Edward Ireri

Journal of Behavioral and Experimental Finance 12 - Contents lists available at ScienceDirect Journal of Behavioral and Experimental Finance journal homepage: www.elsevier.com/locate/jbef Full length article Does the theory of planned behaviour (TPB) matter in Sukuk investment decisions? Mohammed Hersi Warsame a,∗ , Edward Mugambi Ireri b a University of Sharjah, Box 27272, United Arab Emirates b University of Kabianga, Box-, Kericho, Kenya article info Article history: Received 25 July 2016 Received in revised form 28 September 2016 Accepted 4 October 2016 Available online 18 October 2016 JEL classification: G020 G110 G120 G150 G240 abstract This research used the TPB model to investigate the use of Sukuk in Qatar. The research revealed that attitude has a significant and positive effect on the Behavioural intention to use Sukuk. The research also found that religiosity alone does not influence the use of Sukuk, but perceived behavioural factors such as the quality of customer service and the knowledge about the distinctive features of Sukuk are crucial to enhance the people’s perception about Sukuk. Finally, the research found that increasing awareness about Sukuk to both Muslims and non-Muslims would increase the use of Sukuk. © 2016 Elsevier B.V. All rights reserved. Keywords: Behaviour Islamic investment Qatar Sukuk TPB model 1. Introduction The Islamic industry has expanded exponentially since the Fatwa (legal opinion) of the Fiqh Academy of the Organisation of Islamic Conference in 1988 which legitimized the use of many Islamic financial products including Sukuk. Central Bank of Bahrain issued the first international Sukuk in 2001 when it issued a $100 US-dollar denominated ijara Sukuk (www.iifm.net). In fact, it is currently estimated at around $2.1 trillion and operates in 75 countries with an annual growth of 15% (Chong and Liu, 2009). Furthermore, S & P expects Sukuk issuance to reach $50-$55 billion in 2016 (www.wealth-monitor.com). Although, Sukuk is believed to be the real force behind the phenomenal growth of Islamic finance, it is accused of having no substantial difference from its conventional counterpart (Miller et al., 2007b; Wilson, 2008). Cakir and Raei (2007) argue that Sukuk has enabled governments to access the huge Islamic liquidity market as some notable ∗ Corresponding author. E-mail addresses:-(M.H. Warsame),-(E.M. Ireri). http://dx.doi.org/10.1016/j.jbef-/© 2016 Elsevier B.V. All rights reserved. sovereign Sukuk have been issued by the state of Qatar, the Bahrain monetary agency, the governments of Pakistan and Germany, but Malaysia is leading Sukuk issuances as 70% total global Sukuk is issued in Malaysia (Mohamed et al., 2015) However, according to Usmani (2007), despite its appealing features Sukuk still suffers from certain shortcomings such as its close resemblance to conventional bonds. In a study carried out by Wilson (2008) in Saudi Arabia and Malaysia on the importance of innovations in structuring Sukuk securities. Krasicka and Nowak (2012), reported that the returns for both conventional bonds and Sukuk are driven by common factors and their price behaviour exhibits similar patterns. Similarly Afshar (2013) found that conventional bonds are debt-based while Sukuk investments are asset-based. The authors reported that the only fundamental difference between conventional bonds and Sukuk was religious differences in their structures but virtually no financial implication differences were identified. According to Najeeb (2013), Sukuk like convectional bonds faces market risks such as market, credit, liquidity, operational, regulatory, legal and fiduciary risks and in addition to the inherent Shariah compliance risks. Similarly, Noor et al. (2013) reported 94 M.H. Warsame, E.M. Ireri / Journal of Behavioral and Experimental Finance 12 - Fig. 1. The path analysis on the TPB model used in the study. Hypothesis # 6 was used to test the moderation effects on the model. that Sukuk defaults might reduce investors’ confidence and in a cross sectional study done by Said and Grassa (2013) on the determinants of Sukuk market, the authors found that the growth of Sukuk market depends on GDP per capita, economic size, trade openness, population of Muslims (percentage), and regulatory quality. A study by Hanifa et al. (2014), revealed that conventional bonds issuers engage in debt optimizing while Sukuk issuers aim for smaller firms with high growth opportunities. According to Hussain et al. (2016), Sukuk are strategically vital not only for Islamic financial industry, but also a significant financial source for infrastructure development. However, the main motivation for the selection of Sukuk by investors has not yet been established despite numerous attempts by various researchers (Mohamed et al., 2015). Therefore, this study has applied theory of Planned Behaviour (TPB) to investigate the effect of certain moderators such as age, gender and education on the selection of Sukuk investments. 