Determinants of personal bankruptcy, discharge and the role of Islamic social capital: Malaysia and Singapore case

Individuals adjudged bankrupts are financially incapacitated and restrained by the legal system to employment, entrepreneurship opportunities and formal banking credit facilities. A major concern is the increasing number of personal bankruptcy and undischarged bankrupts, mainly due to high household...

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Main Author:	Mohd Isa, Ahmad Mahir
Format:	Thesis
Language:	eng eng
Published:	2022
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/10570/1/s901404_01.pdf https://etd.uum.edu.my/10570/2/s901404_02.pdf
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id	my-uum-etd.10570
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spelling	my-uum-etd.105702023-07-16T01:30:02Z Determinants of personal bankruptcy, discharge and the role of Islamic social capital: Malaysia and Singapore case 2022 Mohd Isa, Ahmad Mahir Ahmad, Nor Hayati Zainol, Zairy Islamic Business School Islamic Business School HG Finance Individuals adjudged bankrupts are financially incapacitated and restrained by the legal system to employment, entrepreneurship opportunities and formal banking credit facilities. A major concern is the increasing number of personal bankruptcy and undischarged bankrupts, mainly due to high household debts. However, past studies mostly focus on a legal approach to tackle this issue. Hence, the main objective of this study is to examine the influence of macroeconomic variables on bankruptcy and discharge in Malaysia and Singapore, which represent developed and developing economies. Gross Domestic Product (GDP), Consumer Price Index (CPI), Interest Rate (IR), Household debt (HD) and Unemployment (UE) were tested on bankruptcy (Model B) and discharge (Model D). Another objective is to assess the effect of integrating an Islamic social capital variable called social-relief-fund (SRF) in the discharge model (Model DIs). This fresh approach is based on the concept of Al-nahd and Ta’awun. The analysis used ARDL and Variance Decomposition on annual time series data over a 20- year (2000-2019) period covering long-run and short-run relationships. The significant factors for Bankruptcy for long-run are IR and HD; CPI and HD for Malaysia and Singapore, respectively. For DIs, SRF is only significant in Malaysia. For short run, CPI is highly significant for Model B, Model D and Model DIs. SRF is highly significant in increasing discharge in the long run. However, it shows a positive effect for Malaysia and negative influence for Singapore. The findings of this study provide new empirical contributions to bankruptcy and discharge literature. Important research implications are two- folds; i) Policy implication, that is, Islamic social finance can be a good social safety net to the financially distressed Muslim and non-Muslim individuals and ii) Practical implication where the debt repayment scheme should be inflation rate-adjusted to account for changes in the macroeconomic environment 2022 Thesis https://etd.uum.edu.my/10570/ https://etd.uum.edu.my/10570/1/s901404_01.pdf text eng 2025-06-15 staffonly https://etd.uum.edu.my/10570/2/s901404_02.pdf text eng 2025-06-15 staffonly phd doctoral Universiti Utara Malaysia
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Ahmad, Nor Hayati Zainol, Zairy
topic	HG Finance
spellingShingle	HG Finance Mohd Isa, Ahmad Mahir Determinants of personal bankruptcy, discharge and the role of Islamic social capital: Malaysia and Singapore case
description	Individuals adjudged bankrupts are financially incapacitated and restrained by the legal system to employment, entrepreneurship opportunities and formal banking credit facilities. A major concern is the increasing number of personal bankruptcy and undischarged bankrupts, mainly due to high household debts. However, past studies mostly focus on a legal approach to tackle this issue. Hence, the main objective of this study is to examine the influence of macroeconomic variables on bankruptcy and discharge in Malaysia and Singapore, which represent developed and developing economies. Gross Domestic Product (GDP), Consumer Price Index (CPI), Interest Rate (IR), Household debt (HD) and Unemployment (UE) were tested on bankruptcy (Model B) and discharge (Model D). Another objective is to assess the effect of integrating an Islamic social capital variable called social-relief-fund (SRF) in the discharge model (Model DIs). This fresh approach is based on the concept of Al-nahd and Ta’awun. The analysis used ARDL and Variance Decomposition on annual time series data over a 20- year (2000-2019) period covering long-run and short-run relationships. The significant factors for Bankruptcy for long-run are IR and HD; CPI and HD for Malaysia and Singapore, respectively. For DIs, SRF is only significant in Malaysia. For short run, CPI is highly significant for Model B, Model D and Model DIs. SRF is highly significant in increasing discharge in the long run. However, it shows a positive effect for Malaysia and negative influence for Singapore. The findings of this study provide new empirical contributions to bankruptcy and discharge literature. Important research implications are two- folds; i) Policy implication, that is, Islamic social finance can be a good social safety net to the financially distressed Muslim and non-Muslim individuals and ii) Practical implication where the debt repayment scheme should be inflation rate-adjusted to account for changes in the macroeconomic environment
format	Thesis
qualification_name	Doctor of Philosophy (PhD.)
qualification_level	Doctorate
author	Mohd Isa, Ahmad Mahir
author_facet	Mohd Isa, Ahmad Mahir
author_sort	Mohd Isa, Ahmad Mahir
title	Determinants of personal bankruptcy, discharge and the role of Islamic social capital: Malaysia and Singapore case
title_short	Determinants of personal bankruptcy, discharge and the role of Islamic social capital: Malaysia and Singapore case
title_full	Determinants of personal bankruptcy, discharge and the role of Islamic social capital: Malaysia and Singapore case
title_fullStr	Determinants of personal bankruptcy, discharge and the role of Islamic social capital: Malaysia and Singapore case
title_full_unstemmed	Determinants of personal bankruptcy, discharge and the role of Islamic social capital: Malaysia and Singapore case
title_sort	determinants of personal bankruptcy, discharge and the role of islamic social capital: malaysia and singapore case
granting_institution	Universiti Utara Malaysia
granting_department	Islamic Business School
publishDate	2022
url	https://etd.uum.edu.my/10570/1/s901404_01.pdf https://etd.uum.edu.my/10570/2/s901404_02.pdf
_version_	1776103845124898816

Determinants of personal bankruptcy, discharge and the role of Islamic social capital: Malaysia and Singapore case

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