Studies in Systems, Decision and Control 503

Abdalmuttaleb M. A. Musleh Al-Sartawi

Anas Ali Al-Qudah
Fadi Shihadeh Editors

Artificial
Intelligence-Augmented
Digital Twins
Transforming Industrial Operations
for Innovation and Sustainability
Studies in Systems, Decision and Control

Volume 503

Series Editor
Janusz Kacprzyk, Systems Research Institute, Polish Academy of Sciences,
Warsaw, Poland
The series “Studies in Systems, Decision and Control” (SSDC) covers both new
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Abdalmuttaleb M. A. Musleh Al-Sartawi ·
Anas Ali Al-Qudah · Fadi Shihadeh
Editors

Artificial
Intelligence-Augmented
Digital Twins
Transforming Industrial Operations
for Innovation and Sustainability
Editors
Abdalmuttaleb M. A. Musleh Al-Sartawi Anas Ali Al-Qudah
College of Business and Finance Accounting and Finance
Ahlia University Liwa College of Technology
Manama, Bahrain Abu Dhabi, United Arab Emirates

Fadi Shihadeh
Department of Computerized Financial
and Banking Science, Business
and Economics Faculty
Palestine Technical University—Kadoori
Tulkarm, Palestine, State of

ISSN 2198-4182 ISSN 2198-4190 (electronic)

Studies in Systems, Decision and Control
ISBN 978-3-031-43489-1 ISBN 978-3-031-43490-7 (eBook)
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Preface

This publication focuses on the opportunities, challenges, and risks of Artifi-

cial Intelligence-augmented technologies for financial operations, innovation, and
sustainable development. It focuses on AI and other industry 4.0 technologies such as
digital twins and blockchain to furnish solutions for the current industrial revolution.
The purpose of this publication Artificial Intelligence-Augmented Digital Twins
is to cover novel advances and developments related to AI, digital twins, and other
industry 4.0 technologies mainly for organizations, education institutions, financial
institutions, and the banking and accounting sectors. Furthermore, it provides a plat-
form for multi-disciplinary research which we believe as editors enhances the vision
of researchers in their own fields.
This book includes 52 unique and multi-disciplinary chapters. Submissions were
reviewed in a double-blind process by scholars in the relevant fields. The authors in
this edited volume provide beneficial insights into different topics. Their research
and findings provide significant contributions to their respective disciplines. The
following are some topics of interest included but not limited to:
. The Actual Impact of Metaverse on the FinTech Industry
. Utilizing Deep Learning Models (RNN, LSTM, CNN-LSTM, and Bi-LSTM) for
Arabic Text Classification
. Metrics-Based Exploration and Assessment of Classification and Association
Rule Mining Techniques
. Data Mining Approaches for Depression Detection on Social Media Twitter
Dataset
. Exploring Business Faculty’s Perception about the Usefulness of Chatbots in
Higher Education
This comprehensive reference work is ideal for AI specialists, engineers, policy-
makers, industry leaders, scientists, academics, practitioners, researchers, instructors,
and postgraduate students. In addition, with regard to the academic discipline, the
book chapters could be used in several courses related to AI, digital business inno-
vation, marketing of financial services, big data, education, and online learning. We
do hope the publication will be beneficial for them.

v
vi Preface

On behalf of the editorial team, we are grateful and thankful to many people who
were involved in creating, writing, and developing this unique publication. First, we
would like to thank our reviewers for their valuable feedback and contributions which
have improved the chapters immensely. Second, we are grateful to our authors and
the authors who participated in ICGER 2022 for their contributions and cooperation
in making all the necessary changes to their chapters.

Manama, Bahrain Abdalmuttaleb M. A. Musleh Al-Sartawi

Abu Dhabi, United Arab Emirates Anas Ali Al-Qudah
Tulkarm, Palestine, State of Fadi Shihadeh
October 2023
Introduction

Artificial Intelligence, Digital twins, blockchain technologies, big data analytics, and
Internet of Things (IoT) are reconfiguring our perceptions of the world around us.
These Industry 4.0 technologies are currently disrupting our economy and trans-
forming the manner in which firms engage in their operations. Within this context,
researchers and professionals aim to advance industrial operations thought and prac-
tice by examining how challenges may be prevailed via a digital twin. Digital twin-
ning (DTW) is one of the top 10 technology trends in the last several years, due to
its high applicability in the industrial sector, with more than 50% of IoT companies’
teams having digital twin in their annual plan as a strategic mandate [2]. The integra-
tion of artificial intelligence and machine learning techniques with digital twinning,
further enriches its significance and research potential with new opportunities and
unique challenges. Historically, the digital twin concept was first presented in 2002
by Grieves et al. during a meeting at the University of Michigan Lurie Engineering
Center on the management of product life cycles [4]. In 2014, [3] further defined
digital twinning as a combination of three primary components: (1) a virtual twin; (2)
a physical and corresponding twin (a physical object that can be a human, a system,
a product, a model, or any other object such as a robot, a car, a power turbine, and a
hospital); and (3) a back and forth data flow cycle between the physical twin and its
virtual twin [3].
Digital Twinning aims to create a highly accurate virtual model of a physical
system or process to simulate system behavior, condition monitoring, detection of
abnormal patterns or errors, a reflection of system performance, and future trend
prediction, which is highly beneficial for various sectors such as finance, banking,
accounting, manufacturing, agriculture, and healthcare [5]. Moreover, it helps to map
between virtual and real-world resources, which can in turn support to identifying
known unknowns as well as also help to discover unknowns. More specifically,
advancements in Artificial Intelligence are transforming what they can do in the
fields of accounting, finance, and banking. DTW is also made increasingly more
intelligent by AI agents, to the point where it can prescribe actions in the physical
world, so that banks and other financial institutions can change, in real-time, with
fact-based choices, alternate processes to prevent bottlenecking issues for example.

vii
viii Introduction

By deploying both AI and DTW, banks and accounting firms can obtain insights
into their operations, allowing them to achieve significant benefits such as improved
efficiency, cost savings, and enhanced sustainable development efforts. Therefore,
DTWs are not only helping these firms to optimize operations and decision-making;
they also play a critical role in enabling them to realize their ESG roles. According to
the “Digital Twins: Adding Intelligence to the Real World” report from [1], 60% of
companies across various industries depend on digital twins as a catalyst to improve
operational performance as well as to fulfill their sustainability agenda. Therefore, by
replicating the physical world, digital twins can support companies to better utilize
resources, optimize supply and logistics networks, reduce carbon emissions, and
improve employee safety [1].
Academics and professionals worldwide are very interested in DTW and its inte-
gration with AI to provide solutions for organizations and sectors. This book provides
a discussion platform taking a contemporary approach to AI by linking it to other
Industry 4.0 technologies. It provides varied insights into various concepts of AI
and technologies, and their implications for businesses, financial institutions, and
educational institutions.

Abdalmuttaleb M. A. Musleh Al-Sartawi

Anas Ali Al-Qudah
Fadi Shihadeh

References

1. Capgemini Research Institute, 2022 https://www.capgemini.com/us-en/news/press-releases/

digital-twins-are-a-catalyst-to-fulfilling-organizations-sustainability-agenda/
2. M. M., Rathore, Shah, S. A., Shukla, D., Bentafat, E., & Bakiras, S. (2021). The role of ai,
machine learning, and big data in digital twinning: A systematic literature review, challenges,
and opportunities. IEEE Access, 9, 32030–32052
3. Grieves M.W., “Digital twin: Manufacturing excellence through virtual factory replication,”
White Paper, 2014, pp. 1–7, vol. 1
4. Grieves M.W., “Virtually intelligent product systems: Digital and physical twins,” Complex
Syst. Eng., Theory Pract., pp. 175–200, 2019
5. Fukawa, N., Rindfleisch, A., (2023). Enhancing Innovation Via the Digital Twin. Journal of
Prod. Innov. Manage. Wiley. The definitive version is available at https://doi.org/10.1111/jpim.
12655
Contents

Factors Affecting Artificial Intelligence-Enabled Virtual

Assistants Incorporation: A Case Study of the Students of Mass
Communication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Mohammad Habes, Saadia Anwar Pasha, Dina Naser Tahat,
Amjad Safori, Tahseen Sharadga, Ahmed Bakir, and Mousa Ajouz
Understanding Consumer Attitude and Behavior About
E-Commerce Platforms for Agricultural Products in India . . . . . . . . . . . . 13
Jolly Masih, Abhijit Bhagwat, Anurag Khare, and Dinesh Yadav
Antecedents and Consequences of Business Model Innovation:
A Theoretical Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Rani Shahwan, Mohammed An-Najjar, Abdulnaser Nour,
and Tabish Zaman
Financial Management Information System in Developing
Countries: A Review of Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Mahmoud Al-Kofahi, Dmaithan Abdelkarim Almajali,
Faraj Alfawareh, Manaf Al-Okaily, Bara’a Al-Kofahi,
and Abdalmuttaleb Al-Sartawi
How Can Higher Education Contribute to the 21st Century
Employability Skills Through Use of Collaborative Learning
Design in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Subhadra Ganguli
Innovation Through Computing Green Marketing and Its Effect
on Consumer Purchase Intention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Yashodhan Karulkar, Pashmin Bandorawalla, Atreyee Banerjee,
Ajitha Vasudevan, and Mahendra Parihar
The Actual Impact of Metaverse on the FinTech Industry . . . . . . . . . . . . . 85
Anas Ali Al-Qudah

ix
x Contents

The Nexus Between Blockchain, Crypto Currencies and AI: With

Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Mohamed Bechir Chenguel
The Advantages and Difficulties of Using AI and BT in the Auditing
Procedures: A Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Sajeda Abdel Rahman Hamdan and Abdullah Khaled Al Habashneh
Big Data Analytics and Its Impact on Corporate Sustainability
Disclosure in the Digital Era . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
Nahla Ibrahim and Abeer M. M. Abdelhalim
Fraud Auditing and Forensic Accounting a Review Paper . . . . . . . . . . . . . 145
Sarah Aqeel Abdul-Aziz Khalil Ebrahim and Abdalmuttaleb Al-Sartawi
FinTech Education: An Exploratory Study from the Point View
of Business Students . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Husain Alshraifa and Zakeya Sanad
Metrics-Based Exploration and Assessment of Classification
and Association Rule Mining Techniques: A Comprehensive Study . . . . . 171
Nouh Alhindawi
Do Green Human Resource Practices Affect Firm’s Performance:
The Case of the Telecommunication Companies in Bahrain . . . . . . . . . . . . 185
Abdullah Hamza Al-Hadrami, Muhammad Rizky Prima Sakti,
and Faisal Mohamed AlKhalifa
Data Mining Approaches for Depression Detection on Social
Media Twitter Dataset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199
Yasmeen Walid Abuhasirah
Cybersecurity and Forensic Accounting a Literature Review . . . . . . . . . . 219
Ghazwa Mohamed Mejeran and Abdalmuttaleb Al-Sartawi
Exploring Business Faculty’s Perception About the Usefulness
of Chatbots in Higher Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
Fatimah Al Shakhoor, Raghad Alnakal, Osama Mohamed,
and Zakeya Sanad
Electronic Fraud in the Age of Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . 245
Mariam Al-Zain and Abdalmuttaleb Al-Sartawi
The Level of Students’ Satisfaction with Their Academic
Performance in e-learning Through Learning Platforms . . . . . . . . . . . . . . 253
Samia Mousa Mosleh, Abdul Rahman Afzal, and Rawan Siaj Jubeh
Contents xi

International Accounting Standards Technique: Need of Related

Party Disclosures (IAS 24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265
Adel Sarea, Azam Abdelhakeem Khalid, Zakir Hossen Shaikh,
Amira Kaddour, Ahmad Mohammad Obeid Gharaibeh,
and Ahmad Rafiki
The Impact of Applying the Elements of Administrative Creativity
in Improving the Quality of Services in the Ministry of Education
Center: A Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273
Majed Abdul-Mahdi Massada, Enas Bashir Fayez Al-Badr,
Mohammad Kanan, Hala Alsabatin, and Imad AlZeer
Utilizing Deep Learning Models (RNN, LSTM, CNN-LSTM,
and Bi-LSTM) for Arabic Text Classification . . . . . . . . . . . . . . . . . . . . . . . . . 287
Ahmad Al-Qerem, Mohammed Raja, Sameh Taqatqa,
and Mutaz Rsmi Abu Sara
Forensic Accounting and Big Data a Literature Paper . . . . . . . . . . . . . . . . . 303
Dana Kayed and Abdalmuttaleb Al-Sartawi
Agriculture Insurance: A Panacea for the Development
of the Agriculture Sector in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313
Bijin Philip
The Impacts of COVID-19 on the Jordanian Economy: Evidence
from the Middle East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321
Mahmoud Al-Kofahi, Faraj Alfawareh, Aws Al-Okaily,
Abdalmuttaleb Al-Sartawi, Manaf Al-Okaily, and Hamza Alqudah
Innovation and Creativity an Important Ingredient in the Future
Growth and Sustainability of SMEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341
Saad Darwish, Vannie Nadoo, and Umair Ahmed
The Mediating Effect of the Organizational Commitment
on the Association Between Employees’ Empowerment
and the Quality of Municipal Services in Jordan . . . . . . . . . . . . . . . . . . . . . . 359
Mohammad M. Taamneh, Reema Matarneh, and Manaf Al-Okaily
The Importance and Trends of Digital Economy During COVID
19 Crisis: UAE Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375
Myriam Aloulou
Enhancing the Security of Sensitive Data in Cloud Using Enhanced
Cryptographic Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 387
Roshan Kumar Gupta, Hemraj Shobharam Lamkuche, and Suneel Prasad
Female Influencers: Examining Bahraini Social Media’s Portrayal
of Female Subjectivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401
Layla Faisal Alhalwachi
xii Contents

Does COVID-19 Have a Significant Impact on Digital Finance?

Analysis of Indian Digital Payment System . . . . . . . . . . . . . . . . . . . . . . . . . . 419
Mohammad Irfan, Zakir Hossen Shaikh, Rohit Singh, Adel Sarea,
and Sonali Dhimmar
Literature Review for Educational Data Mining Systems—Fahad
Bin Sultan University Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435
Abdullah M. Barakeh, Mohammad A. Mezher, and Banan A. Alharbi
Social Factors Affecting Customers’ Orientation to Islamic Banks . . . . . 455
Amjad Alkhatib, Majed Alshrouf, Mohammad Shadid, Imad AlZeer,
Mousa Ajouz, Nidal Al-ramahi, and Rua Binsaddig
Impact of Business Analytics and Innovation on Firm Performance . . . . 469
Irfan Abdul Karim Shaikh
Technological Protection Measures and Their Role in Protecting
Digital Works . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481
Omar Al-Makhzoumi, Jaber Al-Ghayathin, Algaily AlTayeb,
and Ali Abu Maria
Forensic Accounting and the Auditing of the Digital Banking . . . . . . . . . . 491
Walaa Abdulla Alaaris and Abdalmuttaleb Al-Sartawi
The Reflection of Applying Accrual Basis in Enhancing
Transparency and Accountability in the Jordanian Public Sector . . . . . . 501
Sanaa Maswadeh and Mahmoud Ababneh
ESG Performance and Tax Avoidance: The Case of the Jordanian
Capital Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513
Ayman Ahmad Abu Haija
The Impact of Digital Marketing on SME’s Growth and Success
as a Tool of Marketing Communication: A Case Study in Bahrain
After the Pandemic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 523
Layla Alhalwachi, Eman Askar, and Amir Zaidan
The Concept of Ijarah and Ijarah Muntahia Bittamleek
in Sudanese Islamic Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 541
Omer Eisa Omer Fadul, Yousif Abdelbagi Abdalla, Adel Sarea,
and Azam Abdelhakeem Khalid
Antecedents of User Satisfaction in the Context of Accounting
Information Systems: A Proposed Framework . . . . . . . . . . . . . . . . . . . . . . . 551
Mahmoud Al-Kofahi, Aws Al-Okaily,
Mohammad Enaizan Al-Sharairi, Abdalmuttaleb Al-Sartawi,
Manaf Al-Okaily, and Hamza Alqudah
Consequences of Fintech on the Profitability of Banking System . . . . . . . 563
Samer Abdelhadi and Ala’ Bashayreh
Contents xiii

The Effect of Voluntary Disclosure on Stock Liquidity: Evidence

from Jordan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 571
Mohammad Abu Nassar and Zaina Safwan Rahahleh
Forensic Accounting in the Age of Financial Technology . . . . . . . . . . . . . . . 591
Zainab Abdulla Alaaris and Abdalmuttaleb Al-Sartawi
The Performance of Internal Shariah Auditor in Islamic Financial
Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 599
Azam Abdelhakeem Khalid, Adel Sarea, and Zaroug Osman Bilal
Real or Virtual: About the Future of Education . . . . . . . . . . . . . . . . . . . . . . 611
Ismail Noori Mseer and Kholod Aggad
The Impact of Earnings Management on the Value Relevance
of Earnings: Empirical Evidence From Jordan . . . . . . . . . . . . . . . . . . . . . . . 619
Marwa Rawashdeh, Mahmoud AlKhalailah, and Hala Zaidan
A Journey Towards Restfulness or Restlessness: An Inquiry
into the Impact of Online Education in Working Women Parents . . . . . . 629
M. Shashi Kumar, A. Minu, Joshy Mathew, J. Chandrakhanthan,
and R. Karthika
Investigating the Impact of COVID-19 on Organizational
Performance the Case of Sappi Saiccor in Kwazulu-Natal . . . . . . . . . . . . . 637
Kusangiphila Kenson Sishi, Vannie Naidoo, and Saad Darwish
Traditional Human Duties and the Challenges of Digitization . . . . . . . . . . 651
Ismail Noori Mseer and Nadra Tawfig
Assessment of the Challenges and Benefits of Implementing
International Public Sector Accounting Standards (IPSAS)
in Jordan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 657
Alaa Khrais, Mohammad Abu Nassar, and Hala Zaidan
The Emergence of Islamic Fintech and Bahrain: Prospect
for Global Financial Sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 669
Zakir Shaikh, Mohammad Irfan, Adel Sarea,
and Rashmi Ranjan Panigrahi
Factors Affecting Artificial
Intelligence-Enabled Virtual Assistants
Incorporation: A Case Study
of the Students of Mass Communication

Mohammad Habes , Saadia Anwar Pasha , Dina Naser Tahat ,

Amjad Safori , Tahseen Sharadga, Ahmed Bakir, and Mousa Ajouz

Abstract Evolving technology has facilitated our lives in a variety of ways. Espe-
cially, Artificial Intelligence-enabled virtual assistants play a significant role in
managing multimedia files in smart devices, including laptops and computers. This
research focused on multimedia file management in Cortana-facilitated laptops and
personal computers used by university students in Pakistan. The researchers used
Structural Equation Modelling to test the proposed conceptual model supported by
the theory of reasoned action. Data was gathered from n = 290 students from n = 2
public sector universities in Islamabad, Pakistan. Results revealed that Beliefs about
Artificial Intelligence are significantly affecting Behavioral Intention (p > 0.053),
leading to Cortana Acceptance (p > 0.000). However, the relevant effects are also

M. Habes
Yarmouk University, Irbid, Jordan
e-mail: [email protected]
S. A. Pasha
Allama Iqbal Open University, Islamabad, Pakistan
e-mail: [email protected]
D. N. Tahat
Applied Sociology Department, Al-Ain University, Al-Ain, UAE
e-mail: [email protected]
A. Safori · T. Sharadga
Zarqa University, Zarqa, Jordan
e-mail: [email protected]
T. Sharadga
e-mail: [email protected]
A. Bakir (B)
Communication Department, University of Business and Technology, Jeddah, Saudi Arabia
e-mail: [email protected]
M. Ajouz
Ahliya University, Bethlehem 1041, Palestine
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 1

A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_1
2 M. Habes et al.

mediated by the Atttuides (p > 0.0001) and Subjective Norms (p > 0.023) to affirm the
effect of Artificial Intelligence on the Cortana Acceptance. Thus, virtual assistants
have become a mainstream product and are accepted by many users due to the useful
outcomes attributed to their adoption. They provide maximum benefits to their users,
indicating their design and implementation as linked with gratifying human needs
in the best possible manner. Hence, this research adds to the literature regarding
technology acceptance and the theory of reasoned action in Artificial Intelligence.
Finally, the researchers have highlighted the study limitations and discussed practical
and theoretical implications accordingly.

Keywords Artificial intelligence · Theory of reasoned action · Pakistan ·

Structural equation modelling

1 Introduction

Technology has significantly impacted our lives, including education, communi-

cation, information gathering, and entertainment. Alhumaid et al. [1] provide an
example of how Artificial Intelligence (AI) has enhanced students’ learning expe-
riences through mobile learning applications. Another example is the implementa-
tion of AI in Learning Management Systems, where multimedia applications attract
and engage students, improving their educational journey [2]. Additionally, AI has
benefited students through content recommendation systems on social networks like
YouTube, helping them find relevant educational material [3–6].
Virtual assistants powered by AI, such as Cortana, have played a crucial role in
assisting students in various ways. Students often face challenges managing their files
on devices, and virtual assistants provide support for file management and control
[7–10]. Cortana considered a next-generation virtual assistant by Habes et al. [11],
mainly benefits students in digital document management. As early adopters of tech-
nology, the young generation receives significant advantages from AI technologies
integrated into their devices. Virtual assistants like Cortana utilize various commu-
nication gestures, including speech, images, videos, and other forms, to enhance
human-computer interaction and maximize user benefits [5, 12–16].
This chapter emphasizes Cortana as a leading technological advancement [17],
explicitly benefiting university-level Mass Communication students in Pakistan. The
chapter is divided into sections, including an introduction, the citation of supportive
literature to propose study hypotheses and a conceptual model, methodological
approaches, and results and data analysis, followed by a relevant discussion.
Overall, technology, particularly AI, has transformed the educational experi-
ences of students, and virtual assistants like Cortana have become essential tools
for students in managing their tasks, files, and interactions, leading to enhanced
learning outcomes and improved efficiency in various educational contexts. The
chapter comprehensively explores these advancements and their impact on young
university-level Mass Communication students in Pakistan.
Factors Affecting Artificial Intelligence-Enabled Virtual Assistants … 3

2 Literature Review and Hypotheses Development

The theory of Reasoned Action, proposed by Vallerand et al. [18], is relevant to the
conceptual model of the current research. This theory suggests that attitudes and
behavioral patterns are connected in human decision-making processes. Trafimow
[19] supports this idea by stating that our decisions to engage in specific behaviors are
primarily influenced by expected outcomes [20–24]. The Theory of Reasoned Action
aligns with this perspective, as [19] also emphasize that the acceptance and use of
virtual assistants, like Cortana, are driven by perceived benefits associated with their
usage. Cortana, a powerful virtual assistant providing voice command services for
Windows 10 users, has been developed with multiple user benefits in mind, which has
generated increased interest in its adoption [25–28]. A study conducted by Pasha et al.
[2] further supports the significance of attitudinal and behavioral factors in the accep-
tance and utilization of AI-enabled intelligent assistant systems [29] Their findings,
obtained through a case study approach, demonstrate that behavioral and attitudinal
factors significantly influence the process of AI acceptance and implementation.

2.1 Beliefs About Artificial Intelligence and Behavioral

Intention

A virtual assistant is a technological application that understands commands and

ensures task completion. These virtual assistants are provided on multimedia remote
devices, including laptops, personal computers, smart watches, mobile phones, and
others [14]. According to Jönsson [14], one of the primary reasons behind the adop-
tion of smart devices such as laptops is that these virtual assistants are pre-installed
and help the users to save different types of content and find them whenever they
want. Accompanied by the ease of use and increased accessibility, virtual assistants
like Cortana, Alexa, Siri, and others are widely preferred by users to manage and
keep their files saved on a device. These virtual assistants recognize voice commands.
They combine computer chips, software, and microphones that act upon the users’
commands and recognize and respond to them efficiently [20, 21].
H1: Beliefs about Artificial Intelligence have a significant effect on Behavioral
Intention.

2.2 Behavioural Intention and Cortana Acceptance

Technological advancements such as virtual assistance through Artificial Intelligence

have gained much popularity during the past few years. These assistants are embodied
or disembodied agents that allow machine-user interaction in a natural language [22].
Students use these digital technologies to facilitate their every educational task [17,
4 M. Habes et al.

30, 31]. Virtual assistants such as Cortana by Microsoft are mainly preferred when
documents and other multimedia files are saved on a computer. Being one of the most
preferred cloud systems, Cortana is of greater significance. Data files are just available
just a single click away. That is why, today, even higher education institutions are
interested in guiding and supporting students to use virtual assistants like Cortana to
manage their data files [25].
H2: Behavioral Intention has a significant effect on Cortana Acceptance.

2.3 Attitude, Beliefs About Artificial Intelligence

and Behavioral Intention

Today, Cortana is considered one of the most effective virtual assistants by IBM.
That also saves a system that ensures safety from any potential malware attacks.
According to Thakur and Han [25], introducing Cortana in Windows 10 ensures
maximum user facility and satisfaction. Students, for example, pay special attention
to user Cortana when saving several documents and other multimedia files. These files
are saved on the cloud system, which further manages their content and provides them
immediately when needed. This record-keeping capability of Cortana in Windows
10 distinguishes it from other versions of windows, further adding to the relative
advantage of products and software developed by the relevant company [28].
H3: Attitude significantly mediates the relationship between beliefs about artificial
intelligence and behavioral intention.

2.4 Subjective Norms, Behavioral Intention, and Cortana

Acceptance

Cortana Acceptance can be considered a part of subjective Norms where Windows

10 users prefer using Cortana by watching others. Although virtual assistance like
Cortana is available almost with every smart device, its usage varies from person to
person [24]. According to Na et al. [32], the young generation specializes in having an
AI-enabled virtual assistant. Soft Copies of their documents, images, videos, audio
files, and others are needed to save on cloud storage. This cloud storage helps them
save their files and search and provides them with a single voice command. Based
on the benefits and services attributed to Cortana, windows10 widely prefers using
Cortana, enjoys online multimedia file management, sharing their experiences, and
inspiring others to adopt and use Cortana [19] (Fig. 1).
H4: Subjective norms significantly mediate the relationship between behavioral
intention and Cortana acceptance.
Factors Affecting Artificial Intelligence-Enabled Virtual Assistants … 5

Fig. 1 Conceptual model

3 Methods

This research is based on a cross-sectional design, including data collection during

a short, limited period. The researchers used structured questionnaires for data-
gathering purposes. As noted, questionnaires help gather data directly from the
respondents having a primary experience of a phenomenon [33]. Notably, the survey
tool is designed by adopting scales from different resources (See Table 1). After
data gathering, the researchers used SPSS and Amos 23 for the Structural Equation
Modelling (SEM) [34].

3.1 Study Population and Sampling

The current research focuses on university students in Pakistan, specifically targeting

a sample size of 300 students from two public sector universities in Islamabad,
the Federal Capital City. The selected sample size aligns with the recommended
minimum size of 200 individuals for Structural Equation Modeling (SEM) studies
[50]. Convenience sampling was employed to select the participants, with the
researchers verbally confirming their use of Windows 10 before proceeding with data
collection [12]. The response rate for the research was 96.6%, with 3.4% of ques-
tionnaires eliminated due to missing or incorrect responses. Ethical considerations
were considered, as the researchers provided informed consent to the participants by
sharing essential details about the research topic, methods, and significance [51].

Table 1 Sources of survey

S/R Variables Sources
items
1 Beleifs about AI [29, 35–37]
2 Behavioral Intention [10, 38, 39]
3 Windows 10 [40–43]
4 Subjective norm [8, 44, 45]
5 Cortana acceptance [46–49]
6 M. Habes et al.

4 Data Analysis and Results

The researchers conducted the convergent validity analysis to examine the research
constructs’ internal consistency, as [52] suggested. In this regard, the researchers
first calculated the Factor Loading and Average Variance Extracted values. Results
revealed that most of the Factor Loading values surpass the threshold value of 0.5.
Besides, the Average Variance Extracted surpasses the threshold value of 0.5 [34, 53].
Furthermore, the researchers examined the construct reliability of the measurement
model. Results showed that the Cronbach Alpha values range from 0.721 to 0.875,
and composite reliability values range from 0.714 to 0.926, surpassing the threshold
value of 0.7 [18]. Thus, it is found that the convergent validity of the measurement
model is successfully established (see Table 2).
According to Refs. [54–57] there are two criterion-based approaches to assessing
the discriminant validity of the measurement model. These criteria involve
Fornell-Larcker and Heterotrait-Monotrait Ratio scale. In the current research,
the researchers also used both criteria to examine the discriminant validity of the
measurement model. First, regarding the Fornell-Locker criterion, the squares of all
the Average Vraince Extartced values are greater than the correlation values given
in Table 3. Further, the researcher calculated the Heterotrait-Monotrait Ratio of
the measurement model. Results revealed that the HTMT value at 0.653 is smaller
than the designated value of 0.90, indicating that the discriminant validity of the
measurement model is affirmed [56].

Table 2 Summary of convergent validity analysis

Variables Items FL AVE CA CR
Beliefs about AI BLF1 0.558 0.687 0.739 0.714
BLF2 0.817
BLF3 −0.062
Behavioral intention BHN1 0.905 0.933 0.875 0.709
BHN2 0.902
BHN3 0.994
Cortana acceptance COR1 0.809 0.659 0.822 0.820
COR2 0.510
COR3 −0.168
Attitude ATD1 0.841 0.757 0.792 0.926
ATD 2 0.674
ATD 3 0.413
Subjective norm SBN1 0.994 0.950 0.721 0.862
SBN2 0.076
SBN3 0.907
Factors Affecting Artificial Intelligence-Enabled Virtual Assistants … 7

Table 3 Fornel-Larcker criterion

BLF BHN COR AND SBN
BLF 0.471
BHN 0.258 0.870
COR 0.227 0.125 0.434
AND 0.035 −0.045 0.418 0.573
SBN −0.109 0.778 0.013 0.074 0.902

Fig. 2 Goodness of fit

4.1 Goodness of Fit

Goodness of Fit helps determine the extent to which the gathered data fits the expected
observation [58]. Being one of the most important steps in Structural Equation
Modelling, this research also involves the Goodness of Fit. Thus, the calculation
indicated a chi-square value of −3.485 (18) and a non-probability level at 0.001,
along with the Fit Index (FMIN) value at 0.915 and Standardized Root Mean Square
(RMSEA) value of 0.754. We found that the sample data fit the expected set of data.
Figure 2 illustrates the graphical representation of the Goodness of Fit.

4.2 Hypotheses Testing

Finally, the researcher examined the structural relationships proposed between the
study variables by conducting path analysis, including regression weights. As noted
by Zumbo [54], despite regression analysis helping to determine the relationships
8 M. Habes et al.

Table 4 Summary of hypotheses testing

Hyp Relationships Path t-value Sign
H1 BLF > BHN 0.344 1.593 0.053
H2 BHN > COR 0.573 11.764 ***
S/R Relationships Path Indirect effects Sign
H3 BLF > ATD > BHN 0.123 3.212 0.001
H4 BHN > SBN > COR −0.066 −2.269 0.023

between study variables, path analysis is an effective technique. Through path anal-
ysis, the researchers not only determine the significance of the proposed relationships
but also examine the strength of the relationships through path assessment. Thus, path
analysis in the current research validated all the research propositions. As shown in
Table 4, the researchers proposed a significant effect of (H1) Beliefs about Artificial
Intelligence and Behavioral Intelligence. Path analysis validated the effect of Beliefs
about Artificial Intelligence and Behavioral Intention with a t-value of 1.593 and
a significance value of p > 0.053. In the H2 of the study, the researchers proposed
a significant effect of Behavioral Intention on Cortana Acceptance. Findings vali-
dated the proposed hypotheses with a t-value of 11.764 and a significance value of p >
0.000. Further, the researchers conducted a mediation analysis to examine the indirect
effects of Attitude and Subjective Norms on the relationship between Beliefs about
Artificial Intelligence and Behavioral Intention (H3) and the relationship between
Behavioral Intention on Cortana Acceptance (H4). The researcher uses path analysis
and the Sobel test to examine the proposed hypotheses. First, the indirect effect of
Attitude on the relationship between Beliefs about Artificial Intelligence remained
significant, with the path value at 0.123 and significance value at p > 0.001 (Indirect
effect value 3.212). Besides, the proposed indirect effect of Subjective Norms on the
relationship between Behavioral Intention and Cortana Acceptance also remained
significant, with the path value at −0.066 and the significance value at p > 0.023.
Therefore, the findings revealed that the students of mass communication in the
selected institutions accepted Cortana as they have positive beliefs about its usage,
which is well witnessed by Vallerand et al. [18]. Additionally, the acceptance behavior
is significantly mediated by their Attitudes and Subjective Norms, as also validated
by [28].