1.1. Rationale of the study As far as we know, no study has been published using the theory of Planned Behaviour (TPB) model regarding the influence of attitude, subjective norm and the perceived behavioural control on investors’ behavioural intention towards the actual usage of Sukuk either in Qatar or worldwide. Hence, this study addresses this knowledge gap and adopts the theory of planned behaviour (TPB) to predict the investors’ intention to use Sukuk in Qatar, while at the same time investigating the effect of gender, age and education level as the main moderators on the intention of using Sukuk. Therefore, the main research question of this study is: Does the investors’ perception about Sukuk influence their investment intention towards Sukuk? 1.2. Literature review McMillen (2007) States that Sukuk have gained popularity in recent years since is heavily used by governments and corporate firms to finance their respective projects. However, Sukuk mimic conventional bonds as the two have similarities in terms of cash flow and risk features (Miller et al., 2007a). Nevertheless, Cakir and Raei (2007) argues that Sukuk is very different from conventional bonds as far as investment features, diversification objectives and risk management strategies are concerned. Although, like its conventional counterpart Sukuk is meant to raise capital for its issuers, it differs from the former both in principle and structure (Afshar, 2013) For instance, Sukuk issuance undergoes rigorous sharia screening process and they have to be Sharia compliant both in nature and use and also entitle an ownership stake in the underlying asset to the holder. According to a study conducted by El Qorchi (2005), majority of Sukuk investors hold their investments to maturity which limits the Sukuk secondary market. Likewise, In his thesis, Hassan (2012) states that Sukuk portfolio is riskier than conventional bonds. However, a study conducted in Malaysia by Mohamed et al. (2015), suggest that in terms of optimizing risks and returns, Sukuk performs better than conventional bonds. A study conducted by Jobst et al. (2008) reports that the demand for Sukuk has dramatically increased after the financial crisis which suggests that investors perceive Sukuk is more ethical and stable than conventional finance. According to Naim et al. (2013), the higher costs associated with sharia compliance in Sukuk issuances force companies that are driven by profit maximization to resort to Fatwa shopping. Azmat et al. (2014) argue that the high Sharia compliance costs may negatively impact on Sukuk price On the other hand Malik et al. (2011) explain that the negative impact on Sukuk price has been augmented by the existence of vast numbers of Sharia advisors willing to issue a different Fatwa (legal opinion) to accommodate the needs of their customers Fatwa shopping opportunities and weak regulatory regimes is believed to worsen Sukuk prices in the financial markets (Walid, 2005). Some observers are of the view that the whole situation is further aggravated by switching rating agencies in order to achieve the highest rating possible which is intended to improve marketability of Sukuk instruments (Bolton et al., 2012). 2. Theoretical framework According to Nafith et al. (2014), ‘‘Sukuk is the most interesting investment instrument in Islamic finance’’. Thus in this study, a theoretical framework on the usage of Sukuk was developed using the theory of Planned Behaviour(TPB) as shown on Fig. 1. M.H. Warsame, E.M. Ireri / Journal of Behavioral and Experimental Finance 12 - 2.1. Theory of planned behaviour The fundamental basis of this study is the belief about the use of Sukuk and the theory of planned behaviour (TPB) was used in the study. In the main model, attitude towards the use of Sukuk, Subjective norms with regard to the use of Sukuk, perceived behavioural control, intentions to use Sukuk, and the actual usage of Sukuk were used as the main antecedents. According to Ajzen (1991, p.188), ‘‘the more favourable the attitude and subjective norm with respect to behaviour, and the greater the perceived behavioural control, the stronger should be an individual’s intention to perform the behaviour under consideration’’. 2.1.1. Attitude According to Ajzen and Fishbein (1988), attitude being the first determinant of behavioural intention in the TPB model ‘‘is the degree to which the person has a favourable or unfavourable evaluation of the behaviour in question’’. In this study, the use of Sukuk was the behaviour under investigation. Osahon (2011), reported that Kuwaitis’ were reluctant in the adoption of Islamic banking considering it ‘‘archaic, unworkable and counterproductive to the good health of free enterprise’’. The author further argues that Iran being a conservative Islamic country has ‘‘withdrawn the interest free content of the product by allowing her Islamic banks to charge between 4%–8% interests on loans’’. Religious beliefs have also been reported to influence individual attitude in using Islamic banking products and services and thus considered as the primary factor in the choice of an Islamic banking institution (Abdul and Masood, 2012; Gait and Worthington, 2008; Hegazy, 1995; Magd and McCoy, 2014; Omer, unpublished). A study conducted by Faisal et al. (2012) on the awareness about Islamic banking products and services in India compared Muslims and Non-Muslims and found that both had a positive attitude towards Islamic banking services. Religion and profitability influences the attitudes of Islamic bank customers in Bahrain Metawa and Almossawi (1998). A study on the future of Islamic Banking in the Sultanate of Oman by Mubeen et al. (2014) reported a significant and positive attitude by the bank customers. Thus we hypothesize that; H1 : Attitude has a significant and positive effect on the behavioural intention to use Sukuk. According to Ajzen and Fishbein (2005), ‘‘when persons have a particular interest, and they hold their attitude with great confidence, and for whom the attitude is important, these persons are likely to act in accordance with their general attitude’’. 