This research applies the multiple regression analysis to the cross-sectional data that cover 249 samples of international Islamic mutual funds from 1998 to 2007. The overall result suggests that aqad characteristics (Mudarabah, Murabahah and Musharakah) significantly influence fund performance. Musharakah aqad has the highest influence towards fund performance, and followed by Mudarabah than Murabahah aqad. The investors' reaction (fund flows as proxy) to market information has positive and significant influence towards fund performance, suggesting that the relationship between the fund flow and fund performance follows the "smart money" or performance flows hypothesis. Market structure of Islamic mutual fund has positive influence and significant performance that measured by Alpha using local index whether for Islamic or conventional capital market. This result suggests that the relationship between market structure and fund performance at local market follows the "structure conduct performance" hypothesis. The results of the interaction analysis also show that the effect of fund flows and market structure towards performance is different according to the categories of the characteristics aqad of International Islamic fund. Fund flows influence towards positive performance is the highest in Musyarakah aqad. However the influence of fund flow towards performance is not significant in Mudarabah aqad. Market structure has positive and highest influence towards performance in Musyarakah aqad. Fees and expenses as control variable have no influence towards fund performance.

This study examines the impact of leverage on the firm's investment decisions using information on Malaysia Shariah listed firms between 2000 and 2007. From the theory, leverage is one mechanism for overcoming the over investment problem, suggesting a negative relationship between debt and investment for firms with low growth opportunities. This paper extends the previous literature by using a panel data methodology. It shows that leverage is negatively related to investment and this impact is significant to different measures of leverage and to alternative empirical models. However, this negative effect is not significant only for firms with low growth opportunities (lower Q) but also refers to firms with high growth opportunities (high Q).

This paper seeks to provide a framework for addressing regulatory issues which impact operations and institutional development of Islamic banks. Arguing against universal regulation or creating separate specialized regulations, the approach in this paper uses the regulatory dialectic principle to highlight the need to regulate Islamic banks and focuses on the area of regulations that need to be covered and regulated. The area of regulations can be classified into seven broad categories, i.e regulations on bank activities, bank entry, capital adequacy, deposit insurance, monitoring, government ownership and supervision. The area of regulations providing stability in a financial system context cannot develop without a conducive legal and regulatory environment. Finally, we will introduce the CAMEL rating to measure the soundness of Islamic banks.

Zakat is one of the five pillars of Islam which has a function of faith, social and economic functions. Muslims who can pay zakat are required to give at least 2.5 per cent of their wealth. The problem of poverty prevalent in disadvantaged regions because of the difficulty of access to information and communication led to a gap that is so high in wealth and resources. The instrument of zakat provides a paradigm in the achievement of equitable wealth distribution and healthy circulation. Zakat potentially offers a better life and improves the quality of human being. There is a human quality improvement not only in economic terms but also in spiritual terms such as improving religiousity. This study aims to examine the role of zakat to alleviate humanitarian issues in disadvantaged regions such as Sijunjung, one of zakat beneficiaries and impoverished areas in Indonesia. The researcher attempted a Cibest method to capture the impact of zakat beneficiaries before and after becoming a member of Zakat Community Development (ZCD) Program in material and spiritual value. The overall analysis shows that zakat has a positive impact on disadvantaged regions development and enhance the quality of life of the community. There is an improvement in the average of mustahik household incomes after becoming a member of ZCD Program. Cibest model demonstrates that material, spiritual, and absolute poverty index decreased by 10, 5, and 6 per cent. Meanwhile, the welfare index is increased by 21 per cent. These findings have significant implications for developing the quality of life in disadvantaged regions in Sijunjung. Therefore, zakat is one of the instruments to change the status of disadvantaged areas to be equivalent to other areas.