5 Discussion

According to Ali et al. [58], despite technology acceptance and incorporation

having remained comparatively low in Pakistan, the young generation has shown
an increased interest in it. Especially when it is about ease of use and usefulness,
this study also witnessed Cortana as a virtual assistant accepted and used among the
Young Pakistan students of Mass Communication under the propositions given by
Factors Affecting Artificial Intelligence-Enabled Virtual Assistants … 9

Vallerand et al. [18]. As noted by Ajouz et al. [59], intelligent virtual assistants have
become a mainstream product. Many users accept them due to the useful outcomes
of their adoption as a part of technology evolution. They provide maximum benefits
to their users, indicating their design and implementation as linked with gratifying
human needs in the best possible manner [60].
Talking particularly about the study hypotheses, the first statement, "Beliefs about
Artificial Intelligence have a significant effect on Behavioral Intention," the theme
was focused on investigating the students’ general opinion about Artificial, Cortana,
and its usage. Respondents agreed that they consider Artificial Intelligence facili-
tating them in multiple ways [61]. They also agreed that Cortana is widely used and
preferred due to its performance and multimedia file management system. Regarding
the second hypothesis, “Behavioral Intention has a significant effect on Cortana
Acceptance,” the respondents were asked about their behavior towards Cortana as a
virtual assistant, using this assistant on their personal computers and other remote
devices, and their overall experience of using Cortana. Study respondents should
strongly agree with Cortana’s usability for their educational record management
purposes. They also revealed that they consider Cortana an important approach,
which is why they widely use Cortana in their computer systems. Besides, they indi-
cated appositive experience attributed to their Cortana usage, ease of use, and useful
outcomes.
In the third hypothesis, “Attitude significantly mediates the relationship between
beliefs about artificial intelligence and behavioral intention,” the respondents were
asked about the role of their Attitudes, opinion, beliefs, and convictions in Cortana
usage. Most respondents agreed that their attitudes, beliefs, and opinions are positive
about Cortana usage and applicability for managing their educational tasks [25]. The
respondents indicated their attitudes as influential when deciding to use Cortana for
their documents and multimedia file management purposes. Finally, the last hypoth-
esis, “Subjective norms significantly mediate the relationship between behavioral
intention and Cortana acceptance”. The study respondents agreed that subjective
norms also strongly affect their Cortana (AI-based) acceptance. According to the
respondents, their peers, friends, and teachers using Cortana also affect their attitudes
toward adopting the relevant virtual assistant.
To sum up, the results indicated consistency with the existing studies witnessing
the acceptance and incorporation of Artificial Intelligence and Virtual Assistants for
multimedia file management in smart devices [19, 21, 24, 41, 46–51, 62]. The study
respondents widely agreed that using the relevant virtual assistants is primarily due to
their beliefs about its easy usage and offering convivence regarding file management
functions [2]. Most respondents revealed that their positive beliefs further led to
changes in their behavior and motivated them to adopt the AI-enabled, resulting in
an instant adoption process. However, their attitudes remain a significant factor in
their behavior toward adopting and using these virtual assistants.
10 M. Habes et al.

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Understanding Consumer Attitude
and Behavior About E-Commerce
Platforms for Agricultural Products
in India

Jolly Masih , Abhijit Bhagwat, Anurag Khare, and Dinesh Yadav

Abstract India is primarily an agricultural land, but the concept of E-agribusiness

is not very popular in the country. However, with the growing popularity of E-
commerce, people are now shifting towards E-agriculture for purchase of Agri-inputs
like fertilizer, seed, plant protection chemicals etc. Online purchase of agriculture
machinery and equipment has also gained momentum in the last few years. The
research focuses on the profile of customers who shop the Agri-products based on
various dimensions of online shopping as well as their demographic characteris-
tics. The data collected has been analyzed based on stepwise cluster analysis and
their profiles have been identified based on the results. Basically, four clusters of
shoppers which are identified namely surgical shoppers-giving more importance to
merchandise information and reliability attributes of online shopping; digitally driven
shoppers-concerned about convenience and interactivity attributes; power shoppers-
have more inclination towards navigation attribute; and reluctant shoppers- more
affected by navigation and reliability attributes. Other than this promotions attribute
which includes discounts, free gifts, attractive packaging, and combo packs is equally
important for all the customers expect reluctant shoppers. Similarly design attributes
which include colors, borders, graphics, pictures, styles, and fonts are also equally
preferred by all shoppers except shoppers who belong to the reluctant shoppers. The
present study aims to understand online consumer shopping behavior patterns for
agriculture products to make the E-agribusiness stronger and more prominent in the
country.

Keywords Agricultural E-commerce · Digitally driven shopper · B2B

E-commerce

J. Masih (B) · A. Bhagwat · A. Khare · D. Yadav

Symbiosis University of Applied Sciences, Indore 453112, India
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 13

A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_2
14 J. Masih et al.

1 Introduction

1.1 Agribusiness Making Its Way to E-Commerce

It is assumed that e-commerce has a lot of potential for growth in regards of both
consumers and businesses alike, however its progress in India is still at a rudimentary
stage in respect to the highly developed countries. E-commerce is concerned with
the operational functioning of a variety of enterprises including agricultural business
[1]. In India, we can find two key aspects of development for B2B e-commerce
in agribusiness. First, the conventional enterprises of agri-food chain employ e-
commerce solutions to fortify their market position and to enhance the existing
functions. Second, is the emergence of new companies who are trying to gain benefit
from the fragmented niche agricultural markets [2–5].

1.2 E-Commerce’s Value Creation in Agribusiness

E-commerce’s value in formation of agricultural and food markets will be most

fruitful when the e-commerce firms operate effectively throughout the supply chain
system. The major issue is that the e-commerce firms, have faced many obstacles
in staying in business especially due to seasonal and perishable nature of agricul-
tural commodities [3, 4]. The aim of this research study is to identify customer
clusters or characteristics that are linked with successful adoption of e-commerce
firms along the agricultural and food supply chain. Pertinent e-commerce and agri-
cultural e-commerce literature suggests a series of characteristics that are respon-
sible for the success of agricultural and food ecommerce firms [4–7]. Agricultural
e-commerce presents a unique challenge when using the specified taxonomy to
categorize it accordingly, since a farm or any type of agricultural production is a
business, but also at the same time presents characteristics of market power such
as price taking behavior which is most generally associated with consumers. Few
studies have classified agricultural initiatives into four categories: content providers,
agribusiness-to-grower, agribusiness-to-agribusiness, and commodity futures and
derivatives markets. As information costs go down, as commonly observed with e-
commerce, several outcomes may occur. Consumers will have the ability and freedom
to make direct purchases from manufacturers [5, 6]. In E-agribusiness vertical inte-
gration is of less importance, consequently causing participation of more firms with
a higher niche marketing or specialization and outsourcing. Business-to-business
e-commerce enhances the performance of the supply chain by lowering inventory
levels, transportation costs, and order to delivery lead time. E-commerce will revo-
lutionize the marketplace not only by lowering the cost of logistics but also by
deterring market thinness and facilitating liquidity. These alterations will prompt
firms to reorganize and thus increase productivity gains [6, 8].
Understanding Consumer Attitude and Behavior About E-Commerce … 15

1.3 Challenges of E-Agribusiness

E-Agribusiness can be termed as E-Business that specializes in agricultural goods

or services. Typical seasonal aspects of the agricultural sector and its participants
may cause some inherent obstacles to the enforcement of E-Business practices [7,
8]. Opposition to the evolving business practices, old tradition, and lack of a sense of
familiarity with current technology may be a significant issue in agricultural sectors.
Similarly, management traditions may make swift development and execution of
new business models and strategies more tedious for agricultural firms compared to
businesses in other industries. Place, industry structure and participant demographics
are also limiting factors. All these raise many essential questions for discussion [8, 9].
Some researchers presume that niche products (e.g., specialty crops and locally
processed foods) from agriculture can be sent for direct consumption on the online
market. Consumers looking for high-end agriculture produce these days are looking
for fresh products online (e.g., at Nature’s Basket) [9]. None the less, customer’s
innate need to physically inspect the products before purchasing will be a persistent
challenge to some E-Agribusiness for the foreseeable future [10–12].

1.4 Positive Impact of E-Agribusiness on Socio-economic

Status of Farmers

The launch of the mobile app “Kisan Suvidha” by Prime Minister Narendra Modi is
expected to gain significant popularity and potentially bring about a transformative
impact on Indian agriculture. India possesses the second-largest smartphone market
globally, with 87 million rural mobile internet users. Furthermore, as agriculture is
the backbone of the Indian economy, employing over 60% of the workforce, the app
is anticipated to attract a large user base and revolutionize the agricultural sector in
India [11]. The Government of India is also taking proactive measures to address the
unfulfilled requirements of farmers throughout the agricultural value chain. These
initiatives include schemes like the Soil Health Card Scheme, Parapargat Krishi Vikas
Yojana, National e-Governance Plan (NeGP), m-Kisan, and more [12–17].
The present study aims to understand online consumer shopping behavior patterns
for agriculture products to make the E-agribusiness stronger and more prominent in
the country. The objective of the study is to form the clusters of respondents partici-
pating in the study according to their shopping behavior in relation to E-agribusiness.
16 J. Masih et al.

2 Methodology

The study was conducted in Jaipur district of Rajasthan, India. Survey questionnaires
were distributed to visitors visiting a Flower exhibition at Jawahar Kala Kendra orga-
nized by Kitchen Garden association, Jaipur, Rajasthan, India. All the primary infor-
mation was gathered through a well-defined questionnaire and an in-depth interview
of 100 respondents.
A stepwise cluster analysis method was applied to cluster the respondents based
on the attributes of online shopping. These attributes were measured on a metric
scale. Although this method works on both categorical and continuous variables,
only continuous variables have been considered for this analysis. The exploration
of natural groupings (clusters) through this method is based on a certain algorithm.
This method used the Euclidean distance measure to assess the distance between
two clusters. Akaike’s Information Criterion (AIC) has been used to determine the
number of clusters and goodness of fit of clusters formed. Interpretation of clusters
was done based on attributes of online shopping. In the next stage, cluster profiles
were obtained by cross tabulating the cluster membership with the demographic
variables.

3 Analysis, Results and Discussion

A two-step cluster analysis was applied on the data collected from the primary survey.
The variables considered were the opinion of the respondents on various attributes of
online shopping in case of agri-business products. These attributes were Merchan-
dise, Convenience, Interactivity, Navigation, Reliability, Promotions, and Design.
They all were measured on the metric scale. The AIC values in the Auto-Clustering
table suggest a four-cluster solution because at cluster four, AIC value shows a change
in values i.e. the values are decreasing and suddenly it shows an increasing trend after
cluster 4. Thus, a four-cluster solution is found to be most appropriate.
The goodness of fit of the model obtained by the AIC techniques is given in
Table 1.
Table 1 and Fig. 1 reveals the likelihood of two things; first, whether there are
distinct clusters and second, the statistical significance of the results obtained. The
AIC method results in a coefficient that ranges from −1.0 to +1.0. However, for all
practical purposes, a coefficient that ranges from −0.5 to +1.0 is acceptable and a
good solution. The AIC method establishes that there are four distinct clusters. There
is also ‘good’ cohesion within the obtained clusters and ‘good’ difference between
them.
Table 2 represents the cluster distribution. There are 15 numbers of cases each in
cluster 1, 2 and 4 except in cluster 3 there are 55 numbers of cases.
Understanding Consumer Attitude and Behavior About E-Commerce … 17

Table 1 Auto-clustering
Number of clusters Akaike’s AIC change Ratio of AIC Ratio of distance
information changes measures
criterion (AIC)
1 509.694
2 435.628 −74.066 1.000 1.011
3 354.206 −81.422 1.099 1.317
4 307.301 −46.905 0.633 1.179
5 311.513 4.212 −0.057 1.080
6 265.021 −46.492 0.628 1.076
7 266.151 1.130 −0.015 1.262
8 268.635 2.484 −0.034 0.949
9 284.989 16.354 −0.221 2.074
10 304.177 19.188 −0.259 1.008
11 319.131 14.954 −0.202 1.185
12 336.000 16.869 −0.228 1.369

Fig. 1 Model summary

3.1 Interpretation of Clusters

For interpreting the clusters, the clusters centroids are examined. The cluster centroid
based on above mentioned seven variables are given in Table 3.
18 J. Masih et al.

Table 2 Cluster distribution

N Percentage of combined Percentage of total
Cluster 1 15 15.0 15.0
2 15 15.0 15.0
3 55 55.0 55.0
4 15 15.0 15.0
Combined 100 100.0 100.0
Total 100 100.0

It is apparent from the table that the Promotions attribute which includes discounts,
free gifts, attractive packaging, and combo packs is equally important for all the
customers but will be more preferred by cluster 4 customers. Similarly Design
attributes which include colors, borders, graphics, pictures, styles and fonts are also
equally preferred by all customers except customer who belongs to cluster 4. The
following are the characteristics of customers of various clusters based on Table 3.
1. The customers of cluster 1 give more importance to Merchandise information
such as product information, assortment, and price. They also have a positive
attitude towards Reliability attribute which includes company information, trans-
action security and privacy policies. They have low importance to convenience
and interactivity. Hence this cluster is named as the Surgical Shoppers.
2. The customers of cluster 2 are more concerned about Convenience and Inter-
activity attributes. Convenience includes timely delivery, ease of ordering and
product display. Interactivity includes customer support and improved search
functions. Hence this cluster is named Digitally Driven Shoppers.
3. The customers of cluster 3 have more inclination towards Navigation attribute
which include time to load home pages, expected waiting time to download pages
of the site and waiting information. This cluster is named the Power Shoppers.
4. The customers of cluster 4 are less concerned about the Merchandise, Conve-
nience and Design attributes but are more affected by Navigation and Reliability
attributes. Hence this cluster is named the Reluctant Shoppers.
Thus, cluster 1 and 2 customers may comprise of those customers who prefer high-
quality agriculture produce and will look for fresh products online [9, 18–21].
Business-to-business e-commerce improves supply chain performance and
E-commerce also will restructure the marketplace which will promote firms’
reorganization and thus further productivity gains [6, 22–25]. Improved reliability
and navigation can influence the choices of the customers belonging to cluster 4.
Table 3 Centroids
Cluster Merchandise Convenience Interactivity Navigation Reliability Promotions Design
Mean Std. dev. Mean Std. dev. Mean Std. dev. Mean Std. dev. Mean Std. dev. Mean Std. dev. Mean Std. dev.
1 3.6667 0.48795 1.3333 0.48795 1.6667 0.48795 4.0000 1.46385 7.0000 0.00000 5.6667 0.48795 5.6667 0.97590
2 2.3333 0.48795 4.0000 0.00000 5.0000 0.00000 1.0000 0.00000 2.6667 0.48795 6.3333 0.48795 6.6667 0.48795
3 1.5455 0.50252 3.0909 0.79983 3.4545 1.08556 5.3636 1.16052 3.0000 2.01843 5.2727 0.87039 6.6364 0.64875
4 1.0000 0.00000 2.0000 0.00000 4.0000 0.00000 5.0000 0.00000 6.0000 0.00000 7.0000 0.00000 3.0000 0.00000
Combined 1.9000 0.94815 2.8000 1.03475 3.5000 1.25126 4.4500 1.83883 4.0000 2.24733 5.7500 0.94682 5.9500 1.43812
Understanding Consumer Attitude and Behavior About E-Commerce …
19
20 J. Masih et al.

3.2 Cluster Profile

The clusters are obtained by cross tabulating the cluster membership with the
demographic variables. The following are the various tables for this purpose.
It is clear from the Table 4 that in the clusters of digitally driven shoppers and the
power shoppers, there are more males than females but it is just opposite in case of
reluctant shoppers. In case of surgical shoppers, males and females are approximately
same in numbers.
Table 5 depicts the distribution of customers belonging to various clusters based
on age. It shows that surgical shoppers are the majority in the age group of 20–35
years while digitally-driven shoppers belong to 10–35 years category. The power
shoppers have a wide range of customers in different age groups i.e., from 10 to 50
years. The reluctant shoppers are more than 35 years of age.
The Table 6 gives the distribution of shoppers based on their educational qualifi-
cations. Most surgical shoppers and digitally driven shoppers are either graduate or
postgraduate. The power shoppers and the reluctant shoppers are either graduate or
having education up to class 12.
Table 7 gives the information of shoppers of different clusters based on their
occupation. Most shoppers of clusters 1 and 2 are either students or have private job.

Table 4 Clusters * gender cross-tabulation

Gender Total
Male Female
Clusters The surgical shoppers 7 8 15
Digitally-driven shoppers 9 6 15
The power shoppers 34 21 55
The reluctant shoppers 6 9 15
Total 56 44 100

Table 5 Clusters * age cross-tabulation

Age Total
10–20 years >20–35 years >35–50 years >50 years
Clusters The surgical 3 8 2 2 15
shoppers
Digitally-driven 5 5 3 2 15
shoppers
The power 14 16 17 8 55
shoppers
The reluctant 3 2 6 4 15
shoppers
Total 25 31 28 16 100
Understanding Consumer Attitude and Behavior About E-Commerce … 21

Table 6 Clusters * education cross-tabulation

Education Total
Upto 12th class Graduate Post graduate Doctorate
Clusters The surgical 3 5 5 2 15
shoppers
Digitally-driven 3 6 5 1 15
shoppers
The power 12 27 10 6 55
shoppers
The reluctant 6 7 2 0 15
shoppers
Total 24 45 22 9 100

The power shoppers are either students or in govt. job whereas the reluctant shoppers
are having mixed occupation, but they are in business also.
From Table 8 the surgical shoppers and digitally driven shoppers have income
less than 1 lakh whereas the power shoppers and the reluctant shoppers have their
income less than 5 lakh.
Table 9 gives the monthly expenditure on online shopping by different clusters.
It is clear from the table that most of the surgical shoppers are spending more than
Rs.1500 on online shopping. In the case of spending by digitally driven shoppers, it

Table 7 Clusters * occupation cross-tabulation

Occupation Total
Student Business Govt. job Private job
Clusters The surgical shoppers 5 3 2 5 15
Digitally-driven shoppers 6 1 1 7 15
The power shoppers 19 8 18 10 55
The reluctant shoppers 4 5 2 4 15
Total 33 17 24 26 100

Table 8 Clusters * income cross-tabulation

Income Total
<1 lakh 1–5 lakh >5–10 lakh >10 lakh
Clusters The surgical shoppers 7 3 3 2 15
Digitally-driven shoppers 7 3 2 3 15
The power shoppers 19 17 12 7 55
The reluctant shoppers 4 7 2 2 15
Total 33 30 21 16 100
22 J. Masih et al.

Table 9 Clusters * money_spend_per_month cross-tabulation

Money_spend_per_month Total
100–500 >500–1000 >1000–1500 1500
INR INR INR and
above
INR
Clusters The surgical 5 0 0 10 15
shoppers
Digitally-driven 0 5 5 5 15
shoppers
The power 15 15 15 10 55
shoppers
The reluctant 5 0 5 5 15
shoppers
Total 25 20 25 30 100

is in the range of Rs.500 to more than Rs.1500. The Power shoppers and the reluctant
shoppers spend a mixed amount of money in all ranges.

4 Conclusion

This research demonstrates the shoppers’ profile of Agri-based products as per

various dimensions of online shopping as well as their demographic characteris-
tics. The data collected was analyzed based on two-step cluster analysis and their
profiles have been identified based on the results. There were four clusters of shop-
pers which are identified. The following conclusion can be drawn based on results
obtained:
1. Other than this promotions attribute which includes discounts, free gifts, attrac-
tive packaging, and combo packs is equally important for all the customers but
will be preferred by reluctant shoppers. Similarly design attributes which include
colors, borders, graphics, pictures, styles and fonts are also equally preferred by
all shoppers except shoppers who belong to the reluctant shoppers.
2. Surgical shoppers give more importance to merchandise information and relia-
bility attributes of online shopping. They are mostly females in the age group
of 20–35 years, either graduate or postgraduate. They are students or in private
jobs earning less than 1 lakh and spends more than Rs. 1500 monthly on online
shopping.
3. The digitally driven shoppers are more concerned about convenience and inter-
activity attributes. They are mostly males in the age group of 10–35 years and
are either graduate or postgraduate. They are students or in private jobs earning
less than 1 lakh and spends between Rs. 500 and Rs. 1500 monthly on online
shopping.
Understanding Consumer Attitude and Behavior About E-Commerce … 23

4. The power shoppers have more inclination towards navigation attribute. They
are mostly males in the age group of 20–50 years and graduate. They are either
students or in government jobs with income less than Rs. 5 lakh and spends
between Rs. 100 to Rs. 1500 monthly on online shopping.
5. The reluctant shoppers are more affected by navigation and reliability attributes.
They are mostly females in the age group of 35–50 years and studied either up
to 12 or graduate. They have mixed occupation, earning less than Rs. 5 lakh and
spend either Rs. 100–500 or more than Rs. 1000 monthly on online shopping.
This profiling of the shoppers of Agri-products based on various dimensions of
online shopping as well as their demographic characteristics can effectively help agri-
businesses in improved understanding and categorization of their target customers.
Such categorization can also help businesses in better product development and
subsequently result in improvement of awareness building campaigns effectively
targeting customer segments besides improving buying processes tailored to the
associated buying behaviors.

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Antecedents and Consequences
of Business Model Innovation:
A Theoretical Model
Rani Shahwan , Mohammed An-Najjar , Abdulnaser Nour ,
and Tabish Zaman

Abstract The importance of business model innovation (BMI) in determining firm

performance has been widely acknowledged. However, a comprehensive under-
standing of the antecedents that drive BMI is still lacking. This conceptual model aims
to address this gap by proposing a relationship between learning orientation, absorp-
tive capacity, and strategic flexibility and BMI. Our model suggests that firms with
a strong learning orientation, high absorptive capacity, and high levels of strategic
flexibility are more likely to engage in BMI. Moreover, we posit that BMI has a
positive impact on firm performance, including financial and strategic outcomes.
This conceptual model provides a foundation for future empirical research to test
these relationships and shed light on the antecedents of BMI and its impact on firm
performance.

Keywords Business model · Business model innovation · Absorptive capacity ·

Learning orientation · Business performance

1 Introduction

Business model innovation (BMI) has become a critical factor in determining firm
performance in today’s rapidly changing market [1–4]. Firms that are able to success-
fully innovate their business models are better equipped to respond to changing
market conditions and achieve superior financial and strategic outcomes [5, 6].

R. Shahwan (B) · M. An-Najjar

Department of Business Administration, An-Najah National University, Nablus, Palestine
e-mail: [email protected]
A. Nour
Department of Accounting, An-Najah National University, Nablus, Palestine
e-mail: [email protected]
T. Zaman
ARU, Cambridge, UK

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 25

A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_3
26 R. Shahwan et al.

Despite its growing importance, there is limited understanding of the antecedents

that drive BMI and the impact that BMI has on firm performance.
Foss and Saebi [3] point out that BM innovation—ostensibly a new source of
innovation that “complements the traditional subjects of process, product, and orga-
nizational innovation” [7, p. 1032]—is less well understood, possibly because the
BMI literature is more recent than the BM literature. However, it is rapidly increasing,
implying that BMI is a significant phenomenon that must be conceptualized and theo-
rized on its own. While BM and BMI are undoubtedly related, BMI research adds
the dimension of innovation, raising a number of critical theoretical and empirical
questions: What are the drivers, facilitators, and impediments to BM innovation?
Under what conditions can BMI provide a sustained competitive advantage? Is BMI
only found in the upper echelons, or can it also be found at lower levels of the orga-
nization? However, due to the nascent nature of BMI research, such fundamental
questions are not currently being posed, addressed, and answered in a systematic
manner.
Furthermore, Previous research has explored various factors that influence BMI,
including firm size, industry structure, and firm resources [3, 8]. However, these
studies have not fully captured the complex interplay between a firm’s internal
resources and its ability to engage in BMI. The dynamic capabilities theory [9]
provides a useful framework for understanding this relationship, by focusing on the
firm’s ability to build, integrate, and reconfigure its internal resources in response to
changing market conditions.
This study aims to address the gaps in the previous literature by focusing on
three key antecedents of BMI within the dynamic capabilities theory: learning orien-
tation, absorptive capacity, and strategic flexibility. We propose that firms with a
strong learning orientation, high absorptive capacity, and high levels of strategic
flexibility are better equipped to engage in BMI, allowing them to adapt to changing
market conditions and achieve superior performance outcomes. Moreover, we posit
that BMI, as a dynamic capability, enhances a firm’s performance by allowing it
to respond to changing market conditions and achieve better financial and strategic
outcomes. The purpose of this paper is to provide a conceptual model of the rela-
tionship between learning orientation, absorptive capacity, strategic flexibility, BMI,
and firm performance within the dynamic capabilities theory. The model serves as a
foundation for future empirical research to test these relationships and contribute to
our understanding of the dynamic capabilities that drive BMI and its impact on firm
performance.

2 The Business Model Concept

In recent years, scholars have shown keen interest in the BM concept and the BM
has emerged as a key research area in the fields of strategy and entrepreneurship [6,
7, 10–14]. This growing interest in the concept is manifested by the growing number
research projects, academic and practitioner oriented books, and the wide use of the
Antecedents and Consequences of Business Model Innovation … 27

concept by journalists, consultants, business managers, and board directors [15, 16].
A review of BM literature has been carried out by [7, 17], and more recently by [18].
The BM has been a conceptualized as a firm’s framework for making money [19],
and it captures the key relationships in a venture on a number of levels including
production, strategy and economic aspects [20, 21]. Although various definitions
have been proposed for the concept, there is a growing consensus that a BM describes
the logic of the firm and how it intends to create, deliver, and capture value [11, 22,
23]. More specifically, [20, p. 494] states that “a business model depicts the content,
structure, and governance of transactions designed so as to create value through the
exploitation of business opportunities.” For them, the BM concept has the potential to
be a bridge between entrepreneurship and strategy due to its focus on value creation.
Therefore, novel BM is defined as a framework for capturing and appropriating value
by carrying business activities in a unique way compared to other rivals [24].

2.1 Origins of the BM Concepts in Academic Research

Although BMs growing prominence has been primarily linked to the dot.com bubble
(from 1998 to 2001), its use in the academic literature dates back to the 1950s [25].
Teece [11] points out that BMs have been essential to trading and economic regimes
since barter exchange era and links the popularity of the concept to the proliferation
of internet and the emergence of the digital economy. Other authors argue that the
BM concept has similarities with other concepts from the management literature,
e.g. “business idea” [26], “business concept” [27] and “theory of business” [28].
To track the origins of the concept in academic literature a Google Scholar search
was conducted for the term “business model” in academic peer reviewed journals.
The database search was conducted in 30/12/2022 and produced 22,900 “title” hits.
The results show that the academic interest in the BM construct is quiet recent; 19,000
out of 22,900 “title” hits were in fact published after the year 2010 (see Fig. 1).
According to [29], the public started to use and talk about BMs in the early 1970s.
At that that time, the concept was mainly used in relation with business modelling
[30]. In consequence, most of BMs literature during that period was published in
journals of Informational Technologies such as the Journal of System Management.
From the 1970s to early 1990s the concept has been used in parallel with other
terms from the fields of computer science and system modelling, e.g. Computerized
Model, Computer Assisted Modelling, and Information System [29]. Therefore, it
can be noted that the conceptualization of the BM concept has been influenced to large
degree by the development of business modelling and information system during this
period.
The advances in information and communication technologies during 1990–1995
lead to an increased interest in the concept by both researcher and practitioners.
During this period, other themes increasingly began to shape people understanding
of the concept, although, most published work was connected to the same fields
of computer science and business modelling. For example, scholars in the strategy
28 R. Shahwan et al.

Fig. 1 Publication by year. Source Google Scholar, 30/12/2022, 22,900 title hits

context have used the BMs in connection with other terms such as revenue model
or relationship management [29, 30]. The advent of the “new economy” and the
proliferation of internet increased the BM popularity within business enterprises
[11, 12, 15]. Magretta [31] suggested that the BM concept became widely used after
the introduction of personal computer and the spreadsheets. Along with the growth
of e-commerce/e-business activities, there was also a substantial increase in number
of publications.
Scholar’s efforts have been also directed towards identifying the strategic compo-
nents of the concept, rather than using the term as a modelling tool. In this literature
has BMs linked to competitive advantage and to business performance. While some
authors considered the BM as distinct but related to the concept of strategy [32],
others point out that concept can be used to integrate various strategy perspectives
[27]. Chesbrough and Rosenbloom [33] argue that the development of the BM as a
management concepts has been influenced to a large degree by the field of business
strategy rather than business modelling. Recently, scholars have started to empha-
size value creation and value capture, which are now considered as one of the main
elements of the BM concept [11, 22, 24, 34, 35].

2.2 Review of the BM Innovation Literature

BMI can be distinguished from other forms of innovations. Schumpeter [36] have
identified five different types of innovation including new products and services,
new methods of production, new sources of supply, exploitation of new markets,
Antecedents and Consequences of Business Model Innovation … 29

and new ways of organizations. While the majority of the existing literature focuses
on the first two types of innovation, this study explores the last type; i.e. new ways
of organizations, which is currently termed by scholars as BMI. Although BMs
are fundamental for commercializing new products or new technologies, they are
certainly different from product or technological innovations [2, 33, 37]. Hence,
rather than inventing new product and service, BM innovators seek to redefine their
value proposition i.e. reconfigure what product and service is and how they will be
delivered to customers which may lead to superior performance outcomes [2, 11, 38].
Conceptualization of BM innovation
There has been a lack of clarity and consensus among researchers over the definition
and extent of BMI. According to [3] one study stream has seen BMI as a process
(e.g., search, experimentation, transformation), whereas another has viewed it as
an outcome [39]. Another classification system, suggested by Volberda et al. [40]
divides creative business models into four quadrants based on replication–renewal
and strategy driven–customer driven characteristics. Another group of scholars has
adopted the architectural approach of innovation in business models, focusing on
the interconnections between the activities of the BMI process [2, 41]. Researchers
have also categorized BMI based on the degree of innovation and extent of change
in existing business models. On the one hand, some researchers have proposed that
BMI may only affect a single component of the business model value processes,
such as value creation [2]. On the other hand, others have argued that it may affect
more than one, if not all, of the components of the BM and the architecture that
connects those components [42]. Still other researchers have argued that a complete
recombination of all components and the underlying architecture connecting them
must be a prerequisite for BMI (e.g. [43]). Accordingly, [22] introduced the CANVAS
framework, which characterizes BMI as a collection of nine fundamental building
pieces that illustrate the rationale behind how a company functions and innovates its
business model.
Antecedents of BMI
Early research on BMs have been centred around defining the concept, clarifying its
meaning, and listing its main components (e.g., [20, 27, 33, 44, 45–47]), but with the
increase in the number of BMs, especially after the dot-com bubble, scholars interest
have been shifted toward identifying BM archetypes and taxonomies [22, 48–51].
While there is growing number of studies that have investigated the importance of
change arising from BM innovation, these studies did not address the antecedents
to such change. Based on our review of the BM literature, this study focus on four
key antecedents; namely; Absorptive Capacity, Learning Orientation, and Strategic
Flexibility.
30 R. Shahwan et al.

Over the past two decades, research published in the field of strategic manage-
ment has emphasized the significance of absorptive capacity in achieving higher
firm performance. Absorptive Capacity is defined by Zahra and George [52] as a
company’s capacity to acquire, assimilate, transform, and exploit new knowledge.
Absorptive Capacity is theorized, from a learning perspective, to contribute to firm
innovation and, in turn, facilitate sustainable competitive advantage by enhancing
knowledge transfer. In this study strategic flexibility is defined in line with [53] as
the capacity to identify innovation opportunities, commit resources to new courses
of action, or reverse ineffective resource deployment. Based on the review of extant
organization learning literature, two conceptualization of learning orientation appear
to have an increased prominence. The first group of scholars broadly define LO as the
development of new knowledge or insights that can potentially influence behaviour
through values, norms, and beliefs rooted in the organization culture [54]. Other
scholars, however, conceptualize LO in a way that reflects the need for a new set of
behaviours [55]. Learning orientation enhances the organizational knowledge capa-
bility [56] and also helps organizations in searching for information and assimilating,
[57–63] developing and creating new knowledge and, thus, it can be considered an
important driver of BMI.
Consequences of BMI
A growing body of literature has investigated the strategic benefits of novel BMs [1,
64] and the potential for a firm’s BM to be a subject of innovation in itself [18, 35,
65]. In this literature novelty is achieved through the discovery of new BMs rather
than products or technologies in an existing industry [2]. Firms who emphasize BM
innovation are expected to benefit in three main ways [2, 66]. First, they will be able to
create value for customers at low cost. Second, they are likely to develop sustainable
competitive advantage. Finally, BMs can be used as a powerful competitive tool.
Research on the consequences of BMI cam be classified into two streams. The
first stream focuses on link the “act,” or process, of BMI to outcome implications
(see [67, 68]) and those that examine the effects of various types of BMs on firm
performance (e.g., Huang, Lai). In the first scenario, research assumes a process
perspective and investigates whether an innovative adjustment to the current BM
results in higher performance outcomes. Aspara et al. [67], for instance, compare the
financial performance implications of BMI to those of replication, whereas [69] find
that BMI aimed at disrupting the industry chain, revenue model, or organizational
boundaries does not result in any significant variation in financial performance across
the various types of BMI. [70] found that, in the context of entrepreneurial enterprises,
firms that adjusted their BMs over time and in an inventive manner experienced a
beneficial impact on venture performance. In the second scenario, research does not
establish a direct correlation between BMI and performance outcomes. Instead, they
conduct empirical tests to determine the effects of various BM designs on innovation
performance.
Zott and Amit [6] after distinguishing between novelty- and efficiency-centered
BM designs, showed a positive correlation between novelty-centered BMs and busi-
ness performance in entrepreneurial firms. In a later study [71], these same authors
Antecedents and Consequences of Business Model Innovation … 31

demonstrate the significance of product market strategy and business model (BM)
design compatibility in boosting firm performance. After adopting the same differen-
tiation of novelty- and efficiency-centered BM designs, Wei, et al. [72] investigated
the compatibility of exploitative and exploratory innovation with various BM designs
to enhance the growth of Chinese enterprises.