2.1.2. Subjective norm Subjective norm is the second antecedent of behaviour Intention. According to Ajzen and Fishbein (1988), ‘‘it is the influence of social pressure that is perceived by the individual (normative beliefs) and it is weighted by (motivation to comply)’’. Normative belief represents the social pressure influence to perform or not perform a particular behaviour, while motivation to comply represents individual’s motivation to comply with the expectations that one perceives. According to a study by Ramdhony (2013), Muslim and non-Muslim bank customers believed that a combination of religious belief and returns would motivate a potential customer to choose Islamic banking products and services. The author further notes that ‘‘third party influences’ plays a major role in the bank selection criteria for Muslims where they tend to follow their peers and are more influenced by the media’’. This means that religious belief, peer influence and media are more likely to influence the use of Sukuk. Similarly, Zainuddin et al. (2004) studied the perceptions of users and non-users of Islamic banking services among bank customers in Malaysia found that ‘‘the decision- making processes of Islamic banks’ users were affected by spouses, friends, relatives and their innate religious motivation’’. Bley and Kuehn (2004)’s study 95 among business students’ in the United Arab Emirates found that religious motivations were the main preference on the choice of Islamic bank services. Thus we hypothesize that; H2 : Subjective norm has no significant effect on the behavioural intention to use Sukuk. 2.1.3. Perceived behavioural control Perceived behavioural control is the third antecedent of behavioural intention (Ajzen and Fishbein, 1988). According to Ajzen (1991), perceived behavioural control refers to ‘‘people’s perception of the ease or difficulty of performing the behaviour of interest’’. In this study, we phrased the sentence to mean perceived behavioural control refers to investors’ perception of the ease or difficulty of investing on Sukuk. In summary, perceived behavioural control and behavioural intentions can be used directly to predict behavioural achievement (Ajzen, 1991). In this context, the use of Sukuk was chosen as the behavioural achievement. In order to ensure the realistic interpretation of perceived behavioural control, we only chose respondents who were knowledgeable about Sukuk, this was because (Ajzen, 1991), argued that perceived behavioural control is only ‘‘realistic when a person has relatively little information about the behaviour’’. In order to attract more consumers on Islamic banking services, Lo and Leow (2014), states that it is important for ‘‘Islamic banks to understand the consumers’ behaviour prior to converting them into a customer’’. The quality of customer service, product features as well as sufficient knowledge about the products and services offered by the Islamic banks’ staff are the key factors that determine the uptake of Sharia compliant products by customers (Awan and Bukhari, 2011). According to a study conducted in Pakistan by Butt et al. (2011), limited branch networks and inconvenient locations of Islamic banks were the major setbacks faced by non-users of Islamic bank products and services while choosing an Islamic bank. Similarly, Mansour et al. (2010) conducted a study in the United Kingdom and found that low services charges attracts customers irrespective of their religious affiliation and demographic characteristics. In a study conducted in Malaysia by Selamat and Abdul-Kadir (2012), Islamic bank customers emphasized the importance of fast and efficient bank services, confidentiality on their bank accounts, reputation of the bank and the image of the bank as their main patronage factors in selecting a bank. Promotion of Islamic education has also been found to be an essential factor in the creation of awareness about Islamic banking products and services (Zainuddin et al., 2004). Thus we hypothesize; H3 : Perceived behavioural control has a significant and positive effect on the behavioural intention to use Sukuk. H4 : Perceived behavioural control has a significant and positive effect on the actual usage of Sukuk. 