both theoretical and empirical – in different areas of Islamic banking in Malaysia, as to provide a road-map for the structured long-term development of the industry in consonance with the country’s global leadership position in Islamic banking. This paper surveys and analyses the published works on Islamic banking in Malaysia with the goals of evaluating their contribution and usefulness to various stakeholders and charting the future directions for research that could sustain Malaysia’s global leadership position in Islamic banking.