3 Theoretical Model

Based on our review of literature, Fig. 2 illustrates the study theoretical model. The
first part of the model defines the key antecedents’ drivers to BMI. The second
part aims at investigating the link between BMI and business performance. More
specifically, it argued that a firm’s absorptive capacity, learning orientation, and
strategic flexibility collectively represent a unique resource or a capability which
contributes to the development of innovative-business model, as well as the nature
of the impact of such advantage on business performance.
The dynamic capabilities theory provides a useful framework for understanding
the relationship between a firm’s internal resources and its ability to adapt to changing
market conditions through business model innovation (BMI). This conceptual model
proposes that learning orientation, absorptive capacity, and strategic flexibility serve
as antecedents to BMI. Our model suggests that firms with a strong learning orien-
tation, high absorptive capacity, and high levels of strategic flexibility are better
equipped to engage in BMI, allowing them to adapt to changing market condi-
tions and achieve superior performance outcomes. Moreover, we posit that BMI,
as a dynamic capability, enhances a firm’s performance by allowing it to respond
to changing market conditions and achieve better financial and strategic outcomes.
This conceptual model provides a foundation for future empirical research to test
these relationships and contribute to our understanding of the dynamic capabilities
that drive BMI and its impact on firm performance.

Absorptive
Capacity

Business Model Business

Learning
Innovation Performance
Orientation

Strategic
Flexibility

Fig. 2 Research model

32 R. Shahwan et al.

4 Conclusions

The key objective of this study is to examine the antecedents and consequences to
BMI in the manufacturing and service sectors, which has been largely neglected in
prior BM research. Our model provides implications of academic scholars as well
as practitioners. While research focusing on defining the BM concept and listing its
main components is important, progressing research on BMI requires researchers to
explore the key antecedent driver of novel BMs, which this study has attempted to
accomplish. This study also highlights the importance of BMI for business managers.
Our review suggest that BMI can be viewed as an alternative to product or process
innovation. Furthermore, an appropriately deigned BM can be an important source
of competitive advantage and superior business performance.

5 Future Directions

Future research can be conducted to explore the impact of business model innovation
on firm competitiveness. This could include studies that compare the competitiveness
of firms with different types of business models, as well as studies that analyse the
impact of business model innovation on a firm’s ability to compete in its market.
Furthermore, more research is required to explore the role of strategic agility in
enabling firms to successfully adopt new business models and improve performance.
This could include studies that examine the characteristics of firms that are able to
quickly and effectively adapt to changing market conditions and adopt new business
models.

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Financial Management Information
System in Developing Countries:
A Review of Literature

Mahmoud Al-Kofahi, Dmaithan Abdelkarim Almajali, Faraj Alfawareh,

Manaf Al-Okaily, Bara’a Al-Kofahi, and Abdalmuttaleb Al-Sartawi

Abstract Financial Management Information System (FMIS) has continuously

been a significant aspect in public financial management reform in developing coun-
tries. Accordingly, there have been many empirical studies on FMIS from different
perspectives. However, very few of those studies had attempted to do a literature
review on the subject. This current study offers an extensive review of literatures
on FMIS. Using Google Scholar, this study identified 109 academic articles and
conference papers on the subject published between 2010 and 2022. An analysis
was conducted on those articles and papers to identify the demographic character-
istics, research methodologies, and research themes employed. The features of the
literatures were summarized using Microsoft Excel 2016, focusing on the sum of
publications, types of sources, subject areas, contributions by country, most active
institutions, authorship, keywords, as well as analyses of titles and abstracts. It was
found that a majority of the articles were journal and conference publications, that
most of them were published by The Strategic Journal of Business and Change
Management, and that Kenya contributed the largest percentage of articles. Addi-
tionally, it was found that the most frequently used research methodologies are the
cross-sectional and survey approaches, and that most of the studies conducted an

M. Al-Kofahi
Irbid National University, Irbid, Jordan
D. A. Almajali
Applied Science Private University, Amman, Jordan
F. Alfawareh
School of Economics, Finance and Banking, Universiti Utara Malaysia, Changlun, Malaysia
M. Al-Okaily
School of Business, Jadara University, Irbid 733, Jordan
B. Al-Kofahi
Deanship of Educational Services-Computer Science Unit, Qassim University, Buraydah,
Saudi Arabia
A. Al-Sartawi (B)
Ahlia University, Manama, Bahrain
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 37

A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_4
38 M. Al-Kofahi et al.

analysis at the individual level. Meanwhile, the IS success and technology accep-
tance models were found to be the most popular for examining FMIS. The findings
are expected to enrich the existing body of knowledge on FMIS.

Keywords Developing countries · FMIS · Public financial management ·

Literature review

1 Introduction

Among the ongoing issues faced by developing nations include financial distortions,
ineffective resource allocation, unethical behaviour, and budgetary shortfalls [1].
These issues have had a negative impact on the society as well as on economic
growth and business operations. Developing countries are encouraged to enhance
their public financial management (PFM) as one of the strategies to address these
issues [2].
PFM reforms are acknowledged as a force that can aid in obtaining, managing,
and allocating public resources in a transparent and efficient manner [3]. PFM could
facilitate the effective provision of public services, generate wealth and employ-
ment, and enhance economic growth [4–6]. By providing pertinent, accurate, and
trustworthy information, effective PFM speeds up the decision-making process for
financial policies and ensures the generation of transparent and accountable public
financial reporting [7–14].
According to [1], the majority of poor nations’ budget execution and accounting
systems were or are supported by human labour or antiquated, inefficient software
programmes. The performance of PFM systems as well as the accurate and timely
processing of data for budget planning and reporting would be negatively affected
with the usage of manual or antiquated procedures. Budget management has been
reported to be badly impacted by outdated and antiquated budgeting procedures,
leading to resource misallocation and poor management of government resources [1,
13, 14]. As a result, governments struggle to accurately, completely, and transparently
report on their financial situation; the lack of information has made governments less
transparent and accountable [4, 15–21].
The World Bank noted that considering these unusual circumstances,
e-Government is a crucial instrument for enhancing PFM and increasing the trans-
parency of decision-making by allowing access to more pertinent information [19].
The Financial Management Information System (FMIS), an electronic government
system, speeds up the creation of government budgets and aids in a more effective
and efficient transmission of government processes. FMIS is a computer-oriented
system that could enhance financial control, budget management, and reporting,
hence increasing the PFM of the government [22]. According to [1], FMIS is suffi-
cient, reliable, accurate, current, and relevant for addressing the informational needs
of users. As a result, creating an FMIS has become a must for creating a PFM that is
more effective [15, 23–27].
Financial Management Information System in Developing Countries … 39

From 1984 to 2010, the World Bank had financed 87 FMIS projects (e.g., govern-
ment FMIS, Integrated FMIS, Public Sector Management Project, Treasury Systems
Project) in a total of 51 nations, amounting more than US $2.2 billion out of which US
$938 million was allocated for FMIS-oriented ICT solutions [4, 25]. These systems
play such a crucial part in the PFM success of developing nations and have progres-
sively become more complicated. Accordingly, many empirical studies on FMIS have
been conducted from different perspectives (e.g., FMIS impact, FMIS successful
implementation, the challenges of FMIS implementation). Even so, very few of those
studies (e.g., [25]) had reviewed or surveyed past studies on the performance of FMIS,
or had examined the findings, limitations, and possible directions for future studies.
Due to this, the purpose of this work is to examine the results of existing research on
the topic and offer new directions for future studies. Consequently, the current study
seeks to provide answers to the following research questions by compiling recent
conceptual and empirical articles: (1) What are the current FMIS research demo-
graphic characteristics? (2) What methodologies and methods have been utilised in
the extant FMIS research? and (3) What themes have been investigated in prior FMIS
research?
The organisation of this paper is as follows: Sect. 2 discusses the definitions for
FMIS, the types of FMIS, and its history in brief. Section 3 elucidates on the research
methodology, specifically the search procedures and selection criteria employed in
past studies. Section 4 presents and discusses the findings, specifically the demo-
graphic characteristics, the methodologies used by previous studies, the analysis
of the FMIS-related theories and themes, and the text analysis of the previous
studies’ titles and keywords. Lastly, Sect. 5 concludes the study and presents the
study limitations as well as suggestions for future research directions.

2 Literature Review

2.1 Definition of FMIS

FMIS has no established definition that is acknowledged worldwide [2]. In other

nations, the system goes by different names such as FMIS in Uganda, integrated
FMIS in Gambia, Ghana, and Nigeria, or government FMIS in Iraq, Egypt, and
Jordan [4]. Because each system has various features, different countries use the
phrase in slightly different ways [22]. In general, these systems are very similar.
FMIS is employed in this current study.
According to [28], FMIS is a computer software application which unifies crucial
accounting and budgetary operations to advance data security and management effec-
tiveness so as to ensure thorough financial reporting. According to [2], the PFM
functions of the government are handled by a network of computerised systems.
In order to guarantee transparency and accountability in the allocation, usage,
and control of the existing financial resources of all ministries and governmental
40 M. Al-Kofahi et al.

departments, FMIS serves as an integrated computerised system which connects all

the financial and accounting operations of numerous ministries, financial centres,
governmental departments, and budget institutions with the MoF [28].
It is evident from the many definitions provided by researchers that the idea of
FMIS is viewed from different viewpoints or perspectives. Yet, most definitions lean
heavily towards the automation of government accounting and financial operations.
The definition of FMIS by [15] is deemed appropriate for this study. i.e., an integrated
IS that links the MoF with all accounting and financial activities across numerous
ministries, departments, and governmental agencies. This may also imply that FMIS
stands for the automation of the financial system of the government.

2.2 FMIS Functions

FMIS enables the government to properly account for, manage, and oversee public
sector transactions in line with the applicable rules and regulations [29–34]. This
shows that government institutions, including the federal, state, and municipal
governments regard FMIS as an integrated system [35, 36]. PFM’s FMIS component
is crucial for governments. The specific goal of the FMIS initiative in poor nations,
according to [37, 38], is to support the function of PFM.
FMIS enhances the reporting process and financial control, which in turn boosts
the government’s PFM [20]. Namely, FMIS aids the government and users in
producing more trustworthy, thorough, accurate, and timely financial information,
hence resulting in a more efficient, transparent, and accountable PFM [15]. Addi-
tionally, FMIS enables the financial control of the MoF and the administration of
other ministries, speeds up the interchange of financial information between users,
and aids users in making timely decisions.
In general, FMIS covers seven major functions: financial and accounting
processes, cash management, payment management, receivables and revenue
management, budget preparation and implementation, procurement management,
and project management.

3 Research Methodology

As a foundation for the current work, this part focuses on earlier articles on FMIS.
The selected articles’ authors, study design, population, research methodology, publi-
cation type, and conclusions are identified and described. This literature evaluation
was conducted in May to September 2022, and keyword searches were used to find
the relevant literatures [39, 40]. Utilizing keywords to find relevant articles on a
particular subject is a good search strategy [41–44]. Following [37] recommenda-
tions, we picked different keywords but with similar meanings to generate more
related articles as the wording that is most pertinent to this paper’s theme namely
Financial Management Information System in Developing Countries … 41

Fig. 1 FMIS LR information flow diagram

“FMIS initiatives” only produced little results. Thus, we used the keywords “inte-
grated FMIS”, “government FMIS”, “public FMIS” in our search for the relevant
articles. Google Scholar was employed for this purpose, particularly in searching
for articles published over the 2010–2022 period. To screen the articles generated,
those published in other languages (e.g., Arabic, Chinese, Indonesian, Spanish and
Ukrainian) were excluded. In short, only articles written in English were selected.
Also excluded are all unpublished theses.
The initial literature search produced 381 publications on FMIS. In the second
stage, the selected articles’ titles and abstracts were reviewed. A total of 238 arti-
cles were left for additional examination after 143 articles were excluded from the
second stage assessment as they did not satisfy the required criteria. The authors
were only able to access 207 studies as a result. A total of 109 papers were assessed
to be significant for further analysis after extensive reviews. The steps in the whole
literature search procedure are shown in Fig. 1.

4 Results and Discussion

The results and discussions of the literature review are compiled and presented in this
section, hence describing the analysis of the FMIS studies. These include the year of
publication, review based on country, type of publications, research methodologies
used by the previous studies, analysis of adapted information system (IS) model,
research themes, and text analysis of the document titles and keywords.

4.1 Demographic Characteristics

4.1.1 Year of Publication

Examining the papers according to the year of release enables the researcher to track
trends and changes in the level of interest in the research topic over time [45–49].
The number of works published on FMIS between 2010 and 2022 is shown in this
section. A total of 5 articles were published in 2010 and three in 2011. The lowest
number of articles published was in 2012 with only three articles, whilst the highest
number was in 2017 with 20 articles. The publication of FMIS-related articles has
42 M. Al-Kofahi et al.

25

20

15

10

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Fig. 2 Document by year

been decreasing since 2017. The number of publications on FMIS-related studies is

expected to increase after 2022. Figure 2 illustrates the publication trend of FMIS
studies over the period of 12 years.

4.1.2 Review Based on Country

Studies on FMIS had been conducted across developing nations. The analysis of
these research, which was based on country location, gives a quick overview of how
FMIS is addressed in various regions. The studies were carried out in Africa, Asia,
Europe, and South America. In this section, the studies are examined based on the
“sources of primary data”. Thus, for this section, we exclude all conceptual studies.
This brings to a total number of 92 empirical studies out of 109.
There were overall 23 nations surveyed. Kenya is ranked first in the category with
26 published studies (28%), Indonesia with 13 (14%), and Ghana and Jordan with
11 (12%) each. Table 1 shows the geographical distribution of the studies.
In summary, Table 1 demonstrates that about 63% of the empirical investigations
on FMIS were conducted in African nations, especially Kenya (e.g., [3, 5]), Ghana
[35, 45], and Nigeria [46, 47]. Moreover, nearly 26% of the studies were conducted
in Asia. Less research was conducted in Europe and South America, which may be
related to their progress in PFM reform relative to the less developed nations.
Financial Management Information System in Developing Countries … 43

Table 1 Review based on

Country No. of publications Percentage
country
Kenya 26 28
Indonesia 13 14
Ghana 11 12
Jordan 11 12
Nigeria 8 9
Uganda 5 5
Other countries 18 20
Total 92 100
Note Only countries with more than five publications are presented
in this table

Table 2 Type of document

Type of publication Frequency Percentage
Journal article 80 73.5
Conference paper 14 13
Book chapter 5 4.5
Report 4 3.5
Working paper 4 3.5
General manuscript 1 1
Teaching cases 1 1
Total 109 100

4.1.3 Document and Source Type

Analysis was also carried out on the distribution of publication types as found through
Google Scholar. This research identified 7 different publishing types (see Table 2).
In terms of frequency of use, journal articles made up 73.5% of all publications, with
conference papers coming in second place at 13%, book chapters (4.5%), reports
(3.5%), working papers (3.5%), general manuscripts (1%), and teaching cases (1%).
As shown in Table 2, the articles are divided into five categories of sources, with
journals accounting for the majority of sources with 83 documents (76%), conference
proceedings with 15 documents (14%), international agencies with seven documents,
local agencies with two documents, and book series with two documents.

4.1.4 The Most Active Source Title

As shown in Table 3, multiple articles with the same theme were found from inter-
national conferences and scholarly journals published between 2010 and 2022,
including The Strategic Journal of Business & Change Management (3.6%), The
44 M. Al-Kofahi et al.

Table 3 Publishers of FMIS research documents

Source title Frequency Percentage
The Strategic Journal of Business and Change Management 4 3.6
Int. Journal of Advanced Engineering and Management Research 3 2.7
International Journal of Economics, Commerce and Management 3 2.7
International Journal of Innovative Research & Development 2 1.8
Asian Review of Accounting 2 1.8
International Journal of Business and Social Science 2 1.8
Critical Perspectives on Accounting 2 1.8
IOSR Journal of Business and Management 2 1.8
Journal of Physics: Conference Series 2 1.8
Note Only journals with more than one publication are presented in this table

International Journal of Advanced Engineering and Management Research (2.7%)

and The International Journal of Economics, Commerce and Management (2.7%).
Likewise, some other leading journals were also found to carry articles with similar
themes including Asian Review of Accounting; Critical Perspectives on Accounting,
and IOSR Journal of Business and Management. The rest of the 87 sources only
published one document. This illustrates how diverse and wide the publishing
environment is for FMIS researchers.
Also examined are the top publishers on FMIS, i.e., those which have published
more than two FMIS-related papers. Emerald Publishing Limited was found as
the leading publisher on FMIS with seven publications, followed by Springer
Nature with six publications, and Reexplore with five publications. Other publishers
contributed three publications each (e.g., IGI-Global, The World Bank Group,
USAID, Wiley) [50].

4.1.5 Number of Author

In terms of number of authors, it was found that one document could be written by
one to seven authors. A total of 45 publications were written by a two-author team,
whilst a six-author team and a seven-author team contributed one paper each (i.e.,
[51, 52]). A total of 25 articles were written by a single author (e.g., [53, 54]), whilst
27 papers were written by a three-author team (e.g., [34, 53]). A four-author team
published six research papers (e.g., [55, 56]), and finally a five-author team published
four articles (e.g., [57, 58]). It was also discovered that a total of 253 writers had
published 109 research studies. Table 4 lists the authors with three or more published
studies along with their affiliations.
Based on the above, it is clear that FMIS studies are still scarce with only 19 related
papers available out of the 109 initially identified. Each author only contributes a
few articles to this topic, spread out across a large number of authors.
Financial Management Information System in Developing Countries … 45

Table 4 Most productive authors

Prolific authors Affiliation No. of articles
Sanja M. Mutongwa Jaramogi Oginga Odinga University 4
Samuel N. Simpson University of Ghana 3
Lexis A. Tetteh University of Professional Studies 3
Anthony J Rodrigues Jaramogi Oginga Odinga University 3
Ali Hashim Development Research Group, World Bank 3
Moritz Piatti Development Research Group, World Bank 3
Note Only authors with more than two publications are presented in this table

4.2 Research Methodologies

The analysis of all 109 documents was presented in the previous section using concep-
tual and empirical methodologies. However, in this section, only empirical papers
are taken into account. Therefore, conceptual papers are not included in this study.
Hence, a total of 92 pertinent publications were taken into account for additional
analysis.

4.2.1 Research Approach Used

Our findings show that no study had used the longitudinal technique, despite
the widely acknowledged usefulness of longitudinal research when analysing
consumers’ attitudes about technology over a certain period. A cross-sectional
methodology had been used in all of the investigations (e.g., [59–65]). Hence, it is
proposed that additional longitudinal investigations will be necessary in the future.
More longitudinal studies on IS should be conducted, according to [66–70], as longi-
tudinal assessments allow researchers to conduct in-depth analyses of how IS is really
used and its outcomes.

4.2.2 Methodological Approach Used

Using the date presented in Table 5, it shows that more than 68% of the previous
studies had used a quantitative approach for collecting data related to FMIS, followed
by those that used a qualitative method. Only a small number of studies had used a
mixed-method approach.
Table 5 shows that 63 of the articles (68%) are quantitative in nature (e.g., [56,
71]), whilst 18 articles are qualitative (e.g., [36, 72]). Only 11 articles were mixed
method based (e.g., [49, 73]). Hence, it can be concluded that FMIS studies are
primarily conducted using a quantitative approach. 4.2.3 Review based on unit of
analysis.
46 M. Al-Kofahi et al.

Table 5 Research
Method used Number of articles Percentage (%)
methodology
Quantitative 63 68
Qualitative 18 20
Mixed method 11 12
Total 92 100

It was found that 90 of the FMIS studies had been conducted at the individual
or user level (e.g., [74, 75]). Only two studies had focused on the organisation level
(i.e., [57, 76]). It was also found that none of the studies had examined FMIS from
the combined perspective of the individual and the organisation.

4.3 Research Themes

4.3.1 Analysis of the Adapted Theories

The importance of using an underpinning theory in IS research is clear as it provides

the framework for each individual study [42, 77–82]. Many theories are frequently
applied in IS studies [39, 41]. These ideas aid in understanding the application,
assessment, implementation, and accomplishment of FMIS. The purpose of this
study is to critically examine how frequently such theories are employed in FMIS-
related works. Taken as a whole, the most used theories in the FMIS studies are
summarised in Fig. 3.
From our literature review, a total of 48 out of 109 studies built their research
questions and objectives using the underpinning theory (by adopting or adapting it).

Agency Theory
Communication Theory
Contingency Theory
Diffusion of Innovation Theory
Institutional Theory
IS Success Model
Meta Theory
Resource Based View Theory
Stewardship Theory
Structuration Theory
Technology Acceptance Model
Upper Echelon Theory
0 2 4 6 8 10

Fig. 3 Theories used in FMIS studies. Note Only theories with more than one appearance are
presented in this figure
Financial Management Information System in Developing Countries … 47

Generally, 23 theories/models were recorded in the literature review matrix. Specif-

ically, the result shows that the Technology Acceptance Model (TAM) and the IS
Success Model are the most frequently used with nine occurrences each (e.g., [13,
83–85]), followed by the Institutional Theory (e.g., [22, 35, 53]), the Diffusion of
Innovation Theory (DOI) (e.g., [3, 54]), the Resource Based View Theory (RBV)
(e.g., [86, 87]), the Meta Theory (e.g., [5, 88]), and the Structuration Theory (e.g.,
[36, 84]). The remaining theories had been used less than four times. Some theo-
ries had only one occurrence such as the Unified Theory of Acceptance and Usage
of Technology (UTAUT) (i.e., [52]), the Actor-Network Theory (i.e., [57]), and the
Stratified Systems Theory (i.e., [89]).
Some of the works had focused on validating certain constructs (e.g., [52, 76]), or
testing the whole model within a single study to ensure its validity and applicability
(e.g., [79, 83]). Others had either extended or re-specified the model with the addition
of more variables (e.g., [13, 78]). While other studies have incorporated multiple
models in a single study (e.g., [90, 91]).
However, from the previous analysis, approximately 56% (61 out of 109) of the
previous studies had been developed with their own conceptual framework rather
than adapting an existing theory. Hence, it can be said that IS models are not used
very often in FMIS research.

4.3.2 Analysis of the Research Themes

Based on the review, it appears that researchers have looked at FMIS from a variety
of angles, with the majority of them concentrating on its impact and effect (e.g., [34,
49, 51, 92, 93]). Several studies have concentrated on the efficient application of
FMIS (e.g., [3, 94]). Meanwhile, [82] and others concentrated on the difficulties in
implementing FMIS. Other studies examined FMIS user abilities [94–96], effective
implementation [97–99], and performance determinants [99–103]. In general, we
grouped the FMIS research themes into nine categories as shown in Fig. 4.

4.3.3 Text Analysis of the Document Titles

WordSift, a tool that enables researchers to quickly identify the key terms present
in the text, was also used to create the word cloud analysis for the articles’ titles.
The word cloud’s outcome with 200 maximum words and “n scale” setting is shown
in Fig. 5. There were other phrases used in the document’s title in addition to the
search engine keywords used to locate FMIS-related articles. The most prominent
words are ‘governments’, ‘management’, ‘financial factors’, ‘effect’, ‘performance’
and ‘implementation’.
48 M. Al-Kofahi et al.

FMIS effectiveness
20
18
FMIS effect FMIS success
16
14
12
10
FMIS performance 8
6 FMIS Adoption
evaluation
4
2
0

FMIS implementation FMIS usage

FMIS acceptance FMIS impact

others

Fig. 4 FMIS research themes

Fig. 5 Word cloud analysis for document titles

4.3.4 Text Analysis of the Document Keywords

Unique keywords were detected and expectedly, “IFMIS” was the most frequently
occurring, along with ‘management’, ‘financial’, ‘government’, and ‘information’.
In addition, various constructs related to FMIS such as ‘accountability’, ‘corruption’,
and ‘reform’ appeared 10 or more times. Figure 6 lists the most frequently occurring
keywords as identified by the analysis.
Financial Management Information System in Developing Countries … 49

Fig. 6 Word cloud analysis for document keywords

5 Conclusions

FMIS plays an important role in PFM success in developing countries, and many
empirical studies had been conducted on FMIS from different perspectives. Yet, there
are still very few scholarly works reviewing or surveying these studies. This study’s
aim was to provide an overview of recent research on FMIS via a detailed analysis
of 109 studies that were published over the 2010–2022 period. Three primary sub-
sections of this study’s conclusions are presented namely on the demographic charac-
teristics, research methodologies, and research themes. A summary of the literature’s
attributes, namely the quantity of publications, types of sources, subject categories,
and national contributions, was created using Microsoft Excel 2016. Meanwhile, the
term “WordSift” was used in the word cloud analysis for the documents’ titles and
keywords.
According to the findings on the geographic distribution of the literatures, Kenya
has the most publications. Most of the publications on the topic of FMIS were found in
the Strategic Journal of Business and Change Management. Also, the cross-sectional
and survey approaches were identified as the most popular research methodologies in
this domain. A majority of the researchers had studied FMIS from different perspec-
tives including FMIS impact and effect, implementations and success. Additionally,
it was shown that the IS Success Model as well as TAM are the most frequently used
models in the FMIS domain.
With the release of important data from prior FMIS investigations, this study
seeks to provide a useful input and future direction for researchers. Therefore, it is
anticipated that this current work will provide a crucial foundation for subsequent
research.
50 M. Al-Kofahi et al.

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How Can Higher Education Contribute
to the 21st Century Employability Skills
Through Use of Collaborative Learning
Design in Business

Subhadra Ganguli

Abstract Twenty-first century jobs in the business sector need graduates with
specific transferable skills due to technological disruptions, climate change and
supply chain uncertainties in the post-COVID world. The paper uses the self-study
method to discuss the potential impact of team formation, teamwork, and team
presentations in developing employability skills amongst students. The model of
study uses active student engagement techniques and alternative assessment methods
in contrast to lecture based, passive learning and traditional assessments in a class-
room. The final aim of the study is to develop employability skills among students
at the undergraduate level and create lifelong learners with potential careers in busi-
ness. Teams in F2F or virtual sessions are formed using self-selection method by the
students. Students interact with each other in teams remotely and/or face-to-face and
develop communication and technology skills (Asikainen et al. in Stud. Educ. Eval.
43:197–205, 2014). Teams work together throughout the semester to prepare and
present the project and, in the process, develop several transferable or employability
skills for career readiness in business. Peer evaluation of team presentations helps
to develop critical thinking skills among students and enables them to recognize the
value of providing and receiving critical feedback for future project preparation and
presentation in their career.

Keywords Collaborative learning · Employability skills · Transferable skills ·

Jobs for the future · Business · Higher education

S. Ganguli (B)
Commonwealth University of PA, Bloomsburg, PA 17185, USA
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 57

A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_5
58 S. Ganguli

1 Introduction

Principles of Macroeconomics course is a foundational course for students at

the Bloomsburg Campus of the Commonwealth University of Pennsylvania for
continuing to study intermediate or advanced levels of study at the undergraduate
program.

2 Business World and Higher Education

One of the main concerns that industry practitioners express is the lack of preparation
of new graduates to face the real world of business or work [1–3]. Higher educa-
tion incorporates content specific knowledge which, in an uncertain business world,
can be quite redundant when new processes, systems and innovations remain key to
competition and customer satisfaction [1–3]. The current 2020s, with its COVID-19
pandemic disruptions and more recent AI-based ChatGPT, are examples where grad-
uates or employees need to be resilient, adaptable, flexible, and technically savvy to
navigate the evolving job market in business. Employers reiterate how it is crucial
for graduates to develop not only knowledge but skills to work under uncertainty and
further create solutions to problems in such an uncertain world [4]. Businesses also
need graduates or employees who are team players, who can work and collaborate
with teams both remotely and in person for acting under unprecedented situations.
Leadership skills are crucial to business success as, in most cases, employees are
placed in these vantage positions as major contributors to the business. Universities
need to embed leadership skills in their courses to make future leaders in busi-
ness become aware of such roles and responsibilities [2]. To this end, it becomes
imperative that students develop some ideas of how to apply knowledge and criti-
cally think to analyze and formulate problem solving approaches in their disciplines.
The higher order learning outcomes of critical analysis, synthesis, evaluation, and
problem solving are essential for students to develop for 21st Century jobs. Instead
of driving content in a foundation course like Principles of Macroeconomics, it may
be more relevant for the students to think of one BIG idea to learn at the end of
the course and beyond. Content overload may lead to stress and lack of interest in
learning [5, 6]. This paper discusses the application of learning in the context of
the uncertain real world using teamwork or collaborative assessment through team
presentation. The paper demonstrates that the process of working towards the appli-
cation of learning in a team-based presentation project has the potential to develop
valuable transferable skills or employability skills for business which can be useful
for making students job ready [7].
How Can Higher Education Contribute to the 21st Century … 59

3 The Big Idea

Among several Student Learning Outcomes (SLOs) of the Macroeconomics course,

one that is particularly relevant for this paper is that students should understand
concepts taught in the course and be able to apply these to real life situations in an
unknown context [8]. The present paper focuses on the impact of team formation
and collaboration on developing employability skills, or transferable skills, in the
case of synchronous virtual classes during the pandemic in 2020–2021 and in F2F
classes during the post-pandemic period of 2021–2022. The central concept of a
student-driven instructional model of active learning involving student engagement
[1], as opposed to passive or lecture-based teaching, pivots around the formation and
coordination within teams. This model includes innovative assessment techniques
via team presentations where student application of learning in an unknown setting
motivates higher levels of thinking and skills formation [9]. Additionally, the use of
teams to develop presentations allows students to explore the format of collaborative
learning through remote technology and team-building skills [10, 11]. Finally, instead
of heavy, content-driving learning, students have been encouraged to contemplate the
one “BIG IDEA” beyond the course—“How Can I Apply Macroeconomic Theory
to Real World Situations to Countries Outside The USA?”.

4 Collaborative Learning

Collaborative learning or group work such as a team presentation can serve dual
outcomes [10]. Besides fulfilling the task of delivering a team presentation, the
process leading up to the preparation of the project can help students develop multiple
employability skills or transferability skills. Underlying this idea of team presenta-
tion is the broader concept of using student-led active learning methods in a class-
room—virtual or F2F. It is proved that active learning through student engagement
in a classroom provides a better learning platform for students than the traditional
approach of discourse or lecture-based passive learning techniques [12]. In a passive
learning approach, students are mere observers in the learning process whereas in
the former students can be actively involved by “doing” as opposed to “learning by
listening” or “watching”. This paper considers collaborative learning in the context of
team formation and teamwork using remote technology in the Principles of Macroe-
conomics course. Students work with their teammates throughout the course and
collaborate on research to be presented at the end of the course. In the process of
creating teams and preparing for the team presentation, students can build several
transferable skills through roles and responsibilities within the project. These include
communication, leadership, technology, flexibility, adaptability, resilience, lifelong
learning, critical analysis, evaluation, creativity, and accountability [5, 6]. The paper
uses the methodology of self-study by the author to examine the techniques of collab-
orative learning using team formation, project preparation and student presentations.
60 S. Ganguli

The non-traditional method of assessment using peer evaluation of each other’s work
helps to understand the role of critical feedback in a job.

5 Methodology

The Self-Study Method has been used in understanding how non-traditional methods
of learning and assessment can be used in Principles of Macroeconomics course to
improve student attention, interest, and retention of learning. Since the 1990s, self -
study as a method of research in education contributed to teaching and public debates
on outcomes on learning [13–16].

6 Employability or Transferable Skills

Transferable skills are more general in nature and can be applied to the real world
such as a profession or workplace of graduates or interns. Transferable skills are
technology skills, communication skills- verbal or written, leadership skills, critical
or thinking skills, analytical skills, research skills, presentation skills, team building
skills among others [17, 18]. The role of a “community” [19] in a classroom (F2F
or virtual) can go a long way in fostering learning as well as developing technology
related skills and human skills. Since Artificial Intelligence (AI), cloud computing
and big data analysis are the features of Industrial Revolution 4.0 in the business
world, college courses are adapting to include these in the curriculum. Additionally,
since Artificial Intelligence (AI) is expected to make a lot of mundane, routine work
in business and healthcare obsolete by absorbing them, most graduates will need to
apply human skills to the jobs they will be tasked with [20, 21].
Resilience and adaptability are some of the important transferable or employa-
bility skills that have been identified as important by businesses in employees and
new hires [14]. Other important human skills are negotiation, business communi-
cation and leadership [17]. Application of learning, preferably using technology, is
also an important aspect for students to experience before getting ready for the job
market.