2.1.4. Behavioural intention Behavioural intention is influenced by attitude, subjective norm, and perceived behaviour control. According to Ajzen and Fishbein (1988), behavioural intention signifies the extent to which someone is willing to attempt, and the amount of effort the person is planning to exert so as to perform a particular behaviour. A study conducted on Malaysian public companies by Godlewski et al. (2011), states that ‘‘entrepreneurs opt for Sukuk if they expect a low profit thus minimizing their losses in the likely event of failure, while others will opt for conventional bonds if they expect high profit thus increasing their profit in the likely event of success’’. Similarly, Abanumy et al. (2005), states ‘‘stock market participants will expect that the worst borrowers to choose to issue Sukuk and will interpret such issuance as a negative signal on the financial position of the issuing firm’’. Thus we hypothesize; H5 : Behavioural intention to use Sukuk has a significant and positive effect on the actual usage of Sukuk. 96 M.H. Warsame, E.M. Ireri / Journal of Behavioral and Experimental Finance 12 - Table 1 Measurement constructs and composite reliabilities (N = 553). Code Attributes Factor loadings Mean ± SD Composite reliability Actual Usage of Sukuk AU1 AU2 AU3 AU4 AU5 Have you ever invested in Sukuk? I invest in Sukuk because it is the best option for me to save my money How long have you been using Sukuk? Since Sukuk invest in Halal projects, I invest in them regardless of return or riskiness Sukuk is a reliable platform for me to take care of my personal investments. - 3.43 ± 1.01 0.896 Behavioural Intention INT1 INT2 INT3 Intend to invest in Sukuk at the moment I predict I will continue to invest in Sukuk on a regular basis. For my investment, I would invest in Sukuk. - 4.00 ± 0.72 0.645 Attitude ATT1 ATT2 ATT3 ATT4 Investing in Sukuk would be wise idea Investing in Sukuk is a good idea I like investing in Sukuk Sukuk are more stable - 3.61 ± 1.04 0.875 Subjective Norms SN1 SN2 SN3 SN4 Most people who are important to me would think I invest in Sukuk Most people who are important to me would want me to invest in Sukuk. My family important to me would think that investing in Sukuk would be a wise idea. People whose opinions I value would prefer me to invest in Sukuk. - 4.45 ± 1.71 0.732 Perceived Behaviour Control PBC1 PBC2 PBC3 PBC4 I would be able to invest in Sukuk I have the necessary knowledge to invest in Sukuk Given the necessary awareness, it would be easier for me to invest in Sukuk. I feel safe investing in Sukuk as it will not cause me financial risk - 4.01 ± 0.70 0.738 Notes: Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. Rotation converged in 5 iterations. Composite Reliability were calculated using the SEM macro developed by Korchia (2010) obtained at http://www.watoowatoo.net/sem/sem.html. 2.1.5. Actual behaviour It is the actualization of intention or perceived behavioural control into real action. In this study, the above phrase meant the actualization of intention to use Sukuk or the perceived behaviour control on the use of Sukuk into the actual usage of Sukuk by a person. A study conducted by Abanumy et al. (2005), reported that Sukuk issues had significant negative reactions to the market unlike conventional bonds issues which had insignificant reactions. Several studies such as Ahuja (2002); Ford et al. (1996) and Wilson (2008) used the theory of Planned Behaviour to investigate the adoption and usage of information technology (IT). The authors highlighted that age, gender, level of education are significant moderators that have an influence on attitude, subjective norm, and perceived behavioural control on behavioural intentions to adopt and use IT. In as much as the studies were investigating the adoption and usage of IT, we felt that the same moderators could be investigated to determine if they have any influence on the intention to use Sukuk and the actual usage of Sukuk. Thus we hypothesize; H6 : There are moderating differences on customers’ intention to use Sukuk based on their demographics. 553 participants from Qatar. In the study, 223 (40.3%) of the respondents were women, while 330 (59.7%) were men. In terms of the education level, 19 (3.4%) had less than a high school education or a high school education, 256 (46.3%) bachelor’s degree, 204 (36.9%) master’s degree, and 74 (13.4%) doctorate degree The demographic characteristics on age were: 18–24 years (n = 124) 22.4%, 25–34 years (n = 189) 34.2%, 35–44 years (n = 155) 28%, 45–54 years (n = 49) 8.9%, 55–64 years (n = 27) 4.9%, and over 65 years (n = 9) 1.6%. Studies by Venkatesh et al. (2000) and Morris et al. (2005) using the theory of planned behaviour (TPB) model in the context of technology adoption, found that age and gender significantly moderate the influences of attitude, perceived behavioural control and subjective norm on the behavioural intention. However, a study by Baker et al. (2007) on the adoption of IT using the TPB model, found that age and gender were non-significant moderators in Saudi Arabia culture. In this research, we used the TPB model to investigate the behavioural intention and the actual usage of Sukuk. Similarly, this study agrees with Baker et al. (2007) that age and gender are nonsignificant moderators in a non-western culture. 