Determinants of Intention to Adopt Equity-Based Financing During the Covid-19 Pandemic: A Malaysian Perspective

Mohamad, S.N. A.; Basah, M. Y. A.

doi:10.7187/GJATSI062022-7

Authors

Mohamad, S.N. A. Academy Contemporary of Islamic Studies, Universiti Teknologi MARA, 40450 Shah Alam, Selangor, Malaysia
Basah, M. Y. A. Faculty Economics and Muamalat, Universiti Sains Islam Malaysia, 71900 Bandar Baru Nilai, Negeri Sembilan, Malaysia

DOI:

https://doi.org/10.7187/GJATSI062022-7

Keywords:

Equity-based Financing (Musharakah & Mudharabah), Theory of Planned Behavior, Islamic Banking & Finance, Structural Equation Modelling

Abstract

The purpose of this paper is to empirically investigate the factors that affect Malaysian users’ financing to participate in using Equity-based Financing (Musharakah & Mudharabah) or known as EBF. This study applied the theory of planned behavior (TPB) as the underlying theory to analyze the determinants that influence the intention of Malaysian users’ of financing to participate in EBF. The analysis was conducted using Structural Equation Modelling (SEM), with a total of 250 respondents. According to the findings, only attitudes (ATT) about equity-based financing (EBF) had a positive and significant impact on Malaysian users of financing involvement in EBF during pandemic Covid-19. Subjective Norms (SNORMS) and Perceived Behavioral Control (PBControl) turn out to be non-significant factors for users of financing in Malaysia. The results of the study could lead to advancements towards Islamic banking and finance, as well as positive implications for practitioners. Focusing on ATT to establish customer-oriented products of financing connections within banks could help EBF applications be better managed. This study applied TPB for the first time to Malaysian users’ financial decisions in the area of EBF during the pandemic Covid-19.

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