7 Student Engagement or Active Learning

Within an active learning framework involving student engagement, it is more effec-

tive to have small groups of students work with one another to complete a collabora-
tive project or regular assignments in the course. Again, instead of big groups, small
teams tend to perform better in terms of working together due to less complication in
arranging meeting times, scheduling collaborative work and supporting one another
How Can Higher Education Contribute to the 21st Century … 61

through the course [8, 22]. Five to seven students seem to be a desirable number in a
team where students can work comfortably among themselves to work on a project
which is large and intellectually demanding [3, 12, 23, 24]. The literature presents
various methods or ways in which an instructor can decide to create groups by
taking into account diversity of the class, such as educational and ethnic background
of students [10]. Some instructors let students self-select themselves [25]. One of
the serious problems of letting students self-select into groups, without considering
any other factor, could be lack of diversity in groups as friends tend to form a group
or unbalanced groups, and other issues. However, students forming self—selected
teams based on a common mutual interest among team members [25] can create a
robust platform for team formation and teamwork. Team formation and teamwork
lie at the heart of building employability skills among students in this research.

8 Relationship Between Active Learning and Student

Engagement and Transferable Skills or Employability
Skills

Employers usually want their employees to work in teams, interact with one another,
exhibit camaraderie and fellowship in teams while working on projects and to be
able to support each other collaboratively. While in a team, students learn to interact
with team members virtually through emails and zoom platforms or video calls on
WhatsApp outside of class for presentation preparation. Research and final team
presentation preparation help students to learn communication in writing and to
work using technology in creating presentation slides.
In this paper I will be discussing the idea of how formation of teams, using commu-
nity building techniques and student interaction in teams besides active participation,
can help in enhancing employability skills. The ability to work in a team can develop
social skills such as the skills developed in working with others—a transferable skill
that most employers expect graduates to possess. Group work can equip students with
technical skills while they work on the presentation. Businesses work globally and
the more students can align themselves to the use of technology and teamwork using
remote connectivity, the better they are prepared for the digital world of business [26].

9 Student Driven Model of Collaborative Learning

The paper uses a collaborative model of learning where several steps are taken up by
the student in teams after teams are formed as shown in Fig. 1. Community building
[19] and student engagement are the two pillars of this learning technique of “doing
using team presentation approach”.
62 S. Ganguli

Fig. 1 Steps in the process of team formation and presentation creation can give rise to
employability skills

9.1 Team Formation

Even before students think of self-selecting themselves in teams of three or four,

they, individually, need to be able to identify a country of choice with a rationale
as to why they are interested in traveling to the country or study the country. The
students interact on the learning platform on the very first day of class, where they
are instructed to write a brief introduction about themselves mentioning any inter-
esting facts about themselves or their backgrounds. Additionally, they mention which
country each one of them would be interested in travelling to someday and the reason
behind it. Students are also asked to read posts of their peers and reply to at least two
posts that interest them. Figure 2 provides an image of the instructions that I write
on the learning platform and request students to take a few minutes to write their
introductions and interactions with others. I carry out this activity in both F2F and
synchronous virtual classes.
The number of students in class on Day 1 was 43 (evident from the number of
threads posted) and the number of posts on this discussion topic was 120 which is
approximately three posts per student present in the class—an introduction posted
by each student and two reply posts per student to the other students in the class.
This is shown in Fig. 2.
I then move on to the next stage of the team formation which is written in the form
of a discussion post to be completed by students as team members once they have
formed their teams. Figure 3 shows my discussion post announcement at this stage.
The team’s name reflects the country students choose to study for their presentation
at the end of the term.
At the next step as identified in Fig. 1, teams are provided with a template which
they fill out using their creativity, knowledge, and skills in teams as their final country
presentation towards the end of the course. Filling this template with visuals, graphs,
tables after conducting research and analysis using technology driven tools takes
several weeks and various steps within the teams. Students meet in class and outside
How Can Higher Education Contribute to the 21st Century … 63

Fig. 2 No. of posts for introduction and country of choice. Reproduced from the learning platform
of Commonwealth University

Fig. 3 Discussion posts for students to respond to for team details and team member roles and
responsibilities. Reproduced from the learning platform of Commonwealth University

classes at their convenient times either virtually or in person for conducting research
on the macroeconomic questions posed in the template. This relates to the application
of learning in class in an unknown context of a country they are not very familiar
with. The presentation requires students to discuss various Macroeconomic vari-
ables in the context of their country of choice which they read and learned in class.
Teams undertake research of the country’s macroeconomics using various suggested
open data bases and information sources such as http://www.imf.org; http://www.
worldbank.org, http://www.oecd.org, http://www.unctad.org and others. The process
64 S. Ganguli

Table 1 Template provided to students for presentation preparation

Slide Expected content
Title slide Macroeconomics of <insert name of country>; Challenges Posed by Covid-19
Pandemic; Role of Government in the context of the pandemic
Cover Team: provide name and details of all members including team leader
slide
Slide 1 Three macroeconomic variables (1, 2, 3) for the last 5 years and pre- pandemic (so
between 2015 and 2019)
Slide 2 Analysis of your observations on 1, 2, 3 during 2015–2019
Slide 3 How chosen macroeconomic variables were affected during 2020 pandemic
Slide 4 Identify two or more macroeconomic policies—fiscal and monetary undertaken by
government
Slide 5 How has the government performed in terms of the policies? Explain with
reference to the policies you mentioned
Slide 6 References

of using technology, communicating with team members on the presentation prepa-

ration and taking up specific tasks in the presentation allows students to learn how
to work in a team and hence develop the soft skills of communication, negotia-
tion, accountability, leadership, time management, technology skills among others
(Table 1).

9.2 Team Leader and Member Roles and Responsibilities

As soon as the teams are formed, the team needs to elect its leader who is now
responsible for coordinating the activities of the team. Table 2 highlights the possible
roles and responsibilities of the team leader and that of the other team members.

Table 2 Roles and responsibilities of team leader and team members

Role Primary responsibility Traits in focus
Team leader • Team coordination • Leadership
• Overall timeline monitoring • Communication
• Any other • Negotiation
• Time management
Other team members • Research • Communication
• Presentation preparation • Technology
• Any other • Time management
How Can Higher Education Contribute to the 21st Century … 65

9.3 Peer Evaluations

A study of [11] shows that peer assessment has perceived benefits for students in an
introductory course in STEM. It shows evidence that students with different majors
can provide useful peer evaluations. Peer assessment can be used in beginner courses
in the university. In Principles of Macroeconomics Course at Commonwealth Univer-
sity, every team has the responsibility to evaluate and comment on each presentation
except their own. They receive anonymized evaluation from the rest of the teams, and
they provide the same to others. At the end of each presentation, students gather in
teams to discuss the presentation content, presentation style, analysis of the country’s
macroeconomic policies studies and suggested policies by the team. They use a peer
evaluation document provided to them by the instructor (in this case it is me) which
provides the basic structure to lay down their critical comments and pass them on to
the teams for considering future improvement. In the process students are made to
appreciate the importance of peer evaluation in business where stakeholder views of
the product remain critical. Figure 4 highlights the peer evaluation document which
asks each team a set of three reflective questions on the presentation content and their
rationale for highlighting the same. This provides students with some guidelines to
provide critical feedback to their peers and accept relevant feedback from others for
further enhancement of their presentation. In this case if students received a second
chance for presenting then they can easily draw on the critical comments and work
on those for improving future presentation. The process of peer evaluation has the
potential for developing critical thinking and feedback on others’ work.

10 Conclusion

The paper concludes that undergraduate students may be allowed to form teams
with the help of communication and technology even at the beginning of university
studies. Virtual/F2F interaction with teams using technology can enhance transfer-
able skills or employability skills among students to begin with. Working together
in teams to apply the macroeconomic concepts taught in the course to real world and
unknown country policies and government actions can develop life-long learners.
Team formation, collaboration and leadership experience gained in leading teams
by team leaders add to creativity, technology, leadership, negotiation, and communi-
cation skills. Post-secondary education, embedding skills development, can prepare
students to develop transferability skills needed for twenty-first century businesses.
Such initiative can further create better employment opportunities for graduates.
Businesses and universities need to exchange ideas and collaborate to create these
opportunities to fill the gaps in skills. AI and automation are certain to make a signifi-
cant number of jobs redundant in the industry. The remaining jobs need human skills
at a deeper and more pervasive level to battle the uncertainties of a dynamic business
environment threatened with climate change, global supply chain disruptions and
invasive technology.
66 S. Ganguli

Fig. 4 Peer evaluation document

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Innovation Through Computing Green
Marketing and Its Effect on Consumer
Purchase Intention

Yashodhan Karulkar , Pashmin Bandorawalla, Atreyee Banerjee,

Ajitha Vasudevan, and Mahendra Parihar

Abstract Recognizing the significance of environmental responsibility is crucial

in today’s world. Both businesses and consumers have a vital role to play in effec-
tively managing natural resources to reduce environmental impacts and financial
costs. It is imperative for every type of business to prioritize environmental respon-
sibility beyond legal obligations, ensuring the sustainability of our environment for
future generations. This paper focuses on understanding consumer reactions to green
marketing and its influence on their purchasing intentions. It also highlights prac-
tices that can foster environmentally friendly decisions and lifestyles, ultimately
contributing to the protection and preservation of natural resources for current and
future generations. The primary objective of this study is to identify the factors that
impact consumers’ intentions to purchase green eco-friendly products. To achieve
this, the research employs a simple purposive convenient sampling technique to
succinctly outline the research objectives. The findings of this study provide clear
insights into consumer behaviour towards eco-friendly products and the various
factors that shape their purchasing decisions.

Keywords Green marketing · Green purchase intention · Green awareness ·

Green perceived risk · Green perceived value

Y. Karulkar (B) · P. Bandorawalla · A. Banerjee · A. Vasudevan · M. Parihar

Mukesh Patel School of Technology Management and Engineering, SVKM’s NMIMS University,
Mumbai, India
e-mail: [email protected]
P. Bandorawalla
e-mail: [email protected]
A. Banerjee
e-mail: [email protected]
A. Vasudevan
e-mail: [email protected]
M. Parihar
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 69

A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_6
70 Y. Karulkar et al.

1 Introduction

Consumers today are more concerned about environmental degradation and nega-
tive impact of their uses of product and services on environment. The reason for
this concern could mainly be attributed to visible climatic changes, global warming
and increasing air and water pollution, etc. Thus, using green marketing not only
provides organizations an opportunity to meet consumer expectations and address
their environmental concerns, but also gain a competitive advantage and strengthen
their consumer base.
The term green marketing is often interchangeably used with environmental
marketing or ecological marketing. According to the American Marketing Associa-
tion (AMA), marketing of products that are presumed to be environmentally safe is
called as Green Marketing [1]. Thus, wide range of activities are covered under green
marketing, which includes modifying the product, making changes in the production
process and packaging, as well as modifying advertising or removing any activity that
impacts the environment in negative way. Today, the Earth faces more environmental
issues than ever before, hence it is imperative for companies to make and market them-
selves as environment friendly. Green marketing is emerging as a popular promo-
tional strategy owing to increased consumer awareness and concerns. The concept
of green or ecological marketing calls upon businesses to follow ethical and green
practices while dealing with customers, suppliers, dealers, and employees. Based
on this companies have started marketing themselves as green companies. A strong
correlation between consumers’ attention to companies’ green marketing communi-
cation and green purchasing behaviour was identified. The results also confirm that
individuals with higher educational levels and green attitudes and females are the
most attentive to companies’ green marketing communication [2].

2 Research Objectives

The fundamental objective of the paper is to study the effect of green marketing on
consumers’ purchase intentions, and involves the identification of multiple factors,
their interrelationships, and the extent of their respective influences on each other
and ultimately, on green purchase intention.

3 Literature Review

The term Green Marketing came into prominence in the late 1980s and early 1990s.
The green marketing concept is broad and includes market responses in the design of
products, production processes, packaging improvements, and advertising methods
[3–6]. The term has also been described as an organization’s efforts at designing,
Innovation Through Computing Green Marketing and Its Effect … 71

promoting, pricing, and distributing products that will not harm the environment [7].
Green marketing stimulates green consumption behaviour by encouraging consumers
to purchase green products, thereby reducing the generation of pollution. Encour-
aging consumers to contribute to the future of the planet by purchasing green prod-
ucts with less impact on the environment has become an important research topic.
Understanding the factors influencing consumers’ purchase intentions and decisions
is necessary to improve the fit between green products and consumer needs and
enhance market competitiveness [8].
Organizations apply green schemes to increase perceived value of their product
and decrease perceived risk of their goods. Green goods are very beneficial for
marketers because these are extra popular in the marketplace. Green promotion
includes actions to develop distinguishing, rating and promoting goods and services
that fulfil buyers’ environmental necessities. All these benefits firms get only if there
are green purchase intentions in the public [9–11].
Green Purchase Intention (GPI): Green purchase intention (GPIN) is simply
defined as an intention to buy a service or product which is less or not harmful for
the society and environment. It can also be defined as an internal wish, desire, and
willingness of the people to buy a less harmful and environmentally friendly product.
There is a developing trend in the people to use products that are less harmful for
the environment. They are willing to pay more for such products, which have less
effect on the environment. This willingness of the people to purchase environment
friendly products called green purchase intention. Companies should practice such
marketing activities that can influence consumer’s attitude and create their intention
to buy green products by changing the customer’s evaluation [8, 12].
In an Indian study exploring cognitive factors influencing green purchase inten-
tion (GPI), the relationship with attitude towards green products (AGP) and
green purchasing behaviour (GBP) was examined. The study identified significant
factors impacting GPI, including AGP, Environmental Concern (EC), and Perceived
Consumer Effectiveness (PCE). AGP also indirectly influenced GPI. However, the
impact of Perceived Environmental Knowledge (PEK) on both AGP and GPI was
limited. The study highlighted GPI as the primary predictor of GBP, serving as both
an independent and dependent variable. The findings emphasized the strong predic-
tive power of AGP on GPI, followed by EC and PCE. Notably, PCE had the least
positive and significant impact on GPI [8].
A study examined how the use of green marketing by Starbucks, a well-known
coffeehouse chain, influences consumers’ purchase intentions and brand image. The
study found that factors such as willingness to continue purchasing and using the
green brand, trust in the brand’s commitment to the environment, attachment to the
green brand, and satisfaction with the green brand had the most significant influ-
ence on consumers’ purchase intentions. These findings indicate that effective green
marketing can help Starbucks enhance consumer loyalty, expand its customer base,
and increase revenue [1]. Consumers trust to buy green product due to the following
72 Y. Karulkar et al.

reasons: The relationship between green perceived value and Starbucks consumer’s
green satisfaction is significant [13]. These findings are consistent with previous
research, which found that green perceived value is one of the most influential vari-
ables in increasing consumer green trust and satisfaction. Consumer satisfaction with
green products from Starbucks affects their trust in green products. These findings
are consistent with previous research, which found that green satisfaction has a posi-
tive and significant effect on green trust, indicating that the higher a product’s green
satisfaction, the higher the product’s green trust, and vice versa. Green Perceived
Value has no significant effect on Green Trust. Green Perceived Value for Starbucks
products does not have a direct impact on Green Trust. This finding is consistent
with other researchers’ findings that Green Perceived Value has a positive but non-
significant relationship with Trust (Green Trust) because the critical value obtained
is not significant. The indirect effect of Green Perceived Value to Green Trust via
Green Satisfaction is more valuable than the direct effect. The research discovered
a satisfaction variable (Green Satisfaction) that linked the perceived value variable
(Green Perceived Value) with trust (Green Trust) [13].
It was suggested that the current linear economic model, acknowledges the impor-
tance of transitioning to a sustainable and circular economy is unavoidable. Under-
standing how the public perceives green products and brands can be a key enabler for
the green product market’s rapid growth. According to the findings, respondents who
have a positive attitude toward green products have a higher level of green product
satisfaction, which is critical in the purchasing process. This is strongly related to the
level of knowledge about green products, which has an impact when viewed in the
opposite direction—the importance of a product being green predicts the purchase
of green products [14].
Environmentally conscious customers are more receptive to businesses addressing
environmental concerns. Green marketing has been successful by targeting indi-
viduals who already prioritize environmental issues. Higher education levels are
associated with a better understanding of the environment and a greater likelihood
of engaging in environmentally conscious behaviours. Consumers with green atti-
tudes, higher education levels, and females pay more attention to businesses’ green
marketing communications [2, 15].
As a result, soon, the scientific community should focus on reducing consumer
scepticism toward green products, while also implementing an effective form of
national regulation, because consumers want to ensure that green product claims are
valid, and that green washing is not present. As a result, policymakers’ roles become
critical if changes are to be seen soon. Social norms and motivational factors are the
ultimate determinants of our daily behaviour, and both can be shaped over time by
government intervention.
Innovation Through Computing Green Marketing and Its Effect … 73

4 Research Hypotheses

The following hypotheses are constructed by reviewing literature of previous studies.

Attitude (AGP) and Green Purchase Intention
Attitudes play a crucial role in consumers’ purchasing decisions, reflecting their
preferences and dislikes [16]. Recent studies conducted in India have demonstrated
the relevance of attitudes in relation to purchasing intentions and behaviours for
environmentally friendly products [7, 17]. Consumers with positive attitudes towards
green products are more likely to actively choose and purchase such products [18]. In
order to better understand attitudes regarding general green products and purchasing
intentions for them, the current study aims to understand the following hypotheses.
H1: Attitude towards green purchase is co-related to green purchase intension.
Environment Responsibility, Attitude Towards Green Purchase and Green
Purchase Intention
The hypothesis suggests that a higher level of perceived environmental awareness is
associated with increased purchasing behaviour for environmentally friendly prod-
ucts. This is because previous research has not extensively examined the direct
impact of environmental knowledge on buying intentions for such products [17].
Causal relationship between environmental awareness and purchasing behaviour for
green products is inconsistent, especially in developing countries like China and
India [19]. The level of perceived environmental awareness may be directly linked to
a favourable attitude towards green products in emerging economies, which in turn
influences the intention to purchase such products [7, 17, 19, 20]. Potential customers
already possess a significant understanding of current environmental issues, which
can positively influence their intention to purchase eco-friendly products. Addi-
tionally, prospective buyers associate the transition from conventional products to
green products with addressing the environmental problems of today. Brand Image
functions like a partial mediator in the link between environmental knowledge and
purchase intention. That is, either directly or indirectly, the purchasing intention of
potential customers can be influenced by their knowledge of various environmental
challenges [21].
H2: Environment Responsibility is related to attitude towards green purchase.
H3: Environment Responsibility has a relation to green purchase intension.
Green Awareness, Attitude Towards Green Purchase and Green Purchase
Intention
Green awareness (GAN) refers to consumers’ understanding of a product’s environ-
mental impact and its benefits. Higher knowledge about a product lead to a greater
likelihood of purchase. GAN plays a significant role in driving future green purchases
[22]. Brand knowledge and awareness influence customer response to marketing
efforts [23]. Customers with low knowledge and awareness of green products are
74 Y. Karulkar et al.

less likely to buy them. Consumers form opinions about environmentally friendly
products only when they actively seek information [24].
H4: Green Awareness is related to attitude towards green purchase.
H5: Green Awareness has a relation to green purchase intension.
Green Price, Attitude Towards Green Purchase and Green Purchase Intention
Numerous studies highlight pricing as the primary factor influencing consumer
purchasing decisions. The cost of green products poses a significant concern for
businesses. Green pricing refers to finding a balance between customers’ price sensi-
tivity and their willingness to pay more for environmentally friendly features. Price is
recognized as a strategic obstacle hindering consumer adoption of eco-friendly prod-
ucts. Price awareness and attitudes towards green products or green foods exhibit a
negative correlation, as price-conscious consumers are reluctant to pay a premium for
environmentally friendly items. However, there is a segment of customers willing to
pay extra for sustainable goods [25]. Consumers’ perceptions of value significantly
impact their inclination to purchase green products. When customers perceive organic
items as valuable, they are highly motivated to buy such products. Conversely, nega-
tive perceptions of value can deter consumers from purchasing natural products. It
is worth noting that the cost of green items tends to be higher compared to conven-
tional goods. Positive attitudes towards green products often involve a willingness
to pay a premium for environmentally friendly goods and services. The willingness
of consumers to purchase green or environmentally friendly products plays a pivotal
role in their current and future buying decisions.
H6: Green Price is related to attitude towards green purchase.
H7: Green Price has an influence on green purchase intension.
H10: Green Awareness influences green price.
H12: Green price and Green perceived value are related.
Green Trust
GPIN is determined by GPT [26]. Buyers would have a higher GPIN if they had a
positive encounter with the seller. Thus, GPIN was created by GPT. Customer GPIN
would be positively impugned by customer GPT [26]. Customer GPIN is positively
impacted by customer GPT [27].
H8: Green Trust is related to attitude towards green purchase.
H9: Green Trust has a relation to green purchase intension.
H11: Green Trust influences green price.
Green Perceived Value
The term “green perceived value” (GPV) refers to a customer’s perception of all the
features, benefits, and performance of a green product. The benefits and performance
Innovation Through Computing Green Marketing and Its Effect … 75

of green products are comparable to those of non-green products, and they are also
more environmentally friendly, which increases consumer perceptions of their value
and increases sales. In addition to having a significant impact on GPIN, GPV is a
crucial factor in sustaining long-term client relationships [20]. There is a favourable
correlation between GPV and GPT.
H13: Green perceived value has an impact on green purchase intension.
H15: Green perceived value has an impact on green trust.
Green Perceived Risk
Perceived risk refers to customers’ concerns that a product may not meet their expec-
tations and fail to satisfy their needs. Customers who perceive risk may opt not to
purchase a product to avoid potential disappointment or deception. The higher the
perceived risk, the greater the likelihood of a customer altering their buying decision.
Perceived risk encompasses uncertainty and unfavourable outcomes. In line with the
concept of perceived risk, individuals tend to minimize perceived risk to maximize
their utility [28]. Some businesses exploited this by labelling non-green products as
environmentally friendly, aiming to attract customers and boost sales. Customers are
now eager to reduce this habit [18]. If the risk were great, trust would decline and a
low GPIN would be produced. Reduced perceived risk would enhance the likelihood
that a product would be purchased and increase client buy intentions. Therefore, it
proved that GPR is negatively related with GPT If a customer has a high GPR there
is a low chance that the customer will buy the product [28]. Risk perceptions have
a strong positive relationship with negative consumption emotions. These negative
emotions have a significant and direct effect on customer’s trust [18, 29].
H14: Green perceived risk has impact on green purchase intension.
H16: Green perceived risk has an impact on green trust.
The effects of green perceived value and green perceived risk on green purchasing
intention as well as the function of green trust were examined using a framework
that was created. According to the study, green perceived risk has a negative impact
on both green trust and green purchase intention while green perceived value has a
favourable impact on both. Also, research revealed that green trust has a small but
significant influence on green perceived intention as well as its antecedents, green
perceived value, and green perceived risk. It concluded that resources should be put
towards boosting perceived green value and lowering perceived green risk in order
to increase trust and green purchase intention [3–6, 30].

5 Research Model

The following revised model—building on previous research [2, 8, 16–18, 21, 30–
32]- has been proposed (Fig. 1).
76 Y. Karulkar et al.

Fig. 1 Research model

6 Research Methodology

To test the relationships of the proposed model, a well-structured questionnaire

was used. The respondents were from the state of Maharashtra, Delhi, Bangalore,
Chennai, Gujarat, and West Bengal. The method of purposive convenient sampling
method was used for the study. A total of 200 responses were collected and analysed.
The models used for analysis are Chi-square method.
Data Analytics and Findings
A survey on the topic “Effect of Green Marketing on Consumer Purchase Inten-
sion” was conducted and each respondent’s perspective and response were studied.
There was a total of 200 respondents. The aim was to deduce the awareness amongst
people regarding green eco-friendly approaches and products and understand the
effect of Green Marketing on people’s purchasing intentions. A structured ques-
tionnaire was used to test the relationship of the proposed model in the quantita-
tive study. Indian English was used for field research because it is also an official
language in India. The questionnaire is divided into two sections. The first section
contains demographic information about the respondents or target population. For
collecting responses, we used the purposive convenient sampling method for people
Innovation Through Computing Green Marketing and Its Effect … 77

from across the country. We gathered data from people who fall between the age group
of 13–80. Collected data of their level of education, employment, and education to
get better insights about the kind of green knowledge among people. The second
part includes questionnaire items that use a multiple-choice question to assess Atti-
tude towards green purchase, Environment Responsibility, Green Purchase Intension,
Green Awareness, Green Price, Green Trust, Green Perceived Value, Green Perceived
Risk (Table 1).
Hypothesis Testing
Chi-squared = χ2 Critical Chi-square = χ2 , p-value = p.
Assumption: Level of significance = 90%.
i. H1: Green Attitude → Green Purchase Intention
While considering significance between GA and GPI, χ2 = 10.0865865 and
χ2 = 8.909358869. This gives a p value of 0.06897425.
Analysis: Chi-squared > Chi-squared (critical) and p-value < 0.1
Result: H1 can be accepted. The study shows significant relationship between
GA and GPI.

Table 1 Socio-demographic
Variable Category Frequency Percentage
distribution of respondents
Gender Male 109 54.5
Female 87 43.5
Prefer not to say 4 2
Age 13–19 14 7
20–25 160 80
26–35 8 4
36–45 1 0.5
46–60 15 7.5
61–80 2 1
Education High school 9 4.5
Bachelor’s degree 97 48.5
Post graduate degree 94 47
Employment Employed 55 27.5
Self-employed 14 7
Unemployed 13 6.5
Student 118 59
Income <10,000 112 56
10,000–20,000 14 7
20,000–50,000 28 14
50,000-1L 30 15
>1L 16 8
78 Y. Karulkar et al.

ii. H2: Environmental Responsibility → Green Attitude

While considering significance between ER and GA, χ2 = 22.3464617 and
χ2 = 12.59158724. This gives a p value of 0.00104768.
Analysis: Chi-squared > Chi-squared (critical) & p-value < 0.1
Result: H2 can be accepted. The study shows significant relationship between
ER and GA.
iii. H3: Environmental Responsibility → Green Purchase Intention
While considering significance between ER and GPI, χ2 = 32.6229004 and
χ2 = 30.30727194. This gives a p value of 0.04461541.
Analysis: Chi-squared > Chi-squared (critical) and p-value < 0.1
Result: H3 can be accepted. The study shows significant relationship between
ER and GPI.
iv. H4: Green Awareness → Green Attitude
While considering significance between GAw and GA, χ2 = 7.01796734 and
χ2 = 12.59158724. This gives a p value of 0.31918879.
Analysis: Chi-squared < Chi-squared (Critical) and p-value > 0.1
Result: Accept Null Hypothesis. Reject H4. No significant relationship
between GAw and GA.
v. H5: Green Awareness → Green Purchase Intention
While considering significance between GAw and GPI, χ2 = 30.8364514 and
χ2 = 28.41198058. This gives a p value of 0.05738692.
Analysis: Chi-squared > Chi-squared (critical) and p-value < 0.1
Result: H5 can be accepted. The study shows significant relationship between
GAw and GPI.
vi. H6: Green Price → Green Attitude
While considering significance between GP and GA, χ2 = 0.92999645 and
χ2 = 5.991464547. This gives a p value of 0.62813622.
Analysis: Chi-squared < Chi-squared (Critical) and p-value > 0.1
Result: Accept Null Hypothesis. Reject H6. No significant relationship
between GP and GA.
vii. H7: Green Price → Green Purchase Intention
While considering significance between GP and GPI, χ2 = 5.93978199 and
χ2 = 4.351460191. This gives a p value of 0.09877278.
Analysis: Chi-squared > Chi-squared (critical) and p-value < 0.1
Result: H7 can be accepted. The study shows significant relationship between
GP and GPI.
viii. H8: Green Trust → Green Attitude
While considering significance between GT and GA, χ2 = 13.8448371 and
χ2 = 18.30703805. This gives a p value of 0.18018745.
Analysis: Chi-squared < Chi-squared (Critical) and p-value > 0.1
Result: Accept Null Hypothesis. Reject H8. No significant relationship
between GT and GA.
Innovation Through Computing Green Marketing and Its Effect … 79

ix. H9: Green Trust → Green Purchase Intention

While considering significance between GT and GPI, χ2 = 41.8054153 and
χ2 = 37.65248413. This gives a p value of 0.01885745.
Analysis: Chi-squared > Chi-squared (critical) and p-value < 0.1
Result: H9 can be accepted. The study shows significant relationship between
GT and GPI.
x. H10: Green Awareness → Green Price
While considering significance between GAw and GP, χ2 = 5.03723271 and
χ2 = 5.988616694. This gives a p value of 0.1211311.
Analysis: Chi-squared < Chi-squared (Critical) and p-value > 0.1
Result: Accept Null Hypothesis. Reject H10. No significant relationship
between GAw and GP.
DEDUCTION: will have relation at lower significance.
xi. H11: Green Trust → Green Price
While considering significance between GT and GP, χ2 = 5.62101052 and
χ2 = 11.07049769. This gives a p value of 0.344859.
Analysis: Chi-squared < Chi-squared (Critical) and p-value > 0.1
Result: Accept Null Hypothesis. Reject H11. No significant relationship
between GT and GP.
xii. H12: Green Price → Green Perceived Value
While considering significance between GP and GPV, χ2 = 4.79223899 and
χ2 = 9.487729037. This gives a p value of 0.30928687.
Analysis: Chi-squared < Chi-squared (Critical) and p-value > 0.1
Result: Accept Null Hypothesis. Reject H12. No significant relationship
between GP and GPV.
xiii. H13: Green Perceived Value → Green Purchase Intention
While considering significance between GPV and GPI, χ2 = 27.5922175 and
χ2 = 26.49758019. This gives a p value of 0.02543563.
Analysis: Chi-squared > Chi-squared (critical) and p-value < 0.1
Result: H13 can be accepted. The study shows significant relationship between
GPV and GPI.
xiv. H14: Green Perceived Risk → Green Purchase Intention
While considering significance between GPR and GPI, χ2 = 23.0200035 and
χ22 = 31.41043284. This gives a p value of 0.28781339.
Analysis: Chi-squared < Chi-squared (Critical) and p-value > 0.1
Result: Accept Null Hypothesis. Reject H14. No significant relationship
between GPR and GPI.
xv. H15: Green Perceived Value → Green Trust
While considering significance between GPV and GT, χ2 = 44.6673179 and
χ2 = 31.41043284. This gives a p value of 0.00122399.
Analysis: Chi-squared > Chi-squared (critical) and p-value < 0.1
Result: H15 can be accepted. The study shows significant relationship between
GPV and GT.
80 Y. Karulkar et al.

xvi. H16: Green Perceived Risk → Green Trust

While considering significance between GPR and GT, χ2 = 26.5379584 and
χ2 = 26.49758019. This gives a p value of 0.03034591.
Analysis: Chi-squared > Chi-squared (critical) and p-value < 0.1
Result: H16 can be accepted. The study shows significant relationship between
GPR and GT.

Findings
Our revised model after analysis and testing every hypothesis: (i) Green Atti-
tude and Green Purchase Intention have a significant relation (ii) Green Attitude and
Environment responsibility are related. (iii) Environment Responsibility influences
Green Purchase Intention. (iv) Green Awareness effects Green Purchase Intention.
(v) Green Price influences Green Purchase Intention. (vi) Green Trust has relation to
Green Purchase Intension. (vii) Green Perceived Value affects Green Purchase Inten-
sion. (viii). Green Perceived Value is related to Green Trust. (ix). Green Perceived
Risk depends on Green Trust (Fig. 2).