3. Research methodology 3.1. Reliability testing The study was conducted in the capital city of Doha in Qatar. Doha was chosen as over 60% of the residents of the state of Qatar live in Doha. A survey questionnaire was used to measure the model variable constructs. Gender, age, and the level of education were the three moderating demographic variables that were incorporated in the survey instrument. Two research assistants were given the job to collect the data. The respondents were issued with questionnaires to fill. English language was used to develop the questionnaires. Overall, the final sample size had All our items as shown on Table 1 had loadings greater than 0.40 as suggested by Stevens (1996) and thus were all retained in the model. In order to perform path analysis, we performed composite scores to obtain the average representative value for our main constructs. The composite reliabilities passed the recommended value of 0.7 as suggested by Hulland (1999) apart for behavioural intention which had a value of 0.645. Thus we state that our sample had shown acceptable internal consistency and reliability measures of their construct. M.H. Warsame, E.M. Ireri / Journal of Behavioral and Experimental Finance 12 - 97 Table 2 Standardized regression weights summary on the final model. Hypotheses Interacting path variables Estimate p Decision H1 H2 H3 H4 H5 Behavioural Intention←Attitude Behavioural Intention←Subjective Norm Behavioural Intention←Perceived Behavioural Control Actual Usage←Perceived Behavioural Control Actual Usage←Behavioural Intention - - <- Accept Accept Accept Accept Reject Notes: A = Attitude towards use of Sukuk, SN = Subjective Norm on use of Sukuk, BI = Behavioural Intention on use of Sukuk, PBC = Perceived Behavioural Control on the use of Sukuk, AU = Actual usage of Sukuk. P values estimated at 0.05 confidence level. 4. Model testing The Path Regression Analysis was performed using IBM SPSS AMOS (IBM Corp, 2013). Age, gender, and education level were used as the moderators. In the final model on Fig. 1, intentions to use Sukuk and perceived behavioural control on the use of Sukuk, will predict the likelihood of Islamic bank customers using Sukuk. Meanwhile, intentions to use Sukuk will be mainly determined by the attitude towards the use of Sukuk, the subjective norm (perceived social pressure and religiosity on the importance of using Sukuk), and the perceived behaviour control on the use of Sukuk. The summary of the final model was (χ 2 = 40.88; df = 2); p < 0.001. The chi square test assumes multivariate normality, nevertheless, severe deviations from multivariate normality may lead to rejection of properly specified model (McIntosh, 2006). Similarly, chi square is dependent on the sample size (Bentler and Bonnet, 1980; Jöreskog and Sörbom, 1993), and thus increases the likelihood of rejecting a better fit model. This prompted further investigation on the values of the other model fit indices. The Goodness of Fit Index (GFI = 0.972), Comparative Fit Index (CFI = 0.967), Incremental Fit Index (IFI = 0.967), Normed Fit Index (NFI = 0.966), were all above their recommended levels of above 0.90 (Wheaton et al., 1977; Bentler and Bonnet, 1980), and well above 0.95 as suggested by Hooper et al. (2008). Nevertheless, the Adjusted Goodness of Fit Index was (AGFI = 0.792), Tucker Lewis Index (TLI = 0.835) were below the above recommended values. The TLI and IFI are also relatively unaffected by sample size (Gerbing and Anderson, 1993; Hu and Bentler, 1995; Marsh et al., 1988). The Standardized Root Mean Residual (SRMR) value was 0.080. According to Diamantopoulos and Siguaw (2000) and Byrne (1998) a SRMR value less than 0.05 is recommended, while Hu and Bentler (1999) suggests a SRMR value less than 0.08 as being acceptable. Based on all the assessment criteria that we used, we concluded that the model showed an overall acceptable model fit. 4.1. Path analysis The p values were interpreted in respect with their signage and the β coefficients. The β coefficients and the p values on Table 2 were used to interpret the stated hypotheses. The hypotheses were interpreted according to the way they were stated and backed by the relevant literature review. 4.1.1. Attitude on the use of Sukuk H1 : Attitude has a significant and positive effect on the behavioural intention to use Sukuk. The results showed that attitude has a significant and positive effect between towards the Behaviour intention to use Sukuk (β = 0.114; p = 0.032). Thus we accept the null hypothesis. Doha is a cosmopolitan city with both Muslims and Non-Muslims. However, Islam is the main religion. The finding on attitude is in agreement with; Hegazy (1995); Gait and Worthington (2008); Magd and McCoy (2014) and Abdul and Masood (2012). Also a study by Omer (unpublished) linked religious beliefs to influence individual attitude on using Islamic banking products and services. Therefore, since Sukuk is among the main investment products that are offered by Islamic banks, Islam plays a greater role on influencing Muslims’ attitude towards the behavioural intention to use Islamic banking products and services. Thus, the current study was in agreement with studies done by Metawa and Almossawi (1998) and Mubeen et al. (2014) which established the positive influence that religion has on customers’ attitudes towards Islamic banking products and services. 