• ISSN: 2301-3567 (Print), 2972-3981 (Online)
    • Abbreviated Title: J. Econ. Bus. Manag.
    • Frequency: Quarterly
    • DOI: 10.18178/JOEBM
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HOME > Archive > 2026 > Volume 14 Number 3 (2026) >
JOEBM 2026 Vol.14(3): 161-166
DOI: 10.18178/joebm.2026.14.3.929

Stressed but Stable? Examining Risk, Investment, and Geopolitical Tensions in Islamic Bank Stability: Evidence from QISMUT+3

Fitriani*, Abd. Wahab, Tita Novita Sari, and Siti Zulaikha
Fitriani*, Abd. Wahab, Tita Novita Sari, and Siti Zulaikha*
Department of Islamic Economics, Faculty of Economics and Business, Universitas Airlangga, Surabaya, Indonesia
Email: fitriani-2023@feb.unair.ac.id (F.); abd.wahab-2023@feb.unair.ac.id (A.W.); tita.novita.sari-2023@feb.unair.ac.id (T.N.S.); siti-z@feb.unair.ac.id (S.Z.)
*Corresponding author

Manuscript received January 4, 2026; accepted April 11, 2026; published July 11, 2026.

Abstract—This study aims to examine the influence of credit risk (Non-Performing Financing), financial risk (Debt to Equity Ratio), investment (Capital Expenditure), and Geopolitical Risk on the stability of Islamic banks. This study utilizes static panel data from 22 Islamic banks spread across nine QISMUT+3 countries during the period 2016–2024. The analysis was conducted using panel regression with Random Effect as the main model. Robustness tests were conducted through Fixed Effect and Pooled OLS models. The results indicate that Capex and Geopolitical Risk are significant in the main model, but only Capex remains consistently significant across all robustness models, confirming the strategic role of productive investment in the long-term stability of Islamic banks. DER is found to be insignificant, while NPF and GPR do not show consistent effects, reflecting the unique risk structure and financing management of Islamic banking. This study offers the first comprehensive approach combining internal and external determinants in the context of cross-country Islamic bank stability within the strongest global representation of Islamic finance. These findings hold high significance for developing regulatory strategies and providing evidence-based insights relevant to Islamic banking regulators in Indonesia for formulating risk mitigation policies and strengthening the resilience of Islamic banks.
 
Keywords—Islamic bank stability, capital expenditure, credit risk, financial risk, geopolitical risk

Cite: Fitriani, Abd. Wahab, Tita Novita Sari, and Siti Zulaikha, "Stressed but Stable? Examining Risk, Investment, and Geopolitical Tensions in Islamic Bank Stability: Evidence from QISMUT+3," Journal of Economics, Business and Management, vol. 14, no. 3, pp. 161-166, 2026.

Copyright © 2026 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

 

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