Fig. 2 Revised model after analysis and testing every hypothesis

Innovation Through Computing Green Marketing and Its Effect … 81

7 Discussion of Results

Our Study demonstrates the relation between Green Purchase behavior and other
inter connected factors. Out of the 16 hypotheses proposed, our study accepts 9 of
them. Our findings suggest that Green Attitude affects the Green Purchase Intention
of the consumer. Research conducted by other authors also support our claim [8].
Green Attitude also showed a relation to environmental responsibility, proving that
consumers with environmental knowledge and responsibility have a positive green
attitude [8]. Environmental responsibility has an influence on Green Purchase Inten-
tion. This finding is in line with previous research reviewed [8–12, 18, 21, 33, 34].
Customers with high level of environmental responsibility tend to understand the
importance green and eco-friendly purchasing. Our study shows that green aware-
ness has a relation to Green Purchase Intention which is contradictory to research
reviewed [18]. However, there is no relation between green awareness and attitude
towards green purchase. Green Price has an impact on Green Purchase Intention
proving that people are price sensitive when it comes to buying green products.
Marketeers must evaluate the Green Pricing for better results [2, 15, 25, 32, 33, 35–
39]. Green Trust has a relation to Green Purchase Intention which is also confirmed by
previous research [2, 18, 25, 33, 40–43]. There exists positive relation between Green
Perceived value, Green Trust, and Green Purchase Intention. This is supported and
analyzed by authors of multiple research papers [2, 18, 25, 33]. Our study supports
the hypotheses that Green Perceived Risk is related to Green Trust, however the claim
that Green Perceived Risk impacts the Green Purchase Intention was not significant.
This finding differs from that of previous research which states the opposite [18].
Our research did not support certain hypotheses. This study did not find signifi-
cant relation between Green Price and Green Perceived value, negating the research
viewed during literature review [30]. There was no significance between Green Trust
and Green Price. Some research suggests otherwise [25, 30, 33]. No relation between
Green Awareness and Green Price, Green Trust and Green Awareness, Green Price
and Green Attitude [2, 18, 25, 30, 32, 35, 39, 44].

8 Pratical Implications

The study’s practical implications suggest that companies and organizations focused
on environmental sustainability should target young customers, educate them about
their products, and assure them of their availability. The research highlights that
willingness to pay is a strong predictor of green purchasing behavior among young
students. Therefore, marketers and policymakers should emphasize the cost of
environmentally friendly products to encourage young consumers to make green
purchases. It is important for businesses and organizations to consider the afford-
ability and accessibility of green products. The study’s findings can serve as a valu-
able resource when developing green marketing strategies for the Indian market.
82 Y. Karulkar et al.

They can guide the implementation of environmentally friendly marketing tactics and
advertising campaigns that raise consumer awareness. Decision-makers can utilize
these findings to create programs aimed at improving green purchase behavior, as
consumers are more likely to buy green products when provided with such initia-
tives. The positioning of green brands plays a crucial role in influencing green
purchase behavior, so it is important for marketers and management to emphasize
the value of green products and minimize environmental risks by maintaining trans-
parency in their organizational processes. Additionally, governments can contribute
by producing documentaries on environmental issues and providing guidelines
for reducing environmental impacts, which can enhance consumer awareness and
knowledge of environmental concerns.

9 Limitations and Future Research

The study has limitations in terms of geographical scope, sampling method, and the
generalizability of results. It focused on specific areas in India and used purposive
convenient sampling, mainly targeting well-educated young adults. Therefore, the
findings cannot be generalized to the entire Indian population. Additionally, the
study only examined expressed behaviour rather than actual purchase behaviour,
leaving room for further exploration on how expressed behaviour translates into
actual behaviour. Future research could employ a longitudinal approach to study
variations in purchase behaviour over time. The study also did not consider the
influence of consumers’ personality variables, which could be incorporated into
future studies. Furthermore, researchers could explore the relationships between the
proposed model and other cognitive measures such as green brand, environmental
advertising, and green value to better understand green consumerism in the Indian
and Asian markets. Lastly, investigating the role of consumer scepticism in shaping
responses to green branding efforts should be a focus for future researchers.

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The Actual Impact of Metaverse
on the FinTech Industry

Anas Ali Al-Qudah

Abstract This paper theoretically discussed the Implications of Metaverse in the

Financial Sector based on facts and statistics already published around world. The
most important fact is that the rapid advances in technologies in the past decade have
certainly paved the way for an alternate financial order and Metaverse might be the
big bang event for the existing financial order. Accordingly, Metaverse and related
technologies may democratize the financial system and may enable communities to
manage their economies rather than following the diktat of a centralized institution.
In the near future the new technological advances will create new avenues of wealth
creation for the financial sector and may require a totally different set of skills to be
employed in the financial sector workforce.

Keywords Metaverse · FinTech · Financial industry · Cryptocurrency

1 Introduction

The metaverse’s impact on the financial services sector embodies the next evolu-
tionary stage in banking and fintech industry. Starting from the era of traditional
banking where one-to-one customer interactions at the branch were de rigueur, with
nil or very little customization—with a one-size-fits-all approach in terms of customer
offerings—banking moved on from physical branch interactions to online or internet
banking, with all banking transactions conducted through the mobile and internet.
Even cash withdrawals didn’t necessitate a visit to the branch since automated teller
machines (ATM) became the new normal [1].
Then came the advent of open banking allowing customers to access their bank
accounts via third party apps, which allowed direct linkage of bank accounts and
related services with apps using application programming interfaces (APIs), which
even cut down on the visits to ATMs. The fourth (r)evolution was the dawn of fully

A. A. Al-Qudah (B)
Liwa College, LC, Abu Dhabi, United Arab Emirates
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 85

A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_7
86 A. A. Al-Qudah

digitalized finance banking involving web 3.0, or in other words, using blockchain
that gave rise to NFTs and cryptos [2].
Metaverse represents the fifth stage of the evolution in the banking and fintech
industry, offering customers the experience of virtual banking. In a sense, one can
say that the metaverse allows for the return of personalized banking with the help of
virtual or augmented reality (VR/AR) [3].
By the end of this decade, it’s widely expected that about 50% of banks globally
will be using AR/VR as an alternative channel for customer transactions as well as for
employee engagement. For instance, Bank of America has launched a VR training
program for its employees that simulates real life customer interactions while BNP
Paribas NSE 0.11% has launched an app that allows customers to conduct banking
transactions using VR [4].

2 Metaverse: Implications for the Financial Sector

The technological evolution witnessed in the last two decades or so has been exponen-
tial to say the least; the velocity with which the technology has evolved, particularly
in cyber space, is difficult to fathom. People in their 30s and 40s could still remi-
nisce about the struggle of finding a stable internet connection or could recall the
never-ending wait to download a MB size file. As of the beginning of 2022, total
estimated global internet users amount to 5.2 billion (66% of the world population),
a number that has grown from 16 million in 1995 when the internet was launched
in the public domain [5]. Cyberspace has fast progressed from being a medium of
communication and stored knowledge to being an efficient platform for business and
trade; the transformation has been further accentuated by the onset of COVID-19.
To put things into perspective, in 2019 (pre COVID-19) annual e-commerce sales
were estimated to be USD 3.3 trillion, whereas the figure has reached an estimated
USD 5 trillion for the year 2021 [6]. It is estimated that the e-commerce sales will
cross the USD 6 trillion mark by 2023 accounting for more than 22% of global retail
sales [7].

3 The Next Leap

The next phase in this Tech-Volution (technological evolution) is the advent of web
3.0 and penetration of Metaverse (virtual reality) in financial services. A crude way
of defining Metaverse would be that “it is a way for consumers and businesses to
interact in the virtual space using enhanced virtual reality technologies, where goods
and services can be traded”. Human interaction with the virtual world is not a novel
idea as it has been used in some shape or form in gaming platforms. Metaverse
will extend the application of virtual reality technologies from the entertainment and
gaming industry to other aspects of life [8]. Experts envisage Metaverse reshaping the
The Actual Impact of Metaverse on the FinTech Industry 87

landscape of global economy and particularly the financial services sector. Metaverse
is expected to have a 360° impact on the financial services sector from customer
engagement and onboarding to creating new products and business divisions, while
rendering others redundant [9].

4 Recent Developments in the Financial Sphere

Using the metaverse as a way of interacting with customers is probably the most
likely way that financial services companies will initially utilize the metaverse. For
example, Kookmin Bank (one of the largest banks in South Korea), has created
a virtual town consisting of a business center, a telecommunications center, and a
recreation area on a Metaverse platform [10]. BNP Paribas has launched a VR (virtual
reality) app that allows customers to use VR in their banking transactions, including
account opening while Citibank has tested holographic workstations for financial
trading. Employees play a critical role in amplifying a financial institution’s brand
[11], in this regard, Bank of America intends to conduct VR training for 50,000
employees. Recent research conducted by the Digital Banking Report shows that
47% of banking executives believed that customers would use augmented reality/
virtual reality as an alternative channel for transactions by 2030 [12].
Web 3.0 hinges on “decentralization” and DeFi (decentralized finance) institutions
are already emerging on the horizon, such as EQI Bank. Founded in 2018, EQI Bank
is a fully regulated financial institution that allows its customers to deposit crypto
and traditional assets [13]. The bank offers payment solutions for the real and the
virtual world, e.g., the bank issues a debit card to its customers that can be used to
pay for assets such as buying a piece of virtual land in certain Metaverses [14].
The advancement of Metaverse economies will be based upon adoption of cryp-
tocurrencies as a medium for financial transactions. Cryptocurrency is very important
for virtual financial ecosystems as it gives users a simple, secure, and transparent
way to transact [15]. Thus, the importance and the role of fiat currencies (curren-
cies issued by central banks) is expected to diminish as more and more business is
undertaken in these virtual financial ecosystems.
Metaversials-users of Metaverses—can fully own their virtual lands and spaces
in the Metaverse. The underlying blockchain enables users to prove ownership of
the asset and develop their virtual real estate as they wish. The implications of this
digital real estate revolution are being felt in an emphatic fashion; Republic Realm (a
digital property investment fund) bought a parcel of virtual land for more than USD
900,000 [15].
As evident from the above, progression in the development of Metaverse will
create new types of transactions and novel modes of ownership, necessitating a need
for transparent insurance products and services and for policies and regulations that
consider the vastly different landscape of decentralized finance. Collaborations and
partnerships between traditional institutions and FinTech companies will be key
as we move towards adopting web 3.0 [16]. Insurance companies might have to
88 A. A. Al-Qudah

create policies to cover specified risks to smooth functioning of Metaverses such

as non-physical losses of virtual assets, hackings, data theft and network outages,
etc. Metaverse and Web 3.0 will use blockchain technologies in ways previously
unimagined for insurers, that means a strong commitment to innovation and tech
adoption will be crucial for success [17].

5 Challenges

The advent of web 3.0, Metaverse and digital assets and currencies will cause serious
disruption to the financial status quo [18]. At this point it is difficult to comprehend
the scope and depth of this disruption and cumbersome to envisage, with certainty, the
future of the financial services sector [19]. Having said that, one thing that is certain is
the complexity involved in regulating decentralized digital assets and virtual market-
places. Regulators around the globe already had their hands full with regulating
crypto assets, and their woes will only increase with the emergence of Metaverse
[20].
Financial integration of global financial markets and economies has been the back-
bone of globalization [21]. Furthermore, financial services have become increasingly
centralized as regulators find it easier to implement controls in a centralized system
[22]. The arrival of decentralized financial institutions and marketplaces will pose a
serious challenge to the existing financial order which relies on centralization [23].
Moreover, as mentioned earlier, decentralized currencies (cryptocurrencies) will have
an impact on the effectiveness of fiat currencies, which in turn will have an impact
on the ability of central banks to implement desired monetary policies [24, 25, 26]

6 Conclusion

The cornerstone of the prevailing financial order is control, centralization, and

concentration of wealth. Rapid advances in technologies in the past decade have
certainly paved the way for an alternate financial order and Metaverse might be the
big bang event for the existing financial order. Metaverse and related technologies
may democratize the financial system and may enable communities to manage their
economies rather than following the diktat of a centralized institution. The existing
financial system is dominated by systemically large financial institutions (institu-
tions that are too big and important to fail); decentralization of the financial system
may erode the hegemony of such financial institutions. These technological advances
will create new avenues of wealth creation for the financial sector and may require
a totally different set of skills to be employed in the financial sector workforce.
The Actual Impact of Metaverse on the FinTech Industry 89

Author Contributions AAA-Q prepared this article as a single author.

Funding
This work is funded by Liwa College of Technology in Abu Dhabi (UAE) under Research Grant:
IRG-BIT-002-2021.

Data Availability
The author confirms that all relevant data are included in this manuscript, and all sources are well
cited.

Declarations

Conflict of Interest Author states that there is no conflict of interest.

Ethical Approval Author confirms that the manuscript follows compliance with ethical standards;
author confirms that the study does not need any approval from any Ethics Committee.
Consent to publish “Not applicable,” manuscript does not contain data from any individual
person.
Informed consent: Not applicable.

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The Nexus Between Blockchain, Crypto
Currencies and AI: With Case Study

Mohamed Bechir Chenguel

Abstract After revolutionizing the health, automotive and the insurance industries,
artificial intelligence is now changing the approach to trading, using blockchain. In
addition to simplifying certain tasks perceived as tedious in the long term, AI offers
crypto currency traders a new dimension that is more secure, confidential, and bene-
ficial to their investment. Thus, maximizing profits while limiting losses. Through
our research, we have attempted to examine the nature of the relationship between
these two new technological concepts, namely artificial intelligence, blockchain and
crypto currencies. The results of our analyses show that the relationship between AI
and blockchain is two-way. AI is at the service of the blockchain, and vice versa.
In addition, crypto currency traders require AI to control the volatility of virtual
currencies. In addition, AI strengthens blockchains security. The latter is used by AI
to provide it with the huge amounts of data it needs. Our contribution is that AI has
now become and will be in the future the ultimate tool for all future technologies to
facilitate human tasks.

Mots cles Blockchain · Crypto currency · Trade · Robot · Artificial intelligence ·

Web3

Jel Classification F30 · M15 · O30

1 Introduction

In the early 2000s, the financial crisis that took place at that time favored the emer-
gence of blockchain. Very quickly, investors from all over Europe the United States,
and Asia, started investing in platforms specializing in crypto currencies. And while
the market has had its ups and downs, today its value has hovered around the $339

M. B. Chenguel (B)
Kairouan University, Kairouan, Tunisia
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 91

A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_8
92 M. B. Chenguel

billion mark. In parallel with the growing evolution of the blockchain, artificial intel-
ligence and big data are gradually becoming part of our daily lives [1–3]. Over the
past few years, AI has gained popularity. Currently, more an increasing number of
traders cannot do so without making a new digital currency investment [4]. Thanks
to advancements in AI, they can now access more detailed analytics and statistics
before making any decisions. Bots offer them a simple and effective way to identify
the most profitable choices in a short period of time. They hope to obtain better
return on investment. The Crypto currency operates on the same principle as the
stock market. Just as the stock market can quickly go down or up, the value of
virtual currencies is very volatile overnight [5, 6]. Changing legislation, an emerging
potential player or even mining problems, the reasons for this rise or a sudden fall
in blockchain products would probably never fit in a list. Indeed, the parameters to
be considered are so numerous that it is impossible to make a precise prediction of
price variations at a given moment. This is where AI solutions come in. With systems
equipped with artificial intelligence, everything seems simpler [7]. They can collect
millions of data per minute or even per second and offer you advanced predictive
analysis of any blockchain transaction. The emergence of crypto currency support
tools that integrate artificial intelligence leads to faster and stronger volatility. At the
speed of the internet, they allow you to benefit from a new form of trading: stock
market 2.0. Through this research work, our contribution is to see more closely how
artificial intelligence has been able to integrate into the world of crypto currencies
and how AI tools have been able to improve the use and optimization of crypto
currency users. Our work will be presented as follows, in a first section we will
present crypto currencies and artificial intelligence, and in a second part we will
present the interaction between artificial intelligence and crypto currencies, and in
a third part we will present a case study of an artificial intelligence and its use by
traders in the management of crypto currency portfolios.

2 Definition of the Concepts

Artificial intelligence, commonly known as “AI”, is a technical concept that attempts

to integrate human knowledge into machines. It can be said that the devices will
be feasible to perform the actions that generally require human intelligence [2, 8–
11]. For example, the lights will turn on automatically when you enter the room,
the refrigerator will perform operations on its own, and there will be self-driving
cars. Nowadays, it has entered several fields and every organization is becoming
more and more mechanical. It has already established its position in the market
and there are hardly any companies or firms left whose devices do not have AI
technology [12–17]. Crypto currency can be termed as virtual currency which can be
used to transact on digital platforms [18, 19]. It was an important step in regulating
economic fluctuations and creating economy without inflation. It has opened new
fronts to empower individuals in economic aspects. In fact, people use it to override
The Nexus Between Blockchain, Crypto Currencies and AI: With Case … 93

government rules and regulations. However, with the positive aspects of this new
technology, it can be said that it has become a necessity in today’s digitized world
[12, 20–23].

2.1 Artificiel Intelligence Features

It is true that machines have no bias between two individuals. All investors seem
important and crucial to them. In fact, it seems like a blessing for those companies
that need people to invest in their projects. But they fear that investors are unable to
make decisions on their own and generally rely on others, which has a huge impact
on their business. In this scenario, AI helps investors make rational and logical
decisions [24, 25]. Thus, the automatic trade is activated, which leads to the growth
and development of several projects and ultimately to the increase in the supply of
money in the economy [14–17, 26]. So, in the world of crypto currencies which is
more or less like institutional markets which generate data in megabytes, the task will
be much easier if coupled with AI. This is because AI allows big data to be sorted in
a shorter time and investment decisions can be made in less time and instantly [3, 23,
27]. There is no doubt at all that machines can outperform human beings [28]. Crypto
currencies can be traded on blockchain platforms which are highly secure, reliable,
and transparent. These are freed from centralized administration and are flexible in
terms of performing operations. AI tools, if integrated with blockchain platforms, will
also perform the functions according to the integral approach [26]. These tools help
identify common patterns and develop executable strategies for them. In this way,
these strategies can be used to earn money from the tokens that crypto currencies
allow. Also, the integration of AI and crypto currencies is an integrated approach
towards creating decentralized networks [29]. If processes become mechanical, then
organizations will not have to hire large numbers of human resources to perform
operations. This will save the cost of an organization and payment gateways will
also become transparent and secure with blockchain [9, 30]. There are platforms
that release payments automatically as soon as the task is completed. Thus, it can
be said that crypto currency is real-time money because it can be transacted in
seconds [31]. Trading or investing processes are the riskiest task in the economic
world [32]. Cyber fraud and malicious attacks from hackers and third parties are on
the rise. People can invest freely as there is no fear of cyber attacks because smart
contracts are the strongest and most robust platforms where financial transactions
are 100% safe [16]. They are considered the best options to speed up investment
procedures. They also allow them to diversify their portfolios and earn considerable
sums in return. Investors will not have unnecessary fears in mind. All of the above
aspects are common, but the potential of AI and crypto currencies remains to be
seen. The change the internet brought to the world 20 years ago will happen again
through AI and crypto currencies. With the integration of AI and crypto currencies,
trade execution will be limitless, diverse, and much easier. In addition, it will be
a dedicated and trustworthy network [27]. The volatile market environment can be
94 M. B. Chenguel

analyzed better using machines than human brains can. AI-based technologies can
accurately predict market consequences. There are many companies that practically
develop the applications capable of performing both AI and crypto currencies.

2.2 The New AI Lexicons

As with all advanced technologies, it is difficult to understand the lexicon. To clarify

this aspect, we will define the different terms used. What is web3? More than a
new technology, web3 is a real revolution, a paradigm shift in the world of the
web. To better understand web3.0, it is necessary to go back in time and take up
the different phases of the web. (web1, web2) [33]. Initially, the internet was an
online encyclopedia that allowed information to be consulted but without interactive
content. The content was limited to light texts or images. The web2 is the web of
cookies: In addition to reading and consuming the content, we can interact with it.
The sites may collect our usage data to send us targeted advertisements, we can pay
online and interact with other users [23, 34]. The improvement of internet connection
infrastructures, thanks to fiber optics, 3G and 4G, has made it possible to offer more
diversified content, with videos, sounds, better quality images and even 3D content
[35, 36]. The web2 is characterized by social networks, in fact we no longer only
consult the internet, and we participate in it. The considerable increase in the number
of users has led to an explosion in the amount of data generated by web2.0, so much
so that user data has become the basis of the business model of many tech giants.
Web2.0 is the symbol of centralization, a handful of companies control the data, and
the digital world [3, 26]. The data of more than 80% of the population is stored in
the data centers of Google, Amazon, Twitter, etc. The web 3.0: Web3.0 takes up
the principle of peer to peer, or decentralization, on which the blockchain is based.
Rather than the data being centralized in the data centers of large companies, it is
stored in a decentralized way and in several pieces and distributed among all the
participants of the network. NFT concept: An NFT, or Non-Fungible Token, is a
digital asset that takes the form of an image, sound, video, etc. It is attached to at
least one owner via a digital identity (wallet) [3, 19]. Each NFT is associated with
metadata that contains its basic information, such as the identity of the owner and
the creator [37]. This metadata is recorded in a blockchain, which secures and makes
NFT transactions more transparent. Even though the basic use of NFTs is purely
artistic, they have a lot of applications in different industries. LVMH, for example,
associates each luxury handbag with an NFT that the owner of the bag transfers to
the buyer if he resells it. This helps to fight counterfeits.
Metaverse concept: Both web3 and NFT have contributed to the design of meta-
verses. Metaverses are virtual spaces that will create new forms of interaction between
users. It is a new form of internet that is closer to reality [38]. We can attend virtual
events completely recreated in 3D (such as concerts or weddings), we can watch
sporting events in a more immersive way, work with colleagues, study from home
with a VR headset, etc.
The Nexus Between Blockchain, Crypto Currencies and AI: With Case … 95

3 Artificiel Intelligence and Blockchain

The applications of artificial intelligence for all technologies that rely on the
blockchain are numerous. AI is involved in crypto currency trading, in the gener-
ation of NFTs or even for the construction of the metaverse [11, 14]. Crypto
currencies are known for their high volatility which makes predictions very difficult.
Nevertheless, some time series analysis techniques such as LSTMs make it possible
to predict market trends, even if the models are much less efficient than for the stock
market [6, 14].

3.1 Artificial Intelligence and Its Security Role

for the Blockchain

AI technologies are used not only to obtain predictive analyzes of its financial assets
on the 2.0 stock market but also to secure the blockchain. Indeed, although it is attrac-
tive, the universe of crypto currencies still has some flaws. These flaws, malware
detect them in less than a minute and changes the course of virtual currencies fraud-
ulently [1]. To better secure the blockchain, many committed players are leaning
towards solutions designed with algorithms equipped with artificial intelligence. It
would indeed be an easier way to reduce fraud and secure your assets in this world
where volatility can turn everything upside down. AI goes even further by securing the
mining of crypto currencies. Moreover, in addition to simplifying and securing trans-
actions, the use of AI graphics cards in mining considerably reduces the exploitation
of the energies necessary for the transfer of earnings [39, 40].

3.2 Blockchain at the Service of AI

The uses of artificial intelligence for blockchain were easy to find, as AI is already
quite mature and research on this topic is already in place. Decentralized AI orig-
inated from the need to secure the data used to train a model. Decentralized and
encrypted storage ensures data security and prevents falsification or loss. Blockchain
can improve data traceability. The strength of the blockchain today lies in its secu-
rity. This is what makes it usable for large financial transactions. When training an
artificial intelligence model, you need to validate the provenance of the dataset. On
the one hand to better assess the quality of the data and avoid leading to a biased
AI. On the other hand, to ensure that the data has been collected in accordance with
the regulations in force [20, 21]. When you transfer a dataset, you transfer an asso-
ciated NFT. This operation would make it possible at any time to verify the origin
of the dataset and to go back to its creation. Each action performed on the dataset
can be recorded and visible. Still with a view to making the use and training of
96 M. B. Chenguel

models more ethical, the blockchain can offer more transparency as to the models
that are offered on the different platforms and facilitate collaboration [41]. Thus,
Microsoft has created a framework, Sharing Updatable Models, for the collaborative
maintenance of machine learning models [42, 43]. The machine learning model is
initially built via a smart contract on the Ethereum blockchain and it is open access,
you can use it by paying the gas fees of the network. The user can then modify the
model or add training data to make it more robust. The modifications are then tested
in an automated way, from an initial test dataset which remains unchanged. If they
have contributed positively to the performance of the model, the user is rewarded,
otherwise he is penalized. The rewards are given either in the form of points on the
platform, or in the form of financial compensation. The principle of points is very
similar to that of Stack overflow and is based on the choices of other users to validate
or not the proposed modifications. Financial compensation is calculated via another
public smart contract and is based on several criteria such as the performance gain
or the size of the dataset provided. As often in the world of blockchain and web3, the
success of this type of project depends on the ability to create a dedicated and trusted
community. The issues related to artificial intelligence and blockchain go beyond
the purely technological framework and will challenge the entire web economy [13,
44]. The end of cookies implies the end of targeted advertising and therefore the
questioning of the business models of several tech giants. AI, as in all fields, will
be an important tool in the new world. Both for its construction and for its mainte-
nance. Conversely, the blockchain will make AI more secure, more ethical and more
collaborative, we will talk about decentralized AI. Important problems, such as the
anonymization of data from certain industries, which until now remain difficult to
deal with, could be solved via the blockchain.

3.3 The Impact of AI on Crypto Currencies and Blockchain

Artificial intelligence can be used to analyze market trends and predict outcomes,
also it can be used to determine the evolution of the price of cryptocurrencies [45,
46]. AI is suitable for automated trading, which can be very useful in periods of high
volatility, when it is not possible to analyze the market situation for a long period of
time.
AI offer better security of user funds, in fact AI can provide additional protection
to user wallets against unauthorized access or theft of their funds. In addition, AI offer
more reliable prediction of market trends and improve the consensus mechanisms
[14]. It will be more efficient than PoW (proof of work) or PoS (proof of stake). AI
can also be used to match buyers and sellers, as well as help make predictions using
algorithms [47].
The Nexus Between Blockchain, Crypto Currencies and AI: With Case … 97

For the Reduction transaction costs, the use of AI can help to reduce transaction
costs by eliminating intermediaries. AI will be used in the blockchain, and cryptocur-
rency world is to enable a whole new set of applications that are not possible without
it. For example, an AI-powered autonomous agent can make decisions based on data
provided to it. Based on this data, it can automatically buy and sell cryptocurrencies
on exchanges or even invest in token sales [5, 48]. Some have even gone so far as to
say that it will be possible for an AI-powered autonomous agent to create their own
cryptocurrency, funded by crowdfunding campaigns like ICOs… There are already
several AI-based applications that use blockchain, with many more on the way [49].
In fact, according to a report by IHS Markit, global revenue from blockchain solu-
tions is expected to exceed $7.7 billion by 2022. Despite all the hype around AI, it’s
important to remember that it’s still just a tool. Like any other tool, be it a hammer
or a computer, the value of AI lies in how it can be used to accomplish a specific task
[50]. Companies are using it in many ways today: from IBM Watson, which analyzes
a person’s data to make personalized health suggestions, to Tesla’s self-driving cars,
which crisscross America’s roads. When artificial intelligence meets blockchain, a
new world of possibilities opens for both technologies. We’re not going to talk about
the technical aspects of AI and blockchain, but we want to understand how the two
can be used together [51]. Crypto currencies rely on this technology to function and
have been successful in providing decentralized financial services to individuals.
Artificial intelligence has appeared in the market but is not yet well understood by
the general population. However, it is used in several areas and that includes cryp-
tocurrencies [52]. Despite the great expectations raised by these technologies, their
use carries risks. One of them concerns AI, in fact data collection that could lead
to the manipulation of users’ tastes based on their behavior [53]. Companies could
thus influence people’s choices. If this data were to be stolen, it would be a leak that
could be very damaging to the privacy of users. It should be remembered that the
user’s personal information is valuable to hackers, and they seek it through different
means. On the other hand, blockchain technology presents problems related to its
security, since hackers can take advantage of its vulnerabilities and gain access to
users’ confidential information, such as passwords or exchange addresses. AI could
be used within cryptocurrencies and blockchain; some of them are currently being
explored while others are still mere speculation, [48, 54]. AI and Blockchain can
make cryptocurrency mining more efficient and safer. AI can also be used to predict
market prices using sentiment analysis on social media data [55]. AI can be applied
to blockchain through the development of trading robots. These robots would be
able to analyze large amounts of data and use it to make predictions regarding price
movements in the market. Trading bots would likely be much more accurate than
human predictions, giving them an edge when buying or selling a specific asset [56].
However, it is important to note that these bots will not always be 100% accurate.
Therefore, their risk management systems must be well designed to prevent large
losses from occurring.
98 M. B. Chenguel

Another application of AI is in the development of autonomous trading robots

that act like human traders. These bots would have their own set of metrics that they
would use to determine whether to buy or sell a certain asset, but they would also have
access to social media feeds that would allow them to see what other people are saying
about cryptocurrencies and other assets. This information can easily affect prices in
the short term [57]. The problem with blockchain is that it requires huge amounts
of electricity and computing power to operate. It takes dedicated ASIC miners who
workday and night and who, in return, are rewarded with tokens. This system seems
sound in theory, but when you look closely, you realize that it causes undue harm
to the environment. And that’s why AI can come in handy. The impact of AI on the
blockchain industry will be massive, and as is always the case with new technologies,
there are both concerns and opportunities. The convergence of blockchain and AI can
enable the latter to autonomously create and trade financial products [11, 50, 58]. It
can also make machines more trustworthy, given the immutable nature of blockchain.
AI will allow machines to be fair and ethical, which could lead to them treating
humans better than they already are. Blockchain can have a few applications for
artificial intelligence, including making AI more efficient and transparent. Thanks to
smart contracts, AI applications can be decentralized, operate on a network of nodes,
and increase their reliability [2, 59]. Blockchain can also increase the efficiency of
AI systems by helping them pool resources while maintaining security and privacy.
The convergence of blockchain and AI can improve machine learning by leveraging
distributed computing power and huge datasets. Improved machine learning will
enable artificial intelligence to autonomously create and trade financial products, as
well as provide insights that were previously unobtainable due to data limitations,
improving financial markets in their whole. The data in Blockchain is known as
“smart contracts”, which are essentially self-executing contracts, with the terms of
the agreement between buyer and seller written directly into lines of code [60]. This
allows for a high level of transparency, security, and traceability, features not found
in traditional contracts stored in databases [41]. According to the Harvard Business
Review, 80% of all relevant data will be unstructured (i.e., scanned images, audio, or
video files) by 2020. By its nature, the blockchain is a closed system, which generally
only allows data to enter or leave the network through the network administrator. AI
can read, understand, and correlate data quickly and comprehensively at incredible
speed, bringing a new level of intelligence to blockchain-based enterprise networks.
AI can also make blockchain networks more secure. The blockchain records trans-
actions on a distributed public ledger that is tamper-proof thanks to its encryption,
but that doesn’t make it immune to hackers [10]. As with any other software system,
hackers are constantly trying to break into blockchain applications. AI can help secure
blockchains by automatically detecting and stopping unauthorized access attempts
and other cyber attacks before they cause damage. AI adds intelligence to blockchain
by giving decentralized networks the ability to learn from their own data and make
decisions based on what they have learned, which previous generations of enterprise
software were unable to do. For example, AI can help companies use decentralized
applications (dapps) built on blockchain networks to perform sales transactions or
manage supply chains more efficiently [27]. Using blockchain to store and distribute
The Nexus Between Blockchain, Crypto Currencies and AI: With Case … 99

AI models provides the audit trail companies need to comply with regulations such
as GDPR (General Data Protection Regulation). A large percentage of the world’s
data is not used. One of the main reasons is that they are not organized enough to
be usable. Blockchain platforms like IBM’s are built to organize data, which opens
the door for AI to make sense of it [45]. A blockchain platform can also store and
distribute AI models, which provides an audit trail for training and deploying those
models. The original model as well as all updates can be tracked through blockchain.
The blockchain ensures that every party using an AI model always has access to the
latest version. It also ensures that patterns cannot be easily tampered with or replaced
without being detected. Blockchain platforms can become a trusted source of data
for AI systems by organizing and storing large volumes of data from multiple parties,
with or without permission [2, 59]. Once stored, AI systems can run algorithms on
the secure, decentralized ledger to identify patterns and make predictions. At the
enterprise level, this means that information could be shared more freely between
business partners while maintaining privacy, as they would have a secure, immutable
record of who has had access to what information.

4 Case Study: An Artificial Intelligence to Analyze Crypto

Currencies

AI software dedicated to the management of crypto currencies are like intelligent

financial instruments and are able to analyze each asset in the possession of traders.
Resulting from the work of data scientists and data analysts, this software leads
to objective and relevant results at the end of each analysis carried out on the data
collected.
Like the emerging alternatives in the automotive industry, this software is equipped
with high-performance scanners, capable of detecting more than a hundred, or even
a thousand, winning scenarios. To do this, they use many technical indicators that
can influence variations in market trend lines.
The analysis takes stock of technical supports, pivot points, price history and other
important elements that could work in favor of your investment.
In most cases, AI solutions for analyzing a blockchain asset provide at least these
following elements:
– A detailed summary of the analysis.
– A graph with a “REPLAY” mode to help decision-making.
– Encrypte data.
– Additionna analyses.
100 M. B. Chenguel

Lutessia is an artificial intelligence specialized in technical analysis. This AI

instantly provides traders with technical analysis on the asset and time frame of their
choice. Lutessia can analyze the chart of a stock, a stock index, a Forex currency
pair, a commodity, and even a crypto currency. On each technical analysis, artificial
intelligence provides an analysis summary, an invalidation threshold and price targets,
a chart including plots, chart patterns and various technical indicators, signals and
detections from market scanners, then all the details and summarized data used to
build this technical analysis. Lutessia presents itself as the perfect decision-making
tool on the financial markets. Traders and investors can use artificial intelligence to
save time, to detect trading opportunities or more simply to compare their analyzes
with those of our AI. Lutessia is the first artificial intelligence capable of analyzing
the price charts of all crypto currencies. If you need a technical analysis of Bitcoin
at a given moment or if you are looking for trading opportunities on various altcoins,
this AI meets all your needs.
Created in 2019 by CentralCharts, the Lutessia artificial intelligence immediately
appealed to all investors looking for technical analysis, trading opportunities and
trading signals on crypto currencies.
– Analyzing crypto currencies is a long and tedious job.
– Each crypto currency must be analyzed over several time units before being able
to determine trade opportunities to seize. The time spent analyzing crypto charts
causes all traders to miss a significant number of trading opportunities.
The Nexus Between Blockchain, Crypto Currencies and AI: With Case … 101

– From this observation, the CentralCharts team focused its work on the develop-
ment of an artificial intelligence that would meet the needs of all crypto traders
and investors.

