Commodity Murabaha: The Theory-Practice Gap

Abstract

This paper examines the existence of theory-practice gap in commodity murabaha. The paper, moreover, investigates the factors that influence Islamic banks administrators in their utilization of research in decision-making, and identifies current barriers to research use. To gather data and answers for the study questions, a survey developed by Lovett (2003, p. 100) was modified and used. The revised 54-item Likert scale survey was electronically mailed to 364 of the administrator of Islamic banks worldwide. A total of 96 usable surveys provided the data used in this study. Percentages, means, and standard deviation were calculated for each survey item. Analysis using t-tests and ANOVAs were conducted for each of the variables posed in the questions. Results of the study revealed that administrators of Islamic banks have a positive attitude toward research and its value in the area of commodity murabaha. Administrators of Islamic banks believe that research was important and useful tool to develop the area of commodity murabaha. They believe that new technology made it easier to locate, access, and quickly find useful research, and that research brings about change in Islamic futures. They admit that increased accountability make them spend more resources on research-based practices, and forces them to look for practical applications of research. The study, furthermore, revealed that the most significant barriers to research utilization are lack of practical application of research, lack of time to pursue research, difficult manner of writing research, and complex presentation of research.