4.1.2. Subjective norm towards the use of Sukuk H2 : Subjective norm has no significant effect on the behavioural intention to use Sukuk. The results did not reveal any significant effect between subject norm and behavioural intention towards the use of Sukuk (β = 0.066; p = 0.228). Thus the hypothesis was accepted and we stated that the subjective norm has no significant effect on the behavioural intention to use Sukuk. Although the current study found that subjective norm had no significant effect on the behavioural intention to use Sukuk, we cannot completely rule out the influence of religion and peer pressure. Ramdhony (2013), reported that religious belief, peer pressure, media influence, and return on investments as the main motivation factors that would influence a potential customer in choosing Islamic banking products and services. Nevertheless, our study was in agreement with studies done by Reinecke et al. (1996) and Hegazy (1995) which showed that the direct effect of subjective norm attenuate with time and thus the influence on persons diminishes becomes non-significant. 4.1.3. Perceived Behavioural Control towards the use of Sukuk H3 : Perceived behavioural control has a significant and positive effect on the behavioural intention to use Sukuk. The results revealed that perceived behavioural control has a significant and positive effect on the behavioural intention to use Sukuk (β = 0.633; p < 0.001). Thus we accepted the null hypothesis. In the current study, awareness about Islamic banking products and services was equated as one of the perceived behavioural control factors that have an effect on behavioural intention to use Sukuk. Intention to use is different from the actual usage. Thus the findings of the current study were in agreement with studies done by Zainuddin et al. (2004) on the role that awareness about Islamic banking products and services through the promoting Islamic education, and Masood et al. (2014) and Syed et al. (2012) on the role that advertisement on awareness of Islamic banking products and services. Thus we concluded that awareness about Islamic banking products and services as one of the perceived behavioural control factors in the study would greatly influence the behavioural intention to use Sukuk. H4 : Perceived behavioural control has a significant and positive effect on the actual usage of Sukuk. Perceived behavioural control showed a significant and positive effect on the actual usage of Sukuk (β = 0.115; p = 0.007). Thus we accepted the null hypothesize In the context of the current study, perceived behavioural control was assessed using the ability 98 M.H. Warsame, E.M. Ireri / Journal of Behavioral and Experimental Finance 12 - of a customer to invest in Sukuk, possession of the necessary knowledge to invest in Sukuk, awareness about Sukuk, and the feeling of safety as the measures of perception on the ease or difficulty of investing on Sukuk. Although we investigated different items, the current finding was in agreement with earlier findings by; Mansour et al. (2010); Awan and Bukhari (2011) and Selamat and Abdul-Kadir (2012) that reported quality of customer service, product features, low services charges, fast and efficient bank services, confidentiality on customers’ bank accounts, reputation of the bank, and the image of the bank as the main patronage factors in selecting a bank. 4.1.4. Behavioural Intention towards the use of Sukuk H5 : Behavioural intention to use Sukuk has a significant and positive effect on the actual usage of Sukuk. Behavioural intention did not show any significant and positive effect on the actual usage of Sukuk (β = 0.104; p = 0.07). Thus we reject the null hypothesize. Behavioural intention was assessed using three items namely; intention to invest in Sukuk at the moment, prediction of continuance investment on Sukuk on regular basis, and intention to invest in Sukuk personally. However, upon conducting the chi square test, a significant differences were found on those who invested in Sukuk and Conventional bonds between Behavioural intention and ‘‘Intend to invest in Sukuk at the moment’’χ 2 (4) = 12.19, p = 0.016. The respondents who invested on Sukuk had the highest agreement score at 141 (25.5%) compared to those who had invested in conventional bond 93 (16.8%). Similarly, a significant difference was found on those who invested in Sukuk and Conventional bonds between Behavioural intention and ‘‘I predict I will continue to invest in Sukuk on a regular basis’’ χ 2 (4) = 9.64, p = 0.047. The respondents who invested on Sukuk had the highest agreement score at 154 (27.8%) compared to those who had invested in conventional bond 90 (16.3%). Nevertheless, there were no significant differences between Behavioural intention and ‘‘For my investment, I would invest in Sukuk’’ χ 2 (4) = 1.56, p = 0.816 in terms of investing in Sukuk and conventional bond. The respondents who invested in Sukuk had the highest agreement score at 133 (24.1%) compared to those who had invested in conventional bond 78 (14.1%). Although the current study did not assess preference in terms of investing either in Sukuk or in conventional bonds, the finding reported in percent are in agreement with Zainuddin et al. (2004) that both Muslims and Non-Muslims would prefer to invest their savings in Islamic banks if they were provided with better profit than the existing commercial banks. However, this hypothesis had its own setback as we did not assess religiosity in the survey. 