4.1 What is Lutessia Artificial Intelligence?

Lutessia works with Big Data (large panel of data) which represents more than 19
million updated results thanks to more than 135 million calculations running in a
loop.
– All price history.
– 9 calculation periods and 4-time units
– 18 technical indicators
– 6 market scanners (charts, Japanese candlesticks, technical indicators, volumes,
gaps and records)
– More than 150 detections from these 6 market scanners
– More than 120 trend or momentum signals from technical indicators and moving
averages
– The resistances and support, as well as the ProRealTrend of the ProRealTime
platform.
From this BIG DATA, Lutessia manages to generate a technical analysis that
will be easily readable and interpretable by all investors. Within seconds, it performs
analytical work that would have required hours for any professional technical analyst.
102 M. B. Chenguel

But Lutessia’s analysis does not stop at a few plots on a graph. It offers traders
all the elements that allowed it to generate this analysis. On each trade opportu-
nity or analysis, the AI details all the data and signals from the scanners and other
CentralCharts analysis tools.

4.2 Analyzing a Crypto Currency with Lutessia

With a simple click on its avatar, Lutessia subscribers can request the AI to obtain its
analysis on the crypto currency of their choice. After selecting a time unit, subscribers
immediately receive the AI analysis and opinion on their favorite crypto currency.
If this analysis does not reach objective 1 set by the AI, the credit that has been
consumed is Refunded. Each month, Lutessia subscribers benefit from 40 credits to
request the AI at any time on the crypto currency and the time unit of their choice.
Trading method of our artificial intelligence
To analyze the markets, Lutessia uses the power of Central Analyzer, a Big Data tool.
To master and take full advantage of this huge source of data, artificial intelligence
uses the method of “one-way trading” to generate its technical analyses. The “one-
way trading” method is a simple method allowing each trader to set a framework and
rules of conduct for their trading.
This method makes it possible to avoid many so-called “classic” errors, such as the
desire to always be in position, the desire to take all market movements or the desire
to open a trade that does not correspond in any way to the strategy. Normally applied
by the trader. To summarize this trading method, you must first define whether you
are a trend or counter-trend trader, rather a scalper or a swing trader (regardless of
the time unit), and you must respect all the trading rules or the psychological rules
that will have initially been set by your strategy or by yourself. In its original version,
the one-way trading method integrates the analysis of two-time units: a long unit of
time which will allow you to define the “one way to trade” and a short unit of time
which will allow you to define the trading opportunities to be seized according to
your trading strategy.
In summary, we obtain a so-called “trend” chart and a so-called “signals” chart.
On the “trend” chart, one or more levels are determined which will make it possible
to define the “LONG ONLY”, “NEUTRAL” and “SHORT ONLY” zone. Then on
the “signals” chart, all that remains is to wait for trade opportunities to arise in the
direction defined by the “trend” chart.
The Nexus Between Blockchain, Crypto Currencies and AI: With Case … 103

To explain the method of one-way trading, we take simple price levels. But one can
imagine that the “one way to trade” is determined according to a chartist figure or a
technical indicator. Ex: the price is a bullish channel… If the price remains located in
this bullish channel, it is “LONG ONLY”. The price is below its 50-moving average.
If the price remains below this moving average, it is “SHORT ONLY…”
Examples for explanation
A trader determines the trend on the daily chart and his trading signals on the chart.
On the daily chart, the tools used by the trader cause the price to appear bullish above
e100, bearish below e90, and there is total indeterminacy between these two levels.
The trader will therefore set to be “LONG ONLY” above e100, “SHORT ONLY”
below e90, “NEUTRAL” between e90 and e100.
EX 1: the price is at e110, and the trader obtains a BUY signal with his trading
strategy on the 1H chart. Can he open a LONG position? Answer YES.
EX 2: the price is at e80, and the trader obtains a BUY signal with his trading strategy
on the 1H chart. Can he open a LONG position? Answer NO. As the price is in the
“SHORT ONLY” zone of the trend chart, the trader should only allow himself to
trade SHORT positions, and refrain from all LONG positions (even if he obtains an
excellent buy signal on its signal graph).
EX 3: the price is at e95 and the trader obtains a BUY signal with his trading strategy
on the 1H chart. Can he open a LONG position? Answer NO.
The price being in the “NEUTRAL” zone of the trend chart, the trader should not
allow himself any trade with respect to the signals sent by his trading strategy on the
chart.
Receive trade opportunities with Lutessia AI
If Lutessia makes it possible to obtain an analysis at a given moment on your crypto
currency, this is not necessarily the best time to intervene. Indeed, the price can
just as easily be located close to objective 1 as to the invalidation threshold when
generating your technical analysis. Indeed, Lutessia only offers you its analysis at
a given moment. This is why CentralCharts created the “Lutessia Opportunities”
service.
104 M. B. Chenguel

Lutessia artificial intelligence constantly scans all crypto currencies to directly

offer you its best analyzes and new trading opportunities. For each opportunity
selected by the AI, the profit/risk ratio is always greater than 1:1 and can reach
1:8 on the best opportunities offered.
Dashboard Lutessia AI
The Lutessia dashboard will allow you to follow your subscription, your AI analyses,
your credits and the latest opportunities by market: And with the latest “Lutessia
Trends” tool, follow live AI opinion on a complete market or on a list of the crypto
currencies you have in your portfolio: The permanent AI scans are used. Lutessia
does not select trade opportunities but uses all its scans to offer its overall opinion on
a crypto portfolio, on a list of instruments or on the financial market of your choice.

5 Conclusion

AI and blockchain are technologies at the cutting edge of innovation. Both are poised
to revolutionize the way we interact with technology and could have far-reaching
implications for industries as diverse as healthcare, logistics and finance. But, and
perhaps most importantly, they both have the potential to democratize access to data
and information that was previously inaccessible or controlled by centralized institu-
tions. Artificial intelligence (AI) is a term that refers to a wide range of technologies
that can learn from their environment, make predictions, and take action in order
The Nexus Between Blockchain, Crypto Currencies and AI: With Case … 105

to accomplish tasks. AI allows machines to see, hear, speak, and think like us. AI
is already powering many aspects of our daily lives through smart personal assis-
tants like Siri or Alexa and other smart devices like Google Home. Blockchain is
a distributed ledger technology that allows a decentralized network of computers
to maintain an up-to-date record of all transactions made on the blockchain. The
most well-known implementation of blockchain technology is bitcoin (BTC), which
enabled a “trustless” peer-to-peer financial system without any intermediaries. AI
is one of the hottest topics in tech right now, with companies like Google playing
a pivotal role in developing smarter machines that can automate entire industries.
AI isn’t just about cellphones: Blockchain and AI are two of the most talked about
technologies in recent years. The rise of bitcoin and other crypto currencies, as well
as companies like IBM Watson, have sparked a lot of interest in both areas, but what
do they have to do with each other? The convergence of Blockchain and AI may seem
unlikely. After all, AI is about building intelligent machines that can make decisions
by processing data.
What does this have to do with Blockchain Distributed Ledgers? It turns out that
these two seemingly unrelated technologies can help each other in powerful ways.
Artificial intelligence has profound applications in the world of finance. Machine
learning can be used to predict stock market trends, for example, allowing investment
firms to make trades with a high chance of success. However, the finance industry
still needs humans for many tasks, including analyzing those predictions and making
the final deals. Machine learning is a subset of artificial intelligence that focuses on
developing computer programs that can access data and use it to learn on their own.
Machine learning algorithms build a mathematical model from a sample of data, so
that the computer program can use that model to make predictions or make decisions
without being explicitly programmed to do so.
The first use case we will explore is how Blockchain can improve machine learning
algorithms by providing more accurate data. Machine learning algorithms require
large amounts of data for training purposes. However, since many companies strictly
protect their data, it is difficult for researchers to obtain enough data. As time goes on
and more and more computers gain the ability to process data on their own, we could
see fully automated systems from investment firms made up of only AI algorithms.
This would obviously require a new kind of financial system, one that grants AIs full
ownership of their assets and allows them to liquidate them whenever they choose.
When it comes to the intersection of crypto and artificial intelligence, two completely
different aspects come into play.
Big banks have invested a lot of money in AI over the past few years. This is the
case of JP Morgan, which has been interested in AI for several years now. From an
investment perspective, a lot of people are trying to figure out what will happen if the
big banks start using their own in-house technology to start trading crypto currencies
with their clients.
When training an AI system using datasets, you need large amounts of high-quality
data. And this is where blockchain can help you. Using blockchain technology, you
can store and distribute AI models, as well as track and audit them. If you’re working
with datasets that can be stored on the blockchain, then AI agents could use that data
106 M. B. Chenguel

without accessing sensitive information like names or addresses. Our contribution

is to explore the nature of the relationship between AI and crypto currencies, and
we presented a case study on an artificial intelligence that manages crypto currency
wallets. For future implications, we hope that future research work can give empirical
justifications and present estimation models on the nature of the interaction between
Artificial Intelligence and crypto currencies.

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The Advantages and Difficulties of Using
AI and BT in the Auditing Procedures:
A Literature Review

Sajeda Abdel Rahman Hamdan and Abdullah Khaled Al Habashneh

Abstract The objective of this study is to provide a comprehensive analysis of

the advantages and obstacles related to the implementation of Artificial Intelligence
(AI) & blockchain technology (BT) in the field of auditing. the article reviews existing
research on the impact and utilization of Artificial Intelligence & blockchain tech-
nology in Auditing procedures, focusing specifically on the advantages and difficul-
ties they present. The utilization of AI & BT in auditing procedures offers various
advantages, including it strengthens efforts to combat fraud and promotes compli-
ance with international standards, it expedites audit tasks, resulting in time and effort
savings, it enhances audit quality by reducing human error, ensuring the reliability and
relevance of information, it encourages the advancement of traditional auditing prac-
tices while decreasing the reliance on human involvement in auditing and accounting
roles, leading to cost savings and decreased risk of errors. Nevertheless, the utiliza-
tion of AI and BT in auditing also presents difficulties such as high implementa-
tion costs, the need for continuous learning on AI developments by auditors, and
concerns about security vulnerabilities, potential attacks, as well as the presence of
racial biases within blockchain programs used in auditing procedures. This paper
significant to provide a comprehensive evaluation of the problems encircling the
current and future utilization of Artificial Intelligence & blockchain technology in
auditing procedures. By addressing these critical matters and concerns, policymakers
and stakeholders can develop a deeper understanding of the impact of AI and BT
on economic and social growth. Consequently, this understanding can inform future
policies that enhance business practices, reduce fraud incidents, expedite audit tasks,
improve audit quality, and minimize human error, thereby contributing to economic
and social development. While there is extensive literature available on the utilization
of AI & BT in auditing procedures, there remains a lack of comprehensive under-
standing regarding the advantages and difficulties associated with these processes.
This study bridges that gap by providing policymakers with valuable insights into
the utilization of Artificial Intelligence & blockchain technology in auditing.

S. A. R. Hamdan (B) · A. K. Al Habashneh

Department of Accounting, Faculty of Business, The Hashemite University, Zarqa, Jordan
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 111
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_9
112 S. A. R. Hamdan and A. K. Al Habashneh

Keywords Auditing procedures · Advantages & difficulties · Artificial

intelligence · Blockchain technology

1 Introduction

The era of technological transformation has ushered in significant advancements

in various aspects of life, with AI & BT emerging as two transformative technolo-
gies. These technologies have revolutionized the industrial landscape by replacing
human intelligence through digitalization [31, 32]. Rapid technological progress is
profoundly reshaping the world, presenting both complexity and opportunities for
business growth. In this context, organizations are faced with challenges and benefits
in utilizing technological decision tools [16, 17]. As a result, companies are gener-
ating vast amounts of data, necessitating a proactive approach to adapt to evolving
tools based on advanced technology. This enables businesses to analyze the gener-
ated data for both the analysis of challenges and the identification of opportunities
[13–16].
Previous literature has extensively examined the impact of Artificial Intelligence
(AI) and Blockchain Technology (BT) on the audit procedures [4–7, 10–12, 19,
28, 34–37, 41–44, 46]. However, these studies do not consolidate the advantages
and difficulties of Artificial Intelligence & blockchain technology utilization in the
auditing procedures within a single paper. Therefore, the objective of this study is to
contribute to the existing knowledge by providing a comprehensive understanding of
the benefits and obstacles associated with the utilization of Artificial Intelligence &
blockchain technology in the auditing procedures. This will be achieved through a
systematic review of relevant literature. Although previous reviews have explored
the utilization of Artificial Intelligence & blockchain technology in the auditing
procedures in the accounting literature [1, 2, 22–29, 40–43], there is still a need to
consolidate and present the findings in a comprehensive manner.
The utilization of Artificial Intelligence (AI) & Blockchain Technology (BT) in the
auditing procedures has witnessed significant growth in recent years. Researchers
have explored the impact of these technologies on auditing, acknowledging both
positive and negative outcomes [4–6, 10, 17–19, 37–39, 49].
This surge in literature on Artificial Intelligence & blockchain technology utiliza-
tion in the auditing procedures can be attributed to the significant benefits these
technologies offer to Organizations and their stakeholders, along with the increasing
apprehensions regarding corporate fraud [8–10, 33, 46–50].
The topic of utilization Artificial Intelligence & blockchain technology in the
auditing procedures has been investigated using various research methodologies,
including archival data analysis, survey investigations, and experimental studies [18,
28, 33, 41]. This diverse body of research not only encompasses a wide range of
perspectives but also addresses numerous research problems and issues related to
the utilization of Artificial Intelligence & blockchain technology in the auditing
procedures.
The Advantages and Difficulties of Using AI and BT in the Auditing … 113

Regardless of the significance & breadth of the utilization Artificial Intelligence &
blockchain technology in auditing procedures domain, there remains a need for a
exhaustive literature review on the advantages & difficulties associated with their
utilization. Such a review would provide a consolidated understanding of the existing
knowledge and shed light on the potential advantages and obstacles faced when
implementing Artificial Intelligence & blockchain technology in the auditing proce-
dures. By filling this gap in the literature, researchers can contribute to the advance-
ment of this field and provide valuable insights for practitioners and policymakers
alike.
The primary purpose of this study is to consolidate and synthesize the substantial
body of practical research conducted in the context of utilization Artificial Intel-
ligence & blockchain technology in the auditing procedures. By undertaking this
synthesis, the study purpose to provide a comprehensive overview of the current state
of knowledge in this field. Additionally, the paper seeks to identify any existing gaps
or areas that require further exploration in the utilization of Artificial Intelligence &
blockchain technology in the auditing procedures.
Through this analysis, the study purpose to highlight potential fruitful areas
for future research. By identifying these gaps, researchers can direct their efforts
towards addressing specific aspects that have not been extensively studied or require
further investigation. This approach will contribute to advancing the understanding
and application of Artificial Intelligence & blockchain technology in the auditing
procedures and will guide future research endeavors in this domain.
This paper makes several key contributions to the utilization of Artificial Intelli-
gence & blockchain technology in the auditing procedures literature. Firstly, it exam-
ines the significance of utilization Artificial Intelligence & blockchain technology
in the auditing procedures, accentuating the possibility advantages & difficulties
associated with their implementation.
The paper specifically emphasizes the benefits of AI utilization in the accounting
and auditing professions, showcasing how AI can enhance and improve various
aspects of these fields. It also discusses the advantages of BT utilization in the
audit procedures, illustrating how blockchain technology can contribute to increased
efficiency and improved audit quality.
Furthermore, the paper addresses the challenges related to the utilization of AI in
the audit procedures, recognizing potential hurdles that organizations may face when
implementing AI technologies. It also discusses the challenges associated with the
utilization of BT in auditing, highlighting considerations and potential obstacles.
In addition to these contributions, the paper provides a research agenda that
outlines future directions for investigation in the field of AI and BT utilization
in auditing. This research agenda serves as a roadmap for further exploration and
development of the accounting process, fostering advancements in auditing practices.
Overall, this paper significantly contributes to the understanding of the advantages
and difficulties associated with the utilization of Artificial Intelligence & blockchain
technology in the auditing procedures. It highlights the potential impact on fraud
reduction, the reduction of human involvement in auditing and accounting, increased
efficiency and speed in audit tasks, as well as the enhancement of overall audit
114 S. A. R. Hamdan and A. K. Al Habashneh

quality. By providing these insights, the paper adds valuable knowledge that directly
impacts the development of enterprises and their shareholders through the utilization
of various tools and techniques.

2 Background

2.1 Background of Auditing Procedures

The audit Procedures plays a crucial role in comprehending the significance and
relevance of adopting Artificial Intelligence (AI) and Blockchain Technology (BT)
in the audit field. Auditing involves a series of actions undertaken by auditors to gather
evidence and make informed judgments and opinions about the financial statements.
Due to the varying internal control systems and risk factors present in each client,
no two audit procedures are identical. However, AI and BT offer adaptable solutions
to enhance efficiency at every step of the audit procedures, creating a seamless
continuum where the output of one step becomes the input for the next [22–28].
According to a report by rendering spot to [44–47], the audit procedures can
be categorized into four stages: Planning, Fieldwork, Audit Report, and Follow-up
Review.
During the Planning stage, the auditor informs the client about the audit and
conducts a formal meeting with the management of the firm to discuss the audit
objectives. This phase also involves gathering information on critical processes and
developing a plan for the remaining audit steps.
The Fieldwork stage is where the auditor assesses the effectiveness of the controls
identified during the preliminary review. The auditor verifies if the controls are
operating as Explained by the client.
The data collection stage concludes accompanied by the compilation of principal
results,
Which will be used to prepare the ultimate edition of the audit report [50–53].
The auditor compiles an initial report during the audit report stage, which is
initially shared with the operating management of the unit. The report then undergoes
a review process by the client before the exit conference takes place [54–56].
The Follow-up Review stage involves reviewing the client’s response documents
and verifying if the necessary actions have been taken to resolve the audit findings.
Testing may be conducted to ensure the desired results have been achieved. Any
unresolved findings are addressed in the follow-up report.
Kanakriyah [26] emphasize that the audit procedures can focus on various aspects,
including a firm’s systems, applications, information processing facilities, system
development activities, enterprise IS architecture, and communication networks.
According to [27, 57], the audit procedures can be summarized into four
main steps: pre-planning, planning, understanding the entity and risk assessment,
documentation, and completion and reporting.
The Advantages and Difficulties of Using AI and BT in the Auditing … 115

Fig. 1 Audit procedures model, Source [5]

The first step in the audit procedures is pre-planning, which involves assessing
whether it is appropriate to accept new clients or continue working with existing ones.
Auditors evaluate the internal processes and procedures of the company to make an
informed decision. This step assists auditors in evaluating whether to accept or reject
a client, the subsequent phase is planning, where auditors develop a comprehensive
plan for the entire audit procedures. While unexpected events may occur that require
adjustments to the audit strategy, the planning process results in an audit scheme that
designates the period, scope, trait, and overall audit roadmap, the succeeding phase
involves understanding the entity and risk assessment. During this phase, auditors
gain a thorough understanding of the client’s control environment and assess the risk
of material errors. This understanding provides auditors with insights into the client’s
operations and the industry in which it operates, the last phase in the audit proce-
dures is completion and reporting. In this stage, auditors evaluate the relevance &
appropriateness of the evidence collected during the audit. The completion procedure
necessitates auditors to verify that the entire process has been meticulously recorded
and that the substantiating materials are appropriately arranged. Finally, auditors
prepare and present the audit report based on their findings (Fig. 1).

2.2 Background of AI

Over half a century ago, the term “Artificial Intelligence” was coined during the Dart-
mouth Conference in 1955, marking a significant milestone in the field of machine
intelligence [21, 48, 58]. John McCarthy, a renowned computer scientist, provided an
initial definition of artificial intelligence as “the science and engineering of creating
intelligent machines” [21].
Hernandez-Orallo [24] further elaborate on the concept, describing artificial intel-
ligence as the ability of a system to accurately interpret external data, learn from it,
and utilize those insights to accomplish specific objectives and tasks by means of
adaptable adaptation.
Initially, technological advancements aimed to revolutionize specific industries;
however, as time progressed, technology has become an indispensable component
across all sectors. It continues to play a crucial and ever-evolving role in our percep-
tion and interaction with the world. A notable illustration of this can be found in
116 S. A. R. Hamdan and A. K. Al Habashneh

the World Economic Forum Shift report (2015), which highlighted that 75% of the
respondents, including 816 chief executive officers & experts from the information
and communications technology sector, believed that a critical turning point would
occur when 30% of companies conducted audits using AI by 2025. This statistic
underscores the growing significance of artificial intelligence in shaping various
aspects of business operations.
The utilization of AI technology in the field of auditing is not a novel concept,
being an essential tool that has assisted computer audit specialists in making sound
decisions for an extended period of time [20, 59]. However, as technology continues
to advance, with the growing accessibility of vast amounts of data and improved
control over processing, it is expected that artificial intelligence will have a significant
influence on the field of auditing in the coming years [28, 60].
The exponential growth of data necessitates auditors to augment their processing
capabilities while upholding the efficiency and accuracy of the audit procedures.
One approach to achieve this objective is the integration of Artificial Intelligence
-based technology in auditing, which entails automating tasks and replacing manual
input with AI systems that transform inputs into outputs. In fact, it is challenging
to envision any facet of auditing that would not benefit from Artificial Intelligence
assurance or the assistance provided by Artificial Intelligence technologies [28, 61].

2.3 Background of BT

BT revolutionizes the transfer of valuable digital assets, such as currency, by elim-

inating the need for a third-party intermediary. It functions as a chain of blocks,
facilitating the establishment and recording of asset ownership between parties [3,
32]. In numerous areas of financial relationships and accounting, BT presents an
innovative solution to overcome the limitations of centralization, which often leads
to delays and substantial fees in operations.
BT offers a novel approach to record, process, and store financial transactions
[45]. While still in its early stages of development, BT technology has garnered
significant attention from prominent entities such as the Big Four accounting firms
and various financial institutions due to its immense potential in operational and
service processes, particularly in the field of auditing [11, 30] (Fig. 2).

3 Research Design

The research design of this study can be best characterized as a review article,
following the framework outlined by [36]. The primary objective of this study is
to provide comprehensibility of the advantages & difficulties associated with the
utilization of AI & BT in the auditing procedures, drawing on a comprehensive
The Advantages and Difficulties of Using AI and BT in the Auditing … 117

Fig. 2 History of block chain, Source [18]

review of existing literature in this field. To align with the research aim and objec-
tives, a two-stage approach was undertaken to identify relevant articles on the impact
of AI & BT on the auditing procedures.
In the first stage, a search was conducted using specific keyword strings, including
combinations such as “Artificial Intelligence” and “Auditing Process,” “Artificial
Intelligence and Blockchain in Auditing,” “AI and BT utilization in Auditing
Process,” “Benefits and challenges of adopting AI and BT in Auditing Process,”
“Fraud reduction and efficiency enhancement in auditing through AI integration,” and
“Cost implications and security vulnerabilities in adopting blockchain technology in
auditing.”
To retrieve relevant studies, the following databases were reviewed: Elsevier,
EBSCOhost, Wiley Online Library, Scopus, Taylor and Francis Online, and Springer
Link. Additionally, special issues of journals like the International Journal of
Accounting Information Systems and Blockchain: Research and Applications were
examined. Moreover, journals that occasionally publish research on the impact of
AI & BT in the auditing procedures were also considered.
The second stage of the study involved a snowballing search technique, wherein
the reference lists of all the articles identified in the first stage were thoroughly
examined. The search was focused solely on articles published in English, as there
were limited studies conducted on this topic in Jordan, particularly investigating the
effects of AI and blockchain technologies on the audit procedures in one article.
The majority of the pertinent articles were published in the past few decades. The
identified articles were critically analyzed, and those discussing the utilization of AI
and blockchain in the auditing process were selected for inclusion in the review.

4 Findings

4.1 Advantages of Incorporating Artificial Intelligence

in Auditing

• Enhancing compliance with international standards while simultaneously miti-

gating fraud.
118 S. A. R. Hamdan and A. K. Al Habashneh

• Accelerating audit procedures to streamline efficiency, while concurrently

elevating audit quality, minimizing human error, and ensuring the integrity, reli-
ability, and relevance of information. Furthermore, promoting the evolution and
enhancement of traditional auditing.

Several research papers have consistently shown that the utilization of AI in place
of manual entries yields notable benefits in terms of reducing human error, expediting
audit tasks, and upholding data reliability [12, 34, 47]. AI systems, when employed
for entries, not only enhance efficiency but also possess the ability to identify fraud-
ulent activities within financial statements and provide regular contract reviews with
recommendations. Additionally, these AI systems have the capability to collect and
analyze information, thereby facilitating auditors in pinpointing critical areas that
necessitate further attention. Consequently, the audit profession is actively adapting
to this transformation brought about by Artificial Intelligence, in order to remain
aligned with these advancements.
Al-Okaily et al. [5] argue that with the exponential increase in information and data
today, Auditors encounter the challenge of augmenting their processing capability
while upholding the efficacy and dependability of the audit procedures. To address
this issue, the investigation carried out a semi-structured interview involving nine
expert auditors hailing from the prominent big four auditing firms in Sweden, aiming
to explore the utilization of AI tools in their auditing processes. The findings provide
compelling evidence that the use of Artificial Intelligence has a significant favorable
effect on audit quality.
The study reveals that the incorporation of Artificial Intelligence systems maxi-
mize the efficiency of every stage in the audit procedures, leading to improved profes-
sionalism and compliance with international standards, particularly the International
Financial Reporting Standards (IFRS). Furthermore, the research emphasizes the
advantages of using advanced technological audit systems instead of traditional tools.
Notably, the main advantage of Artificial Intelligence in the audit procedures is its
ability to minimize mistakes that previously necessitated repetitive work for audi-
tors. The interviewees unanimously agree that the integration of AI reduces the
burden of labor-intensive tasks, thereby mitigating the risks associated with errors,
manipulation, and omissions.
Al-Sayyed et al. [4] emphasize the role of AI techniques in data collection for the
audit procedures, enabling a deeper comprehension of its various stages. The rapid
growth of data in the information age has necessitated the integration of AI technology
in the audit sector, enabling efficient and timely data analysis with minimal effort.
This integration ultimately enhances the quality of audits, enabling auditors to cope
with the challenges imposed by the evolving landscape.
Gepp et al. [19] conducted a study to investigate the significance of AI in the
auditing and accounting domains. The findings suggest that AI paves the way for a
more favorable and conducive environment in these fields. The paper concludes that
AI has the potential to improve various aspects of accounting and auditing, shaping
a more efficient and effective landscape.
The Advantages and Difficulties of Using AI and BT in the Auditing … 119

Petticrew and Roberts [46] conducted a thorough investigation into the utilization
of artificial intelligence (AI) as a means to prevent accounting and auditing fraud, as
well as to enhance the overall quality of accounting information. Their study identifies
several critical areas where AI should focus its efforts to become a competent and
well-rounded tool in the field of accounting.
A thorough analysis of strategies conducted by [28] highlighted the growing
impact of artificial intelligence (AI) on the auditing and accounting field. They
emphasized the significance of current knowledge technologies and discussed their
implications for human auditors and the overall audit procedures. According to the
authors, contemporary AI tools have advanced scanning capabilities, enabling them
to effectively identify pertinent accounting information from diverse sources such as
bills, contracts, and transactions [28].
Alles and Gray [10] conducted a study to explore the role of artificial intelli-
gence (AI) in audit procedures within prominent international accounting firms. The
research focused on examining the influence of AI on audits and its implications for
auditing professionals. Notably, the study highlighted that AI tools have the capa-
bility to detect anomalies in company records, particularly concerning unusually high
sales figures or transactions occurring shortly before the end of a reporting period,
additionally, noteworthy payments are made promptly following the conclusion of
the reporting period [10].
According to [17], advancements in AI have the potential to significantly benefit
human endeavors. This study aims to examine the effect of AI on the accounting
and auditing profession, focusing on the effects it has on various tasks within the
field. Specifically, the research suggests that automated technologies are more likely
to replace prospective tasks such as bookkeeping or process-driven assignments, as
compared to higher-value specialties that require professional judgment. Addition-
ally, the study confirms the widespread belief that the younger generation of accoun-
tants should possess the knowledge, understanding, and preparedness to collaborate
effectively with AI systems.
In the study conducted by [33], it was highlighted that despite the efforts made
by professional auditing bodies to promote the utilization of contemporary auditing
techniques, particularly computer-assisted auditing (CAATs), among audit firms in
Jordan, the utilization of computers in auditing techniques remained relatively low.
To address this, Mansour employed a qualified questionnaire that was distributed to
200 external auditors, aiming to gather data on their acceptance and use of CAATs.
The findings of the study indicated that auditors currently rely on CAATs, as these
tools enable them to perform data analysis without the need for large sample volumes.
However, it was also noted that the organization and processing of data still require
significant human efforts.
Several recent studies [3, 23] have examined the impact of AIS & BI on the perfor-
mance of Jordanian banks and insurance companies. These studies have consistently
demonstrated the positive effects of AIS and BI in terms of increased profitability,
risk reduction, informed decision-making, improved operational efficiency, and the
timely preparation of relevant financial statements.
120 S. A. R. Hamdan and A. K. Al Habashneh

Two studies explored the role of AIS in internal and external control. Study [9]
focused on AIS’s influence on internal control efficiency in Jordanian commercial
banks. Findings showed a positive impact between AIS attributes (relevance, reli-
ability, timeliness, understandability, completeness, and verifiability) and internal
control. Recommendations were made to prioritize AIS implementation for improved
performance in Jordanian banks.
In terms of external control, Alaba and Ghanoum [8] examined the influence of
AIS on audit procedure effectiveness. The research concentrated on external auditors’
viewpoints, emphasizing their perception of AIS as a crucial factor in enhancing
the quality of external audits. The findings indicated that AIS plays a significant
role in improving audit quality, specifically in areas such as audit planning, testing
procedures, risk assessment, and implementation. Furthermore, the study identified
the existence of high-quality computer applications within Jordanian audit firms,
emphasizing their capability to leverage AIS effectively.
According to [43], the increasing automation in audits will lead to a shift in
emphasis from traditional auditing procedures such as ticking and tying and vouching
to a greater focus on comprehension the overall picture presented by the data. There
will be a stronger emphasis on comprehending inputs and assumptions, as well as
identifying and evaluating trends, patterns, and outliers. Audit firms recognize the
importance of leveraging advanced technology to achieve an efficient and effective
audit procedures. For instance, EY has made a significant investment of $400 million
in applying big data analytics to its audit practices [7].
A similar perspective was found in a study conducted by [25] in Malaysia, rather
than Sweden. The study involved auditors from various firms, including PWC,
Deloitte, KPMG, AT THEY, BDO, and other auditing companies. Their findings
align with the aforementioned insights, indicating that artificial intelligence (AI)
has a positive impact on the effectiveness of all stages of the audit procedures in
Malaysia. The integration of AI significantly enhances the performance of the audit
procedures.

4.2 Advantages of Utilization BT for Auditing

• The utilization of Blockchain Technology (BT) in auditing and accounting reduces

human involvement, leading to cost savings and the elimination of time delays.
This, in turn, minimizes the potential for human error in these tasks.
• Blockchain utilization in auditing and accounting enhances efficiency in various
aspects, such as data recording, settlement, and reviewing processes.
According to research papers [1, 29], Blockchain Technology (BT) has the poten-
tial to substantially decrease the human involvement in the accounting profession and
could potentially eliminate it entirely in the Coming time. These studies also suggest
that Blockchain Technology can eliminate time delays by enhancing the accuracy and
relevance of financial statements. This is particularly beneficial in reducing delays
The Advantages and Difficulties of Using AI and BT in the Auditing … 121

caused by auditors when dealing with the increasing number and size of financial
statements.
According to a study conducted by Issa et al. [41] at RMIT University in Australia,
shed light on the importance of BT in the accounting and audit domain.
The study identified several crucial topics currently discussed in the blockchain
ecosystem, including corporate governance, transparency, trust, blockchain-enabled
continuous auditing, innovative contract applications, and the changing roles of
accountants and auditors. The researchers aimed to provide practical implications
for accountants and auditors regarding blockchain development.
The research highlighted that one of the key advantages of Blockchain Tech-
nology, as emphasized by accountants and auditors, is the increased efficiency it
brings to accounting data recording, settlement, and review processes. By leveraging
blockchain, accountants and auditors can save both time and costs associated with
these tasks, thereby minimizing the potential for human mistakes. Conversely, the
research also acknowledged a limitation of BT in its ability to detect fraudulent
transactions.
In another study conducted by Kokina et al. [32], the role of auditing and
accounting performance was examined in the context of blockchain technology. The
research revealed that BT offers novel methods for recording, processing, and storing
transactions and financial information. It has the potential to significantly transform
the accounting profession and reshape the business ecosystem. The findings of the
study indicated that auditors face both opportunities and challenges as a result of the
impact of blockchain on auditing.
The four major accounting firms have made significant investments in leveraging
big data to enhance customer service quality. Deloitte took the initial step in the
BT (Blockchain Technology) initiative in 2016, highlighting how it reduces auditing
time and enables the creation of smart contract applications for automated invoice
payments. Building on this, Ernst & Young (EY) became the first consulting firm to
accept Bitcoin services in 2017, expanding its offerings to facilitate commercial use
of BT technology. In the same year, KPMG collaborated with Microsoft to foster joint
efforts that integrate Blockchain Technology into the fabric of their operations. On the
other hand, PwC introduced digital asset services leveraging Blockchain Technology
in 2017 and has set a goal to integrate Blockchain Technology into direct production
systems by 2025.These developments have been discussed by various sources.

4.3 Difficulties of Incorporating Artificial Intelligence

in Auditing

• The significant cost involved in ensuring auditors’ adherence to AI systems and

keeping them up-to-date with the latest advancements in AI utilization for auditing
purposes.
122 S. A. R. Hamdan and A. K. Al Habashneh

According to [38], the application of artificial intelligence (AI) in the auditing

process presents significant challenges, primarily due to the high implementation
costs and the need to train internal auditors in AI. Additionally, there is a requirement
for continuous updating of AI systems to keep up with the latest developments,
which incurs additional expenses for companies. This situation poses a considerable
challenge for organizations with limited financial resources. Likewise, [6] asserts
that auditors must possess a fundamental understanding of AI, enabling them to
identify both the risks and opportunities associated with its implementation. They
should be prepared to redefine their roles and adapt to the automation of various
auditing procedures. This adjustment necessitates a comprehensive training program
for auditors, which adds to the financial burden faced by organizations.

4.4 Difficulties of Adopting Blockchain Technology

for Auditing

• The integration of blockchain technology in auditing programs poses the problem

of encountering security vulnerabilities, susceptibility to attacks, and the presence
of racial biases.

According to [49], the utilization of blockchain technology in internal audits is

hindered by data security challenges, current issues, and legal barriers. One of the
main challenges faced by audit firms in adopting blockchain is the absence of a
centralized authority to report cyberattacks. Additionally, reaching consensus rules
among all participants proves to be difficult when acting as an organizational agent.
An example highlighting the significance of a secure environment for blockchain
utilization is the Ethereum theft incident that occurred on June 17, 2016. During
this incident, an unidentified hacker successfully stole approximately $50 million
worth of Ethereum. The breach was attributed to a vulnerability within the software
used to manage Ethereum wallets. This event underscores the crucial role that a
secure security environment plays in the successful implementation of blockchain
technology [37].

5 Conclusion

According to Table 1, a qualitative review of the literature revealed numerous themes

encompassing both the Advantages and Difficulties associated with the utilization of
Artificial Intelligence (AI) and Blockchain Technology (BT) in the auditing proce-
dures. Drawing from previous literature reviews and the analysis conducted in this
paper, it is evident that AI and BT utilization in auditing holds significant potential
across various applications. This field not only extends its reach to accounting and
The Advantages and Difficulties of Using AI and BT in the Auditing … 123

Table 1 Research synopsis

Advantages utilization of AI & BT in audit Difficulties utilization of AI & BT in Audit
procedures procedures
1. Enhancing fraud prevention while 1. The significant expense associated with
simultaneously improving adherence to implementing artificial intelligence in the
global compliance standards auditing procedures, alongside the challenge
2. Accelerating audit procedures to optimize of ensuring auditors stay abreast of the latest
time and resource utilization, while advancements in AI utilization for audits
elevating audit quality, mitigating human 2. The integration of blockchain technology in
error, ensuring information reliability and auditing introduces potential security
relevance, and fostering advancements in vulnerabilities, risks, and susceptibility to
traditional auditing practices attacks. Additionally, there is a concern
3. Minimizing human involvement in the regarding the presence of racial biases
auditing and accounting profession through within the utilization of blockchain
the integration of technology enables programs for auditing purposes
accountants and auditors to achieve cost
savings, eliminate time delays, and
significantly mitigate the risk of human
error
4. Enhancing the efficiency of auditing and
accounting processes in data recording,
settlement, and review activities

auditing but also requires a multidisciplinary approach, integrating financial, tech-

nological, adjudicative, and investigative knowledge. Consequently, the integration
of AI and BT in auditing procedures augments the value of the services auditors can
offer to enterprises, ultimately enhancing their overall impact and contribution to the
field.
The utilization of AI and BT in the auditing procedures opens up numerous oppor-
tunities for stakeholders. Clients and experts can leverage these advancements to
provide specialized services that combat fraud and enhance the credibility of the
auditing profession. Meanwhile, students and educationalists have the chance to
expand their knowledge and understanding of auditing and accounting by incorpo-
rating AI and BT concepts into their learning. By embracing these opportunities,
stakeholders can thrive in an evolving industry and contribute to the advancement of
auditing practices.
future research in utilization AI and BT in the auditing procedures should focus
on maintaining a high standard of auditors by implementing stringent entry controls,
improving the quality of educational programs to align with practical requirements,
and increasing public recognition through workshops that enhance awareness of
fraud and highlight the role of AI and BT in auditing in mitigating fraud risks.
124 S. A. R. Hamdan and A. K. Al Habashneh

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Big Data Analytics and Its Impact
on Corporate Sustainability Disclosure
in the Digital Era

Nahla Ibrahim and Abeer M. M. Abdelhalim

Abstract The study aimed to investigate the impact of big data analysis on the corpo-
rates’ sustainability disclosure. It is applied to a selected sample of listed compa-
nies in the Saudi stock market; a quantitative approach was used through a survey
distributed to a number of (500) accountants and financial managers in the selected
companies and the number of valid returned responses was (350). Findings revealed
that big data analytics significantly influenced and improved corporate sustainability
disclosure, except for the fourth hypothesis, which examines the effect of the barriers
to using big data properly on corporate sustainability disclosure development. The
current study contributes to literature dedicated to examining big data analytics and
its impact on corporate sustainability disclosure and can be applied as a reference in
emerging economics.

Keywords Big data analytics · Corporate sustainability disclosure · Digital era

1 Introduction

The accelerated technological development and its various applications change many
business models, as they can provide new digital solutions that enabled companies to
maintain and develop customer relationships more efficiently, which is considered a
competitive advantage that can generate added value, information technology plays

N. Ibrahim
Department of Accounting, College of Business Administration, King Faisal University,
AL-Hassa 31982, Hofuf, Saudi Arabia
e-mail: [email protected]
A. M. M. Abdelhalim (B)
Department of Accounting, King Faisal University, Applied College, Al-Hassa, Hofuf 31982,
Saudi Arabia
e-mail: [email protected]
Department of Business Information Systems, Faculty of Management Technologies and
Information Systems, Port Said University, Port Fuad, Egypt

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 127
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_10
128 N. Ibrahim and A. M. M. Abdelhalim

a crucial role in the era of industry 4.0 on the business performance [1], digital
transformation refers to the development and the use of new technologies in the
fourth industrial revolution such as big data analytics to achieve breakthroughs in
business models and performance [2].
Industry 4.0 applications produce unlimited volume and timely data, scientific
evidence does not provide a way of controlling or slowing down this abundant produc-
tion of data, on the contrary, it is evidenced that the data will increase by leaps and
bounds over time [3], and this forced information practitioners to constantly search
for new solutions for storing, processing and analyzing the data and take full advan-
tage of the desired value, and even the potential value that is not taken into account
from this data [4].
The issue of sustainability in companies has attracted the attention of many
researchers, for all its three pillars (environmental, social, or economic), especially
from the accounting point of view, and sustainable accounting has an important
role in achieving the integration of sustainable business systems, to prepare sustain-
ability reports that show the environmental, social and economic performance of
the company [5], and from the traditional accounting had to take into account the
effects of sustainability at the company level, by extracting, analyzing and using
environmental and social information of monetary value to improve the environ-
mental, social and economic performance of the company, based on which decisions
are taken [6]. The accounting profession is limited to the scope of shareholders’
interests and preserving them only, but rather goes beyond the matter to extend to
identifying and measuring the environmental and social impact of activity and taking
it into account [7], and thus accounting added to its goals a new dimension that is
the social and environmental dimension along with its economic dimension [8].
Recently, corporate sustainability reports have become more demanding, and
companies seek to respond to stakeholder expectations concerning financial and
non-financial metrics. The global interest in these reports and their disclosure has
created opportunities and challenges for accountants, by expanding their responsibil-
ities towards governance, risk management, strategic management, and sustainable
development, and this requires developing the skills of accountants to prepare and
disclose sustainability reports.
The increase in the volume and diversity of data in the current business envi-
ronment has led to many companies benefiting from this data and analyzing it. For
example, the majority of companies do not benefit from the data of their customers’
transactions, but if customer data is analyzed and processed, these customers can be
evaluated and relationships with customers can be developed to achieve a competi-
tive advantage [9], identifying the most important data for the business and directing
future decisions, understanding customers’ needs and preferences, increasing sales,
enhancing efficiency, improving operations and customer services, in addition to
improving risk management and improving profitability [10].
Where companies that adopt big data applications face a major challenge of how to
control it, as storing, managing, and optimally utilizing this data is a real problem [11],
and big data, in contrast, also provides a competitive advantage if it is efficiently used
and analyzed, as it provides a deeper understanding of the variables in the corporate
Big Data Analytics and Its Impact on Corporate Sustainability … 129

context, and this helps officials to make correct and accurate decisions which means
a greater opportunity to achieve competitive success in the overall performance [12].
The most important recent changes and developments in the local and international
arena are increasing interest in the issue of achieving sustainability as one of the main
pillars for achieving development [13]. In this context, awareness and investment
thinking among individuals and institutions have changed, and the dimension of
sustainability has become one of the main determinants of investment decisions
[14]. As investors are no longer interested in evaluating the financial performance
of the company only, but rather in achieving a high level of financial performance
while maintaining good levels of environmental, social, economic, and governance
performance [15].
From the foregoing, it is clear that the level of disclosure of sustainability reports
in Saudi companies has not yet reached what it has reached in developed countries,
and the failure of companies to disclose these reports has led to giving the impression
that companies do not play their role in social responsibility, so there is increasing
pressure on these companies. The need to expand disclosure and provide information
on environmental, economic, social, and governance performance and not be limited
to the disclosure of financial performance required by the mandatory disclosure
framework, with reports on its impact on society and how to manage this impact.
Hence, attempts to use big data analytics beneficially have become a common
concern of corporates, however, they face the challenge of the unprecedented level
of semi-structured and unstructured big data [16, 50–53], which they have to use
and manage to be innovative, effective, and competitive. Accordingly, the current
study raises the following question: What is the impact of big data analysis on
corporate sustainability disclosure in the digital era?

2 Literature Review and Hypotheses Development

2.1 Big Data

Big data is one of the newest digital applications that become a trend regarding
the massive flow of data [17], and the importance of big data lies in discovering
opportunities to reduce costs, improve risk management, and enhance business effi-
ciency. It is considered a store of value when it is transformed into information to
develop the economy [18, 57], saving a lot of time and money in the case of compa-
nies applying data management practices that take into account the requirements of
downloading huge data, improving the quality of accounting information, providing
a highly competitive advantage for organizations, supporting integrated reports more
effectively, rationalizing decisions, and helping companies to reach To results to find
realistic solutions to develop them [19, 20, 58].
Big data is considered a technological application capable of revolutionizing the
way companies operate [21], therefore this will certainly affect accounting science as
130 N. Ibrahim and A. M. M. Abdelhalim

it is a social science that is highly vulnerable to any changes in the surrounding envi-
ronment [22], and therefore the accountant must anticipate these changes that result
from technological development, which necessitates new standards and methods for
data collection and analysis [23, 35].
There is extensive interest in the literature on big data and its impact on accounting
practices, however, we argue that the goal of accounting remains the same as
providing information to decision-makers, and accountants have used tools to record
this data, whatever its source [24, 41], although the use of big data poses new chal-
lenges. For the profession, accountants are used to making changes related to the
types of information provided [25, 26], where the importance of this data lies not
in its size as much as in what we can do with it, and big data can be used in the
following areas: Financial and accounting services, tax services, banking services,
industry [24–28, 59].
On a business scale, there are many challenges faced by organizations regarding
the ever-increasing volume of big data, the massive and rapid growth in the amount of
data, random search and retrieval within the big data, data diversity, and availability
of practitioners and analysts specialized in big data analytics to extract information
that suits the organization’s needs and have good capabilities and flexibility in use
and development [29, 30].

2.2 Corporate Sustainability Disclosure

The importance of disclosure on sustainable development lies in the increasing

demand of companies to be more disclosed not only their financial performance
through their financial reports, but also their performance in the main social, ethical,
and environmental issues [31], as stakeholders often seek information other than
that required by the mandatory disclosure framework, to include information on the
company’s environmental and social performance [32, 43, 54–56].
The methods of disclosure about corporate sustainability, and therefore about the
sustainable development of companies, are represented in one of the following two
methods: The first method (merger method): by merging traditional economic infor-
mation with social and environmental information in the main financial statements,
and the disclosure method takes one of the following two forms (the list of economic
and social operations The social and economic income statement, the second method
(separation method): where the social and environmental performance is disclosed
in separate reports on the financial statements and their appendices, and these reports
take the following forms: Descriptive reports The costs and benefits of social respon-
sibility are disclosed in a descriptive manner without analyzing these costs or Bene-
fits, reports that disclose the costs of social responsibility without disclosing the
benefits of social responsibility, reports that disclose the costs and benefits of social
responsibility in a quantitative manner, and this is the best type of disclosure in
separate reports on the financial statements [33, 52, 66].
Big Data Analytics and Its Impact on Corporate Sustainability … 131

The importance of accounting disclosure about the sustainability of companies

stems from the fact that it stems from the principle that people are the center of
its attention, as it responds to the needs of the current generation without compro-
mising the needs of future generations. A more balanced and just future, which helps
in analyzing the economic, political, social, and administrative conditions with a
comprehensive vision, that encourages the unification of efforts between the govern-
ment and private sectors around goals and programs that contribute to meeting the
needs of all groups of society, present and future [34, 35].
The beneficiaries of the sustainable development disclosure reports are as follows:
Investors: Despite the importance of financial reports for investors in decision-
making, they believe that reports should go beyond financial information to include
information on the environmental and social performance of the company. Workers:
by providing them with important information about services and social sustainability
reports, customers and consumers: by providing information to customers about the
environmental safety of the product, lenders: the company provides them with their
financial and non-financial information needs, government agencies: where they need
information about the extent of their contribution to preserving the environment and
preventing pollution [36–38, 63–65].
As a result of recent developments in the business environment, the scope of
accounting disclosure has expanded to include areas that represent a departure
from generally accepted accounting principles, including the following: Money, and
improving relations with stakeholders, and the costs are represented in the costs of
collecting, operating, reviewing, and disseminating this information, and the costs
arising from competitive disadvantages. Secondly, financial reports related to the
value of the company: It is represented in the information important to the activity that
increases the value of the company, such as human capital, relations with Customers,
innovations, research and development, company reputation, and future information
on management predictions of basic trends on performance measures and their impact
on business [39, 40], in addition to the disclosure of information on the social and
environmental responsibility of the company [41, 60–62].

3 Hypotheses Formulation

Among the studies that dealt with big data: is a study [42], whose results indicated
that the strategic use of data analytics is expected to contribute to the current dynamic
market environment for both researchers and practitioners involved in adopting big
data in developing countries, and a study [43], the results of which indicated that
accounting information systems are not only supplied with historical information
from the various economic transactions carried out by the company.
This goes in line with the results of the study [11] and the study [29], which
indicated the importance of investing in big data applications to support the decision-
maker and the study [44], whose results indicated that there is no Sufficient knowledge
of the importance of big data and how to use it by middle and senior management.
132 N. Ibrahim and A. M. M. Abdelhalim

According to [45], the results of which indicated that big data is classified into six
axes: risk, security, data visualization, predictive analytics, data management, and
data quality, and the study [46] and the study [12], emphasized that the environment
of big data is expected to affect accounting by achieving possession of that data,
dealing with variable and conflicting data, including it in accounting disclosure, the
ability to formulate, store and analyze new performance measures, and the ability to
use Such data helps in making predictions, increasing the transparency of financial
reports, and increasing the ability of financial analysts to extract, analyze and process
such data to help investors obtain accurate information and enhance the follow-up
of investment performance.
Concerning sustainability disclosure, many studies [46, 48, 60–65] provided proof
of the problem of the study and the scarcity of studies on accounting disclosure
on the behaviour of shareholders, especially in the Kingdom of Saudi Arabia, and
the study [47–51], indicated that the main reason that drives Social companies to
the application of social accounting is to improve reputation, another studies [48,
66] indicated the formation of sustainability accounting development trends, future
growth, the importance and nature of sustainability accounting in business, and the
study [32], confirmed that banks are moving at an average Slowness in adopting
sustainability reporting practices, and that sustainability issues are among the highest
priorities of banks, which are directly related to their work. There are differences
in the level of disclosure of environmental and social indicators between public and
private sector banks.
This is indicated by the study [49] that the level of quality of disclosure of interna-
tional relations is more important when companies tend to show a higher value rela-
tionship with summary accounting information, and the study [50], which indicated
that the attitude of stakeholders The use of sustainability information in evaluating
the performance of companies is a major reason for increasing the levels of disclo-
sure about sustainability, another study [14, 52] indicated that increasing the level of
transparency and disclosure of environmental, social and governance performance
positively affects the value of the company, and it also indicated that Increasing disclo-
sure and transparency about sustainability reduces information asymmetry between
different stakeholders and reduces agency costs.
It also dealt with a study [51], which emphasized that the voluntary disclo-
sure of sustainability provides information about the sustainable performance of the
company with the necessity of disclosing sustainability to strengthen the company’s
reputation, achieve continuous improvements, and create financial values for the
company, and a study [52], which emphasized the importance of corporate sustain-
ability With the need to use scientific models to measure and analyze environmental
data, and a study [40, 53–55], which confirmed that this correlation is driven by
higher expected growth rates in the cash flows of these companies, which is reflected
in the increase in profitability.
After reviewing previous studies and their results, the importance of using big
data was demonstrated because of the many benefits that it brings to companies,
which could maintain their superiority and competitive position. Most studies also
agreed on the importance of adopting new or smart technologies. As it has also been
Big Data Analytics and Its Impact on Corporate Sustainability … 133

shown that big data has received a lot of attention from scholars and researchers, due
to its advantages and benefits as it helps companies to achieve their objectives and
enhance overall performance, the current study tries to investigate the impact of big
data on the corporate sustainability disclosure in the digital era, and based on the
above discussion, the study hypotheses can be derived as follows.
H1: The infrastructure needed for big data application affects corporate sustainability
disclosure improvement.
H2: The role of big data in improving performance affects corporate sustainability
disclosure development.
H3: The requirements for applying the use of big data affect corporate sustainability
disclosure improvement.
H4: The challenges faced by companies regarding the use of big data affect corporate
sustainability disclosure improvement.
H5: the practices of overcoming challenges of big data usage affect corporate
sustainability disclosure improvement.

4 Research Methodology

The current study uses the analytical descriptive (quantitative) approach, as it is

the appropriate approach for the study, as through it we can describe, analyze and
interpret phenomena to reach reliable results in decision-making. This approach also
depends on collecting data through questionnaires distributed to the study sample
individuals, to test hypotheses and answer the study questions that were developed
based on the literature of big data and corporate sustainability disclosure that have
been reviewed and analyzed. Accordingly, a study model is built to measure the
impact of big data in improving the level of corporate sustainability disclosure in the
digital era in listed companies in the Saudi Stock Exchange.

4.1 Research Population and Sample

The study population consists of the listed companies on the Saudi Stock Exchange,
which numbered (197) companies categorized into (14) sectors. A sample of (50)
companies is chosen, taking into account that the following conditions are met in the
selected companies.
– That its annual reports be available.
– Provide accurate and published financial statements throughout the study period.
– To be listed for trading in the Saudi Stock Exchange throughout the study period.
134 N. Ibrahim and A. M. M. Abdelhalim

Table 1 Study population

No Description
and sample and response rate
1970 Research population
500 Excluded from the samples
500 Questionnaires sent
388 Questionnaires received
38 Unusable response (incomplete questionnaires)
350 Total useable responses
70% Response rate

The questionnaires were also distributed to (500) employees of the companies

listed on the Saudi Stock Exchange, which were chosen as a sample for the study, as
the number of valid questionnaires reached (350), and Table 1 shows that.

4.2 Description of the Study Variables and Measurement

4.2.1 Independent Variables (Big Data)

Big data is the independent variable in the study, which can be measured through an
indicator consisting of (5) elements, namely (the infrastructure supporting the appli-
cation of big data, the role of big data in improving performance, the requirements
for applying the use of big data, the challenges facing companies in the use of big
data, proposals Overcoming challenges in the use of big data), where this variable is
measured by giving (0) a zero score if the company does not have one of the indica-
tors, and giving (1) one if the company has one of the indicators to some extent, and
giving (2) Two degrees if the company has one of the indicators, then the indicators
are collected and divided by their number to represent the degree of availability of
each element of the company’s big data.

4.2.2 Dependent Variable (Corporate Sustainability Disclosure)

The accounting disclosure of the sustainability of companies is considered the vari-

able of the study, which can be measured through an indicator consisting of (3)
elements, namely (accounting disclosure of environmental standards, accounting
disclosure of social standards, and accounting disclosure of economic standards),
where this variable is measured by giving (0) zero Score if the company does not
have one of the indicators, give (1) one score if the company has one of the indicators
to some extent, and give (2) two if the company has one of the indicators, then the
indicators are collected and divided by their number to represent the degree The
availability of each element, then collecting all the elements and dividing them by
Big Data Analytics and Its Impact on Corporate Sustainability … 135

their number to represent the degree of availability of sustainable development in the

company.

4.2.3 Control Variables

In this study, several variables were used to isolate the relationship between the
independent variable (big data) and the dependent variables (Corporate sustainability
disclosure) as follows.
– Size of the company (SIZE): The size of the company will have an impact on
the data dealt with within the company, as the larger the size of the company, the
greater the volume of data used.
– Age of the company (AGE): The era of the company will have an impact on the
accounting disclosure of the sustainability of companies, as the longer the era of
the company, the greater the sustainability of the company.
– Sector type (INDUS): The type of sector may affect the volume of data and
corporate sustainability disclosure. There are sectors whose nature necessitates
the existence of a large volume of data or directly affects the level of corpo-
rate sustainability disclosure or the nature of its services that enjoy providing
sustainable development to society.

4.2.4 The Study Model

In light of the aim of the study, describing its variables and testing its hypotheses,
we were able to come up with an applied model to verify the hypotheses of the study
and to identify the role of the independent variable on the dependent variable in light
of the isolation of the control variables, as in Fig. 1, as follows:
The data was analyzed using Partial Least Squares Structural Equations Modeling
(PLS-SEM), to construct the study variables model. The suitability of the model for
the data collected through a set of indicators called conformity quality indicators,
which is used to ensure the suitability of the model with the data of the sample
used, as well as the impact of the independent variable on the dependent variable.
The study is an exploratory study to show the impact of big data (BD) on corporate
sustainability disclosure (CSD), To analyze the data statistically and test hypotheses,
it is necessary to verify the validity of the data for statistical analysis through the
use of several tests, including (confirmative factor analysis (CFA), Model-Data Fit
Indication, Discriminant Validity, Convergent Validity, Path Analysis).
136 N. Ibrahim and A. M. M. Abdelhalim

Independent Variable dependent variables

Big Date (BD)

BD1
The infrastructure needed for the application of big data

H1
BD2
The role of big data in improving performance
H2
Corporate sustainability
BD3 H3 disclosure
Big Data Usage Application Requirements (CSD)
H4
7/ Data analysis: BD4
Challenges faced by companies in the use of big data
H5

BD5
practices of overcoming challenges in the use of big data

Fig. 1 The study model

5 Results and Interpretation

5.1 Assessment of the Measurement Model

Tables 2 and 3 the first step in Partial Least Squares Structural Equation Modeling
(PLS-SEM) involves evaluating the standard model, which is related to examining
the validity and reliability of the questionnaires as follows.
To make sure that the element used to represent the factor is actually representative
of it, the confirmatory factor analysis (CFA) was also used by calculating the confir-
mation ratio to represent the available factors in the theoretical framework affected
by the predicted factors as influential factors, and it was shown from the results of
the confirmatory factor analysis of the sub-constructions of the data questionnaire
The large scale (BD) and the Corporate sustainability disclosure (CSD) showed that

Table 2 Relevant indicators of the measurement model

AVE > 0.500 Composite reliability > 0.700 Cronbach’s alpha > 0.700 Construct
0.674 0.854 0.823 BD1
0.580 0.858 0.832 BD2
0.682 0.865 0.829 BD3
0.630 0.867 0.853 BD4
0.628 0.844 0.894 BD5
0.631 0.898 0.871 CSD
Big Data Analytics and Its Impact on Corporate Sustainability … 137

Table 3 Square root of the AVEs (Correlation among constructs)

CSD BD5 BD4 BD3 BD2 BD1 Construct
0.771 BD1
0.792 0.702 BD2
0.873 0.583 0.571 BD3
0.791 0.482 0.744 0.559 BD4
0.842 0.532 0.525 0.612 0.693 BD5
0.820 0.701 0.502 0.501 0.589 0.627 CSD

all standard saturation coefficients ranged between (0.729−0.891), which indicates

the quality of the saturation coefficients for the questionnaires under study.
To ensure the conformance quality indicators of the measurement model (Model-
Data Fit Indication), which are related to the extent to which the theoretical model
matches the field data, as all the conformance quality indicators of the measure-
ment model were greater than the required standards, which indicates the quality
of the measurement model and its conformity with field data And that the expres-
sions measure what they were prepared for, and that the measurement structure is
appropriate to what we assumed and will lead to acceptable results.
To evaluate discriminant validity and convergent validity, there are two common
methods in research. The first method is that the correlation between the sub-
constructs of the questionnaire should not be high, as all correlations between the sub-
constructs of the measurement model ranged between (0.52–0.76), and this indicates
that the correlation between the sub-constructs of the questionnaire is not complete,
but it is at an acceptable level. The second method is through the Fornell-Larcker
criterion, where the square root of the values of the explained coefficients of variance
(AVE) is compared with the matrix of correlations between the underlying variables,
and the square root (AVE) of each construct must be It is higher than any correlation
with another construct, and it has been shown through the variables correlation matrix
that the square root values of the extracted average variance (AVE) are greater than
the correlation coefficients between the sub-constructs of the model, which indicates
the validity of differentiation for all constructs of the measurement model.

5.2 Assessment of the Structural Model

It appears from Table 4 that the study benefited from the ratio of variance to evaluate
the internal structure of the structural model, through the coefficient of determina-
tion (R2), where the value of the determination coefficient (R2) was 0.561 for the
corporate sustainability disclosure (CSD), as this result showed that the changes
that occurred were able to explain (56.1%) of the incident variance, which reflects a
mediated level of predictive power. Another test that was performed on the structural
model was the predictive relevance of the model using Stone-Geiser’s Q2 (iteration
138 N. Ibrahim and A. M. M. Abdelhalim

Table 4 Results of the hypothesis testing of the relationship

Decision P-value T-value Path coefficient Relationship Hyp. no
Supported 0.030 2.784 0.191 BD1 CSD H1
Supported 0.000 5.666 0.588 BD2 CSD H2
Supported 0.000 6.871 0.485 BD3 CSD H3
Unsupported 0.043 –2.702 –0.612 BD4 CSD H4
Supported 0.000 4.985 0.387 BD5 CSD H5

across cross-validation). The Q2 value of the CSD was greater than (0), which means
that the model was satisfactorily fit.
Regarding the infrastructure supporting the application of big data (H1), it has a
significant positive impact on the corporate sustainability disclosure (CSD) as (β =
0.191) while ((t = 2.784, p < 0.05)), thus the first hypothesis (H1) is fulfilled).
As for the role of big data in improving performance (H2), it has a significant
positive impact on the corporate sustainability disclosure (CSD), as (β = 0.588)
while (t = 5.666, p < 0.01)), and thus the second hypothesis (H2) is fulfilled).
Likewise, for the requirements of applying the use of big data (H3), it has a
significant positive impact on the corporate sustainability disclosure (CSD), as (β =
0.485) while (t = 6.871, p < 0.01)), and thus the third hypothesis (H3) is fulfilled.
In addition, regarding the challenges that companies face in using big data (BD4),
it has an insignificant impact on the corporate sustainability disclosure (CSD) as (β
= –0.612) while ((t = -–2.702, p < 0.05)), and thus is achieved the fourth hypothesis
(H4).
Finally, for the practices to overcome the challenges or barriers in big data usage
(BD5), it has a significant positive impact on the corporate sustainability disclosure
(CSD) as (β = 0.387) while ((t = 4.985, p < 0.01)), and thus the fifth hypothesis is
fulfilled (H5).

6 Discussion and Conclusion

The current study reached several results, the most important of which are:
– The coefficient of determination of the model (R2) was (0.561), which means that
(56.1%) of the change that occurs to the dependent variable (Corporate sustain-
ability disclosure CSD) is a result of the change that occurs in the indicators of
the independent variable (Big Data BD) in companies listed on the stock market
Saudi.
– Providing the infrastructure that supports the application of big data (H1) that
works to improve the corporate sustainability disclosure (CSD) in the Saudi Stock
Exchange.
Big Data Analytics and Its Impact on Corporate Sustainability … 139

– Activating the role of big data in improving performance (H2) works to improve
the corporate sustainability disclosure (CSD) in the Saudi stock market.
– Providing requirements for applying the use of big data (H3) that works to improve
the corporate sustainability disclosure (CSD) in the Saudi Stock Exchange.
– Reducing the challenges faced by companies in the use of big data (H4) working to
improve the corporate sustainability disclosure (CSD) in the Saudi stock market.
– Implementation of proposals to overcome the challenges in the use of big data
(H5) working to improve the corporate sustainability disclosure (CSD) in the
Saudi stock market.

7 Recommendations

In light of the results of the theoretical study and the results of the applied study, we
can suggest the following recommendations.
– Urging officials to use big data technology in the companies listed on the Saudi
Stock Exchange because of its many benefits in developing these companies.
– The need to pay attention to all indicators and requirements that can contribute to
improving the corporate sustainability disclosure (CSD) in companies listed on
the Saudi Stock Exchange because of their national and international economic
returns.
– Ensure to follow the implementation of accounting disclosure standards for corpo-
rate sustainability (CSD) in companies listed on the Saudi Stock Exchange,
to ensure that an appropriate degree of competitiveness is achieved in those
companies.
– Emphasizing the use of the applied model proposed by the study because of its
applied importance, which reflects positively on the sustainability, competitive-
ness, and profitability of the companies listed on the Saudi Stock Exchange.
– Preparing, qualifying, and refining the employees of the companies listed on the
Saudi Stock Exchange on how to practice the indicators of big data management to
ensure achieving a high level of corporate sustainability disclosure (CSD), which
is reflected in the achievement of sustainable development.
– Conducting more other studies to study the role of big data (BD) on various other
variables, as well as to study the relationship of corporate sustainability disclosure
(CSD) with various other variables.

8 Future Research Avenues

There are still research gaps that need to be filled regarding the impacts of big
data applications, such as the challenges facing the application of big data and the
impact of applying big data on profitability in different economic sectors, different
application environments, and different research approaches.
140 N. Ibrahim and A. M. M. Abdelhalim

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Fraud Auditing and Forensic Accounting
a Review Paper

Sarah Aqeel Abdul-Aziz Khalil Ebrahim and Abdalmuttaleb Al-Sartawi

Abstract Forensic accounting is considered one of the most important professions in

the current era, as it contributes to detecting and limiting financial manipulations. The
importance of forensic accounting increases with technological development, as the
methods of fraud witness a different nature that requires high technical skills from the
forensic accountant and the auditor. It is worth mentioning that forensic accounting
cannot be viewed in isolation from the auditing profession, but the auditing profes-
sion is linked to the technical opinion of the auditor within the limits permitted by
accounting standards, and auditing standards compared to forensic accounting that
is not limited with the scope of the accounting standards and auditing standards.
The current paper sheds light on the most important differences between forensic
accounting and auditing and sheds light on previous studies in the field of forensic
accounting from a theoretical point of view.