4.1.5. Moderation effects on the use of Sukuk Gender, age, level of education and the type of bond were used as the moderators in the current study. H6 : There are moderation effects on customers’ intention to use Sukuk based on gender, age, level of education There were no significant moderation effects on customers’ intentions to use Sukuk based on gender, age, level of education, and the type of bond. Thus we reject the null hypothesis. In the context of using the theory of planned behaviour, the findings from the current study disagrees with studies by Ahuja (2002); Ford et al. (1996) and Wilson (2008) that age, gender and level of education were significant moderators that have an influence on attitude, subjective norm, and perceived behavioural control on behavioural intentions to invest in Sukuk in Doha. 5. Discussion Several papers have attempted to compare and contrast the products and services offered by Islamic and conventional banks using different theoretical models. Most of these studies were conducted with the main objective of finding ways of increasing the market share of Islamic banks and other financial institutions in the competitive financial industry market. However, the study aims to study the attitude, the subjective norm and the perceived behavioural control of Sukuk investors and apply the theory of planned behaviour to investigate the behavioural intention of using Sukuk as well as the actual usage of Sukuk. Through the application of the theory of planned behaviour model in the research, the intention to use Sukuk was predicted very well from customers’ personal attitude towards the use of Sukuk, and from perceived behavioural control towards the use of Sukuk. However, intention to use Sukuk was not predicted well from customers’ subjective norm (personal social pressure). Attitude, subjective norm and the perceived behavioural control accounted for 51% of the variance in the intention to use Sukuk. Nevertheless, Intention to use Sukuk accounted for 6% of the actual usage of Sukuk. This research found that attitude has a significant and positive effect on the Behavioural intention to use Sukuk. Similarly, the research revealed that attitude had the second strongest influence on the intention to use Sukuk after perceived behavioural control. Attitude influences Islamic bank customers’ intention to use Sukuk. Customers with high positive attitudes towards Islamic banking products and services had the greatest intention to use Sukuk. Religious beliefs influence individual attitude in using Islamic banking products and services (Abdul and Masood, 2012; Butt et al., 2011; Mansour et al., 2010; Metawa and Almossawi, 1998; Seliaman and Al-Turki, 2012). However, a study by Buchari et al. (2014) in Bahrain found that having knowledge about Islamic banking products does not directly translate to using the product. Similarly, a study by Ahuja (2002) in Malaysia found that religion was not a primary factor in choosing a bank. Thus Sukuk being a Sharia compliant product and mainly offered by Islamic banks, we had anticipated that attitude would have the strongest influence towards the use of Sukuk when compared with perceived behavioural control. However, this was not the case in our research as we found that perceived behavioural control had the strongest influence towards the use of Sukuk. This prompted us to conclude that religiosity alone does not influence the most on the use of Sukuk, but perceived behavioural control factors such as the quality of customer service, level of knowledge about products and services offered by the Islamic bank staff and creation of awareness about Sharia compliant products and services were far more important in this respect. Perceived behavioural control had the strongest contribution (β = 0.633) in predicting the intentions to use Sukuk suggesting that the majority of customers who participated in this study were able to overcome the challenges that would obstruct them from their intentions to use Sukuk. Similarly, perceived behavioural control had some contribution (β = 0.155) in predicting the actual usage of Sukuk though not as much as it had predicted the intentions to use Sukuk. This suggests that the main driving force behind the phenomenal growth of Sukuk in recent years is the fact that it is a Sharia compliant financial product and appeals to many investors due to its unique features. When investors are confident about the Sharia compliance of Sukuk, their levels of uncertainty about this product is dramatically reduced prompting the perceived behavioural intentions towards the use of Sukuk to increase simultaneously. Interestingly enough, the study revealed that there is a significant association between subjective norm and behavioural intention. Furthermore, this research has found that religious belief as well the influences of peer, spouses, friends, relatives and media are more likely to influence the use of Sukuk. This means as the awareness about Sukuk continues to increase among Islamic bank customers, the customers’ individual opinion M.H. Warsame, E.M. Ireri / Journal of Behavioral and Experimental Finance 12 - about Sukuk benefits will increase Consequently, as more investors become aware about the facts regarding Sukuk, the direct effect of subjective norm towards the intention to use Sukuk becomes insignificant and these finding agree with studies by Reinecke et al. (1996) which suggested that the direct effect of subjective norm wears off with time. 6. Limitations and challenges The current study has some limitations. First, we did not assess behaviour-related beliefs with regard to Sukuk. In the TPB model, behavioural, normative, and control beliefs (behaviour-related beliefs) are included to provide cognitive foundations for the direct measures namely; attitudes, subjective norms, and perceptions of behavioural control. Normative beliefs are expectations from important individuals or groups. Control beliefs are factors that can facilitate or hinder performance of behaviour. Behavioural beliefs are the likely consequences of the behaviour that can produce favourable or unfavourable attitude towards the behaviour. Thus in the current study, we only investigated the direct measures in the TPB model without the behaviour-related beliefs. Secondly, the study was limited only Doha. Doha is a just among the many cities found in Qatar. Thus we feel that the results would have been more representative if we had broadened our study area. Thirdly, subjective norm is likely to influence behavioural intention under certain circumstances, and thus it would be appropriate to investigate situations under which subjective norms are significant with regard to behaviour intention to invest in Sukuk. 7. Conclusion This research used the theory of planned behaviour to investigate the use of Sukuk in Doha, Qatar and all the six hypotheses proposed in the study were fully investigated. This study is the first of its kind as the reviewed literatures had not used the TPB model to understand the behavioural intention to invest in Sukuk. However, the research revealed some interesting findings regarding the impact of certain moderators such as age, gender and education on the intention to invest in Sukuk. Interestingly, the research found that age, gender, and the level of education were non-significant moderators in a non-western culture especially in Qatar. Furthermore, the study concluded that attitude has a significant and positive effect on the Behavioural intention to use Sukuk. Similarly, perceived behavioural control emerged as the most important factor on the investment of Sukuk which means that Sukuk issuers cannot ignore the direct effect of attitude and perceived behavioural control influences on the intentions to invest in Sukuk and the direct effect of perceived behavioural control towards the actual use of Sukuk. Perceived social influence (Subjective norm) has no significant effect towards the behavioural intention to use Sukuk. Perceived behavioural control has a significant, strong, and positive direct effect on the behavioural intention to use Sukuk. However, the effect of perceived behavioural control on actual usage of Sukuk is not as strong as the effect on behavioural intention to use Sukuk. Behavioural intention to use Sukuk has no significant, direct, and positive effect towards the actual usage of Sukuk. Furthermore, this research closed gap in the literature regarding the testing of the direct measures of the theory of planned behaviour (TPB) in the context of intention to invest in Sukuk not only in Qatar but in the entire Middle East where the majority of residents are Muslims. Most of the published studies compare Islamic and conventional banks in the Middle East while others only generalize their findings to Islamic banking products and services without specifically investigating factors that would influence investments on Sukuk, but this paper has tackled this issue. The other notable 99 contribution of this paper is handling the gap in the theory by testing the moderation relationships on the TPB model in the context of Sukuk as no published literatures were found to have tested the moderation effect of socio-demographics in the context of investing in Sukuk in the Middle East. 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Dr. Warsame also holds two prestigious professional qualifications, namely, ACCA (Chartered Certified Accountant) and CIPA (Certified Islamic Professional Accountant). Dr. Warsame is currently a faculty member, and the current chairman of Finance and Economics Department at the University of Sharjah, UAE. Edward Mugambi Ireri is the Senior Research Scientist and Director at Smart Health EQAS Consultants Limited company, with over 10 years’ experience. His main interests are in multi-disciplinary research collaborations, survey analysis, SEM, and CB-SEM modelling. The author is currently the research assistant at the University of Kabianga, Kenya.