Keywords Fraud · Auditing · Forensic accounting · Fraud detecting · Accounting

profession

1 Introduction

Accounting at the present time is very important for companies especially large
companies that need accounting and financial auditing of accounting operations, as
accounting is the recording of financial operations and economic events according to
a specific system. Accounting is concerned with the business activities of companies
[1, 5]. If we look at one aspect, we find that accounting is of great importance when
detecting “audit fraud” [2].

S. A. A.-A. K. Ebrahim
Manama, Bahrain
e-mail: [email protected]
A. Al-Sartawi (B)
Ahlia University, Manama, Bahrain
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 145
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_11
146 S. A. A.-A. K. Ebrahim and A. Al-Sartawi

Auditing is as important as accounting. The importance of audit lies in examining

the books and records of the company for the data they contain, within the framework
of certain accounting principles [3–7, 21]. The economic development in the labor
market has led to the spread of auditing in a large and wide manner, which made
auditing witness an increasing demand, whether it is internal auditing such as: owners
and shareholders, or external auditing such as: banks and tax management [4, 8–11].
This leads us to the conclusion that the larger the organization, the greater our
need for auditing, and this is because employees in companies resort to fraud and
embezzlement [12, 22, 34]. And the internal auditor may hide some accounting errors
that companies make by changing some data and numbers in the financial statements
to make the company more profitable, and this is very dangerous, because that may
lead to a great loss for business owners, and from here begins the role of forensic
accounting, where Forensic accounting plays an important role in detecting any fraud
by the auditor by hiding any illegal mistakes of the company [13–15, 23, 25].

2 Literature Review

Forensic accounting has an explanation that shows the reasons for selecting certain
types of arguments to detect fraud and fraud in financial and non-financial reports
[24]. These reasons and methods depend on the accounting and non-accounting
decisions, which the auditor considers [16–19, 27–30]. This interpretation is the
most useful in discussions and debates. It is useful for academics and is also useful
in the problem-solving process for preparing global financial reports [18, 43, 46].
This theory is discussed in a group of hypotheses for criminal investigation. Does
forensic accounting meet social standards as a profession? This is according to the
Australian community [11, 19, 26, 44]. Through these three: design, methodology,
and approaches, analytical studies of these social criteria for the forensic accounting
profession were developed, as interviews with elite forensic accountants were used
[20, 36, 59].
Forensic accounting has been recognized in Australia as a profession, as this
profession is independent and mandatory to be recognized [5, 9, 21, 22]. Considered
to have a significant impact on the professional reality. Many social contributions
through solving social problems and providing the necessary knowledge for their
roles while carrying out their work. Recently, due to the large number of scams,
this has received attention from the media, and that is how to solve this problem
[23–26, 35, 39].
Fraud is one of the most important reasons that lead to the increase in financial
crises in the public and private sectors. It is certain that fraud has negative economic
consequences all over the world. Understanding fraud, the nature of it and the people
who carry it out is one of the most important reasons to prevent the spread of fraud
at all levels. The responsibilities of auditors and accountants are clear these days
Fraud Auditing and Forensic Accounting a Review Paper 147

[37, 38]. Recently awareness about accounting, auditing, and technology is become
essential to solve problems and conflicts on the level of personal and practical life
[27, 28, 47, 52]. People’s need for this knowledge led to the emergence of forensic
accounting and scrutiny of errors in mathematical operations [29, 53].
This is what led to revealing the relationship between forensic accounting, fraud
auditing and criminal accounting. Nowadays lawyers, police, companies, banks, and
government representatives are interested in forensic accounting to overcome fraud
risk [30–33, 59].

3 Accounting and Forensic Accounting

The difference between forensic accounting and regular accounting is that the former
detects fraud by checking accounts and knowing the gaps. Knowledge of the science
of auditing leads to benefits for forensic accounting [39–42]. Conversely, knowing
the technical aspects of accounting has a positive impact on auditing. There are three
main activities of forensic accounting: administrative support, legal support, and
expert testimony [34, 43].
It is possible to take advantage of the methods of auditors that they apply to
detect fraud methods, and in most developed countries there are those who provide
services in the field of forensic accounting and auditing. And in other countries, the
authorities may take a special arrangement for this field according to regulations
related to criminal accountability within a legal framework [45].
Depending on the previous discussion and after analyzing the previous literature
we can categorize the previous studies depending on the main objectives of each
study as follow:

4 Defining a Forensic Audit

References [24, 48, 53, 54] defining forensic auditing, as disclosures about operations
Fraud and new financial scandals became rife in newspapers and magazines. As a
result, the traditional methods of monitoring the financial activities of companies
engaged in the accounting profession. At the same time, there is recognition of
generally accepted accounting principles. The International Accounting Standards
Board and standards recognized in the United States will change practices used to
combat corporate wrongdoing that investigators must adapt to the study reached
several conclusions. Depending on that the work of forensic audit is important to
provide Stakeholders with assurances about the economic risks faced by the company.
148 S. A. A.-A. K. Ebrahim and A. Al-Sartawi

5 The Role of Forensic Accountants in Fraud

Investigations-Importance of Attorneys and Judges
Perceptions

References [15, 31, 36, 52] clarify the importance of qualifying and training the
forensic accountant considering the escalation. The study also discussed the impor-
tance of understanding the evidence provided by the reports. Accordingly, Forensic
checks must be done in specific ways to extract and classify them. The study
concluded that the forensic accountant who performs criminal audit work must
prepare a clear and understandable reports that are based on audit procedures and
investigative skills confirmed and the reports will be used as evidence when needed.

6 Practical Issues: Fraud Detection

Few studies attempt to identify indicators of fraud. References [37, 49, 57, 58] argued
that the symptoms of fraud are an indicator of the presence of fraud because there
is evidence that is supported by statistics. Usually, the academic research relies on
statistics, while some regulators do not rely on this theory, but rather agree that there
is a relationship between symptoms of fraud and actual fraud. Moreover, there is
complementary evidence that goes beyond statistics, and from this supplementary
evidence: interrogations, experts, witnesses, interviews, questionnaires, and others
[50, 51]. On the other side the regulators dos does not believe in the straight-line
justification which is built on the cause-and-effect consumptions which means that
it is not necessarily to find actual fraud when symptoms of fraud exist.
Another study by [11, 53–56] Identify weaknesses, analytical differences,
lifestyles, and unusual behaviors. Some opinions indicate that statistics help to detect
fraud, but it is not necessary that the symptoms of fraud mean the existence of actual
fraud. References [20, 23, 46] Investigated some symptoms of fraud and did not
produce evidence of fraud.

7 Conclusion

The current paper reviewed some previous studies about forensic accounting and
auditing to shed light on the importance of forensic accounting in detecting fraud
by auditing accounts and detecting accounting errors. The paper mentioned that
there are specific methods for detecting fraud using forensic accounting, based on
the accounting decisions that the auditor sees. The report concludes that with the
development of technology, the chances of exposure to fraud increase, which justify
the need for forensic accounting.
Fraud Auditing and Forensic Accounting a Review Paper 149

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FinTech Education: An Exploratory
Study from the Point View of Business
Students

Husain Alshraifa and Zakeya Sanad

Abstract In recent years, universities all over the world have begun to develop
courses that support financial technology (FinTech) innovation in higher educa-
tion institutions. When it comes to the developing region, this step is still in the
preliminary stage. Therefore, this study investigates the viewpoints, levels of accep-
tance, and awareness of business students regarding the inclusion of FinTech learning
materials in the business academic programs of higher education. A questionnaire
was sent targeting undergraduate business students throughout universities in the
Kingdom of Bahrain. The findings revealed that most students were not satisfied with
the amount of FinTech material in their curriculum and supported including more
FinTech learning material in the accounting curriculum. Furthermore, the respon-
dents believed that adding FinTech to their curriculum would help them in their future
career. However, the respondents agreed that one of the negative consequences of
adopting more Fintech in the business curriculum is that students may become more
dependable and less analytical. The study recommends that the FinTech learning
material should be added to the business curriculum as there is a significant level
of interest and acceptance among undergraduate business students. By highlighting
the knowledge gaps and possible adverse consequences of adopting fintech in higher
education, this study contributes to the body of literature and offers suggestions for
how educators can effectively incorporate fintech into their curriculum.

Keywords Fintech · Higher education · Artificial intelligence · Business

students · Bahrain

H. Alshraifa
Freelancer, Manama, Bahrain
Z. Sanad (B)
Ahlia University, Manama, Bahrain
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 153
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_12
154 H. Alshraifa and Z. Sanad

1 Introduction

FinTech, also known as Financial Technology, is a hot topic that spans several disci-
plines and combines finance, technology and innovation management [1–4], FinTech
is considered a contemporary approach to working with financial institutions that
have significantly improved our lives and provided fresh insight into how the tech-
nological revolution is developing [14, 27, 32]. Bahrain has been gradually defining
itself as a fintech hub in the Middle East and North Africa region. The Central Bank
of Bahrain has supported Bahrain to attract a number of fintech startups and build a
thriving ecosystem. One of the biggest and most significant efforts the government
has taken to foster fintech in Bahrain is the establishment of Bahrain Fintech Bay,
one of the biggest fintech hubs in the Middle East. As part of its goals to become a
knowledge-based economy, Bahrain has made significant investments in technology
and artificial intelligence over the past 15 years [8].
The Kingdom of Bahrain is a great illustration of how FinTech has replaced using
cash, checks, sending money abroad, and most importantly, saving everyone time.
Since the majority of Bahrainis now use contactless payment applications given that
they are quicker, many financial institutions like the National Bank of Bahrain, ILA,
and Benefit Pay are utilizing technology to provide better contactless financial trans-
actions. The COVID-19 pandemic served as a great wake-up call to the importance
of fintech in modern society. Early in March 2020, cash was still the main form of
payment for most Bahrainis. That quickly changed, though, because of the pandemic,
which made people more cautious and forced them to seek out alternatives such as
online shopping [5–7, 24]
The use of financial technology during the COVID-19 pandemic would have an
impact on the educational system as well. The need to switch from face-to-face
classes to virtual ones inspired researchers to look at the implications of fintech in
higher education [9, 10, 25]. Hence, this study is expected to provide a thorough
overview of how well-equipped the higher education sector in Bahrain is for coping
with FinTech innovation from the point of view of business students. Hence, the
current study goals are as follows:
• To measure the level of FinTech awareness among undergraduate business
students.
• To explore the students’ acceptance in including more FinTech material in their
curriculum in the future.
• To clarify the advantages and disadvantages of including FinTech learning
material in the higher education business curriculum.
The study adds to the body of knowledge by elaborating on the benefits and draw-
backs that FinTech presents to the business education sector. The study additionally
proposes practical recommendations and policy suggestions to raise the standard of
business specialization in higher education in response to the growth of FinTech.
The study also advances the body of knowledge and literature on fintech and how
business students perceive its effects.
FinTech Education: An Exploratory Study from the Point View … 155

2 Literature Review

We all use fintech daily, but it’s crucial that we comprehend how it got started.
According to Arner et al. [5], FinTech refers to solutions for finance that can be
accomplished through technology. According to Leong and Sung [1], FinTech is
an innovative way of interacting with financial institutions that has significantly
improved our quality of life and provided fresh insight into how the technological
revolution is developing. Paul and Sadath [33] divided FinTech into three stages
to explain how it evolved from 1866 to the present. The first phase is known as
FinTech 1.0, and it spans the years 1866–1967. Paul and Sadath [33] discovered that
earlier technological developments like the steamship, telegraph, and railroads facili-
tated better financial connections between countries. Although FinTech is frequently
regarded as a recent innovation, its roots could be found in 1866, the year that the
first transatlantic cable was installed [31].
The second phase, known as FinTech 2.0, goes from 1967 to 2008. Modern auto-
mated payment systems and electronic clearing services got their start in 1968 with
the UK Interbank Computer Bureau, which was followed by the US Clearing House
Interbank system and Fedwire [37]. In the third phase, known as FinTech 3.0 (2008–
present), researchers have acknowledged the significance of FinTech following the
financial crisis and the shift in retail customers’ perceptions of who is qualified to
offer financial services. FinTech 3.0 was sparked by the 2008 global financial crisis,
though its exact formation is unknown [5, 11–13]. In the third phase of FinTech, tech-
nology advanced quickly, and financial service providers changed. Because startups
and technology companies can serve customers and businesses more effectively, this
phase poses a threat to financial institutions [14, 23, 32].
Professional bodies have emphasized the necessity of integrating technological
training into different business fields such as accounting to provide graduates with
the skills they need. Different facets of business education have been impacted by the
growing Fintech adoption. The way financial transactions are carried out is changing
due to FinTech, and this change is having an impact on the business curricula in
higher education.
Besides, a study investigated how FinTech was affecting higher education in
Indonesia [22]. According to the study, those involved in the accounting educa-
tion sector view the development of FinTech favorably and have upgraded their
course offerings and teaching resources as well as arranged seminars and training
sessions for both students and lecturers. According to Ojha [4], the widespread use
of technology in India has had a significant impact on a variety of aspects of life,
including education. Additionally, the quality of business graduates may increase
with the incorporation of FinTech in higher education. Fintech can help instructors
of business courses give their students a more interesting and interactive learning
experience. This can improve students’ comprehension of various business concepts
and equip them with useful skills for the labor market today [10, 15–17].
156 H. Alshraifa and Z. Sanad

In the GCC, research on the impact of fintech on higher education was conducted
in 2020 with the goal of assessing the opportunities and educational initiatives avail-
able in universities [25–27]. According to the study, Fintech has the potential to
be among the most significant technological advancements, so it is advised that
all educated individuals in the GCC think about its significance. Additionally, the
connections between educational institutions like schools, colleges, and universities
as well as their ties to society can be transformed by blockchain technology. In addi-
tion, according to AlZoubi and Al-Dmour [17], the use of Fintech in Accounting
education is an essential component of the accounting curriculum in the GCC coun-
tries. They also argued that incorporating FinTech into accounting education can
give students hands-on experience with financial technology, which is essential in
the current accounting profession.
The Kingdom of Bahrain has been positioning itself as a FinTech hub in the
Middle East, with the Central Bank of Bahrain actively promoting fintech adoption
in the country. The financial sector has been quick to adopt fintech, with accounting
firms adopting various fintech tools, including cloud accounting software, robotic
process automation, and blockchain technology [8, 18]. As a result, accounting
education needs to adapt to the new demands of the industry to produce graduates
with the necessary skills to work effectively in a fintech-driven financial landscape
[34, 36, 38].
The transformation of teaching and learning methodologies in education has been
greatly aided by FinTech [24, 28, 36]. Universities can now provide their students
with a more individualized and interesting learning experience because of the use
of Fintech tools like mobile apps and online platforms [38]. These tools make it
easier to create gamified and interactive learning materials, which improves learning
effectiveness and efficiency [3, 21].
Additionally, the development of decentralized financial systems made possible
by blockchain technology has opened up new opportunities for financial innovation
in the education sector [19, 36].
Fintech has had a significant impact on Bahraini education, but there are still
some issues that need to be resolved. The lack of knowledge and comprehension of
fintech among educators and students is one such issue. Some institutions may not
be able to afford the significant training and investment required to integrate Fintech
into the curriculum [16, 30]. Due to the rapid pace of technological change, it might
also be difficult to update the curriculum to reflect the most recent developments in
FinTech [17, 20]. The advanced technical skills required for the use of Fintech in
business education may not be shared by all business students and educators [10,
29]. In addition, the quick pace of Fintech technological advancements necessitates
ongoing infrastructure maintenance and updates, which may not be feasible for all
institutions [3, 21].
Since the FinTech has affected different sectors internationally, there is a need
to explore thoroughly the possible impact of FinTech in higher education from the
students’ point of view. Hence, this study would provide further explanation regarding
the students’ perception about the impact of FinTech teaching material in the higher
education business curriculum. The study also measures the level of the students’
FinTech Education: An Exploratory Study from the Point View … 157

Table 1 Respondents’
Respondents’ characteristics N = 166 %
demographic characteristics
Gender Total = 166
Male 104 63
Female 62 37
Age Total = 166
18–24 106 64
25–34 46 28
35–44 10 6
45 or older 4 2.4

awareness about FinTech. The study also clarifies the advantages and disadvantages
of adopting more FinTech learning programs and material in the higher education
business courses.

3 Research Methodology

3.1 Survey Instrument and Sample

The research design is based on a quantitative approach that helped the researchers
describe the phenomenon under study in detail and identify its key traits. In this study,
a questionnaire was used as a data collection tool, and IBM SPSS was used to analyze
the data. Students majoring in business at all of the universities in the Kingdom of
Bahrain are included in the study’s sample. Additionally, because undergraduate
business students were the target population, convenience sampling was used to
create the sample. Because of its practicality and feasibility for the research given
the time and resource constraints, the convenient sampling technique was chosen.
The online surveys were used to gather the data from the chosen sample. To make sure
the sample size was representative of the intended target population, the response
rate was also evaluated. 166 responses were received and the response rate was 44%
(Table 1).

4 Findings and Discussion

Reliability analysis is important for ensuring that a scale accurately measures the
construct it intends to measure. In some cases, reliability analysis, specifically
Cronbach’s alpha tests, can be useful for evaluating the consistency of multiple-
question Likert scale surveys that assess latent variables, which are factors that
158 H. Alshraifa and Z. Sanad

are not directly observable in everyday life. The test help researchers to assess the
reliability of the survey results and ensure that the survey is measuring what it is
intended to measure [35].
Cronbach’s alpha is a statistic that shows how closely related a group of test items
is when taken collectively [13]. If the survey’s items have a high alpha value, there
may be a substantial relationship between them. Low alpha scores could be a sign
that the test did not have enough questions. Incorporating more pertinent test items
might raise alpha. The alpha value is between 0 and 1. The data is not acceptable if
the alpha value is less than 0.5, bad if it is between 0.5 and 0.6, and doubtful if it is
between 0.6 and 0.7; however, the data is acceptable and suitable for further research
if the alpha value is larger than 0.7 [26].
The results of the reliability analysis by testing Cronbach’s alpha are shown in the
above Table 2. The results indicated that after answering a questionnaire questions,
the study has an alpha value of 0.924. However, the alpha value refers to the accept-
ability of data as the alpha is above 0.7. Moreover, to achieve the research objectives,
the descriptive statistics are presented next.
Table 3 shows the descriptive statistics for objective 1, which aims to measure
the level of FinTech awareness among undergraduate business students. The table
presents the minimum and maximum scores, the mean and standard deviation for
two questions that measure confidence and familiarity with FinTech. The average
score for both questions is 3.455, indicating a moderate level of FinTech awareness
among the students. The standard deviation for both questions is high, indicating a
wide range of responses from the students.
Table 4 shows the results of a survey conducted to explore the acceptance of
undergraduate business students towards the inclusion of more FinTech material in
their curriculum in the future.
The mean scores for all the questions indicate a positive response towards the
integration of FinTech in their Accounting coursework. Students believe that the

Table 2 Reliability test—Cronbach Alpha

Cronbach’s Alpha N of Items
0.924 27

Table 3 Results related to objective 1: To measure the level of FinTech awareness among the
undergraduate business students
Statements N Minimum Maximum Mean Std.
deviation
How confident are you in your understanding 166 1 5 3.46 1.234
of what FinTech is?
How familiar are you with the different types 166 1 5 3.45 1.296
of FinTech, such as blockchain, mobile
payments, and robo-advisors?
Average 3.46
FinTech Education: An Exploratory Study from the Point View … 159

Table 4 Results related to objective 2: To explore the students’ acceptance in including more
FinTech material in their curriculum in the future
Statements N Minimum Maximum Mean Std.
deviation
FinTech should be included more in the 166 1 5 3.98 1.131
accounting curriculum in the future
I believe that including more FinTech 166 1 5 3.96 1.089
material in the accounting curriculum will
enhance my knowledge and understanding of
the accounting industry
I am comfortable with incorporating FinTech 166 1 5 3.98 1.044
tools and software in my accounting
coursework
I will use FinTech tools and software in my 166 1 5 3.96 1.141
future accounting profession
I believe that knowledge and understanding of 166 1 5 4.04 1.047
FinTech will be beneficial for my future
career prospects
The inclusion of FinTech in the Accounting 166 1 5 4.02 1.056
curriculum will enhance the overall quality of
the education provided by your institution?
The inclusion of FinTech in the Accounting 166 1 5 4.03 1.041
curriculum will prepare me for the future
demands of the accounting industry
I believe that the inclusion of FinTech in the 166 1 5 4.02 1.081
Accounting curriculum will help you stand
out among your peers in the job market
I believe it is for higher education institutions 166 1 5 4.02 1.123
to keep up with the changing demands of the
accounting industry, including the integration
of FinTech material in the curriculum
I believe that FinTech will play a significant 166 1 5 4.16 1.009
role in the future of the accounting industry

inclusion of more FinTech material will enhance their knowledge and understanding
of the accounting industry, and they are comfortable with incorporating FinTech tools
and software in their coursework.
Furthermore, they believe that knowledge of FinTech will be beneficial for their
future career prospects and that the inclusion of FinTech will prepare them for the
future demands of the accounting industry. The students also believe that the inclusion
of FinTech in the Accounting curriculum will help their institution stand out in the
job market and that it is important for higher education institutions to keep up with
the changing demands of the accounting industry. Overall, the results suggest that
undergraduate business students are receptive to the idea of integrating FinTech
material into their accounting curriculum.
160 H. Alshraifa and Z. Sanad

Tables 5 and 6 present the results of a study conducted to clarify the advan-
tages and disadvantages of incorporating FinTech in the Accounting curriculum. The
average score for each question ranges from 2.92 to 4.09, indicating a general positive
sentiment towards the benefits of including FinTech in the curriculum. Respondents
strongly agree that adding FinTech will improve their job prospects, make them
more competitive in the job market, and prepare them for the future demands of
the accounting profession. However, there are also some concerns, with respondents
agreeing that the inclusion of FinTech may lead to a decrease in the focus on funda-
mental accounting principles and concepts and traditional accounting skills such as
bookkeeping. Additionally, some respondents believe that adding FinTech may make
the curriculum more complex and difficult for some students to understand and lead
to a shift in the focus of the curriculum towards technical skills.
The previous section presented general results, in this section, the results are based
on the mean difference among the male and female respondents of the study sample.
Table 7 displays the findings from Objective 1, which sought to assess the amount
of FinTech knowledge among undergraduate business students. Male and female
participants’ replies were evaluated to determine their level of confidence and knowl-
edge with FinTech ideas. When asked if they were confident in their comprehension
of what FinTech is, both male and female participants reported the same degree of
confidence. Males had a mean score of 3.46, while females received a slightly lower
score of 3.45. In terms of knowledge with different types of FinTech, both male

Table 5 Results related to objective 3—part A: To clarify the FinTech advantages

Statements N Minimum Maximum Mean Std.
deviation
How strongly do you agree that adding 166 1 5 3.95 1.091
FinTech in the Accounting curriculum will
enhance your understanding of accounting
concepts?
How strongly do you agree that adding 166 1 5 4.09 1.026
FinTech in the Accounting curriculum will
improve your job prospects in the
accounting profession?
How strongly do you agree that adding 166 1 5 4.03 1.081
FinTech in the Accounting curriculum will
make you more competitive in the job
market?
How strongly do you agree that adding 166 1 5 3.96 1.125
FinTech in the Accounting curriculum will
prepare you for the future of the accounting
profession?
How strongly do you agree that adding 166 1 5 3.99 1.093
FinTech in the Accounting curriculum will
improve your critical thinking and
problem-solving skills?
FinTech Education: An Exploratory Study from the Point View … 161

Table 6 Results related to objective 3—part B: To clarify the FinTech disadvantages

Statements N Minimum Maximum Mean Std.
deviation
How strongly do you agree that adding 166 1 5 2.98 1.399
FinTech in the Accounting curriculum may
lead to a decrease in the focus on fundamental
accounting principles and concepts?
How strongly do you agree that adding 166 1 5 2.92 1.386
FinTech in the Accounting curriculum may
lead to a decrease in the importance of
traditional accounting skills such as
bookkeeping?
How strongly do you agree that adding 166 1 5 3.06 1.43
FinTech in the Accounting curriculum may
lead to a reliance on technology that could
make accounting students less independent
and analytical?
How strongly do you agree that adding 166 1 5 2.97 1.355
FinTech in the Accounting curriculum may
make the curriculum more complex and
difficult for some students to understand?
How strongly do you agree that adding 166 1 5 3.02 1.39
FinTech in the Accounting curriculum may
lead to a shift in the focus of the curriculum
away from practical accounting skills towards
technical skills?

and female participants had a comparable degree of familiarity. Males had a mean
score of 3.43, while females received a slightly higher score of 3.48. The aggregate
mean score of 3.46 indicates that members of both genders had a modest level of
FinTech awareness. men and females had nearly comparable average scores, with
men scoring 3.45 and ladies getting 3.47.
These data imply that, regardless of gender, undergraduate business students have
a pretty equal degree of confidence and knowledge with FinTech principles. Although
there is still space for development in their comprehension of FinTech, the results
show that the participants have a moderate level of awareness.
Table 8 displays the findings from Objective 2, which sought to determine
students’ approval of integrating more FinTech content in their accounting curriculum
in the future. Male and female participants’ replies were studied to better understand
their perspectives on the incorporation of FinTech and its possible advantages.
According to the findings, both male and female participants showed a favor-
able attitude regarding the inclusion of additional FinTech content in the accounting
curriculum. Male participants scored 3.92 on average, suggesting a modest level of
agreement. Female participants had a higher mean score of 4.19, indicating a greater
willingness to include more FinTech content.
162 H. Alshraifa and Z. Sanad

Table 7 Results related to objective 1: To measure the level of FinTech awareness among the
undergraduate business students
Statements Gender N Mean Std. deviation Std. error mean
How confident are you in your Male 104 3.46 1.277 0.125
understanding of what FinTech Female 62 3.45 1.169 0.148
is?
How familiar are you with the Male 104 3.43 1.275 0.125
different types of FinTech, such Female 62 3.48 1.34 0.17
as blockchain, mobile
payments, and robo-advisors?
Average 3.46
Male Average 3.45
Female Average 3.47

The findings indicate that both male and female students acknowledge the need of
incorporating FinTech into their accounting coursework. They feel that incorporating
FinTech will help them have a better grasp of the accounting sector. Participants
also showed comfort with adding FinTech tools and software into their courses,
demonstrating their willingness to take advantage of technology improvements in
the industry.
In addition, both male and female participants believed that understanding and
knowledge of FinTech will help their future employment opportunities and equip
them for the needs of the accounting sector. They also thought that incorporating
FinTech into the curriculum will improve overall educational quality and help
students stand out in the job market.
The findings indicate an agreement among the participants, highlighting the
need of higher education institutions keeping up with changing accounting industry
demands by including FinTech content into the curriculum. Participants noted the
major role FinTech is projected to play in the accounting industry’s future.
Both male and female participants expressed an interest in integrating more
FinTech subject in the accounting curriculum. They identified the potential bene-
fits and advantages it provides in terms of knowledge growth, career opportunities,
and accounting profession preparation for the future.
Table 9 summarizes the findings from Objective 3, which sought to highlight the
benefits and drawbacks of incorporating FinTech into the accounting curriculum.
Male and female participants’ replies were evaluated to better understand their
perspectives on the impact of FinTech integration.
On average, both male and female participants felt that incorporating FinTech into
the accounting curriculum would have a number of benefits. The overall average of
all participants was 3.54. Female participants had a higher average score of 3.70,
indicating greater agreement, than male participants, who received a score of 3.38.
FinTech Education: An Exploratory Study from the Point View … 163

Table 8 Results related to objective 2: To explore the students’ acceptance in including more
FinTech material in their curriculum in the future
Statements Gender N Mean Std. deviation Std. error mean
FinTech should be included more Male 104 3.88 1.18 0.116
in the accounting curriculum in Female 62 4.16 1.027 0.13
the future
I believe that including more Male 104 3.83 1.136 0.111
FinTech material in the Female 62 4.19 0.972 0.123
accounting curriculum will
enhance my knowledge and
understanding of the accounting
industry
I am comfortable with Male 104 3.91 1.034 0.101
incorporating FinTech tools and Female 62 4.08 1.06 0.135
software in my accounting
coursework
I am comfortable with Male 104 3.88 1.172 0.115
incorporating FinTech tools and Female 62 4.1 1.082 0.137
software in my accounting
coursework
I believe that knowledge and Male 104 3.9 1.066 0.105
understanding of FinTech will be Female 62 4.27 0.978 0.124
beneficial for my future career
prospects
The inclusion of FinTech in the Male 104 3.93 1.073 0.105
accounting curriculum will Female 62 4.18 1.017 0.129
enhance the overall quality of the
education provided by your
institution?
The inclusion of FinTech in the Male 104 3.95 1.083 0.106
accounting curriculum will Female 62 4.16 0.961 0.122
prepare me for the future
demands of the accounting
industry
I believe that the inclusion of Male 104 3.88 1.185 0.116
FinTech in the accounting Female 62 4.24 0.843 0.107
curriculum will help you stand
out among your peers in the job
market
I believe it is for higher education Male 104 3.96 1.14 0.112
institutions to keep up with the Female 62 4.13 1.094 0.139
changing demands of the
accounting industry, including
the integration of FinTech
material in the curriculum
I believe that FinTech will play a Male 104 4.05 1.074 0.105
significant role in the future of Female 62 4.34 0.867 0.11
the accounting industry
Average 4.05
Male Average 3.92
Female Average 4.19
164 H. Alshraifa and Z. Sanad

Table 9 Results related to objective 3: To clarify the FinTech advantages and disadvantages
Statements Gender N Mean Std. deviation Std. error mean
How strongly do you agree Male 104 3.86 1.169 0.115
that adding FinTech in the Female 62 4.1 0.936 0.119
accounting curriculum will
enhance your understanding
of accounting concepts?
How strongly do you agree Male 104 3.99 1.11 0.109
that adding FinTech in the Female 62 4.26 0.848 0.108
accounting curriculum will
improve your job prospects in
the accounting profession?
How strongly do you agree Male 104 3.94 1.113 0.109
that adding FinTech in the Female 62 4.18 1.017 0.129
accounting curriculum will
make you more competitive in
the job market?
How strongly do you agree Male 104 3.9 1.178 0.116
that adding FinTech in the Female 62 4.05 1.031 0.131
accounting curriculum will
prepare you for the future of
the accounting profession?
How strongly do you agree Male 104 3.98 1.149 0.113
that adding FinTech in the Female 62 4.02 1 0.127
accounting curriculum will
improve your critical thinking
and problem-solving skills?
How strongly do you agree Male 104 2.82 1.399 0.137
that adding FinTech in the Female 62 3.26 1.366 0.174
accounting curriculum may
lead to a decrease in the focus
on fundamental accounting
principles and concepts?
How strongly do you agree Male 104 2.69 1.337 0.131
that adding FinTech in the Female 62 3.29 1.395 0.177
accounting curriculum may
lead to a decrease in the
importance of traditional
accounting skills such as
bookkeeping?
(continued)
FinTech Education: An Exploratory Study from the Point View … 165

Table 9 (continued)
Statements Gender N Mean Std. deviation Std. error mean
How strongly do you agree Male 104 2.86 1.41 0.138
that adding FinTech in the Female 62 3.4 1.408 0.179
accounting curriculum may
lead to a reliance on
technology that could make
accounting students less
independent and analytical?
How strongly do you agree Male 104 2.87 1.351 0.133
that adding FinTech in the Female 62 3.15 1.353 0.172
accounting curriculum may
make the curriculum more
complex and difficult for some
students to understand?
How strongly do you agree Male 104 2.88 1.375 0.135
that adding FinTech in the Female 62 3.24 1.399 0.178
accounting curriculum may
lead to a shift in the focus of
the curriculum away from
practical accounting skills
towards technical skills?
Average 3.54
Male Average 3.38
Female Average 3.70

The potential benefits of incorporating FinTech into the accounting curriculum

were highlighted by participants. They agreed that it would increase their comprehen-
sion of accounting principles, their employment prospects in the accounting profes-
sion, and their competitiveness in the labor market. Furthermore, participants stated
that incorporating FinTech will better prepare them for the future of the accounting
profession and improve their critical thinking and problem-solving abilities.
Participants were also aware of certain possible drawbacks. They voiced worry
that incorporating FinTech into the curriculum will reduce the emphasis on core
accounting principles and ideas, as well as the relevance of conventional accounting
skills such as bookkeeping. Participants also noted the potential that accounting
students’ reliance on technology will make them less autonomous and analytical.
They were also concerned that the curriculum would grow more complicated and
harder for certain students to comprehend, and that there would be a shift away from
practical accounting skills and toward technical abilities.
Participants recognized the benefits of incorporating FinTech into the accounting
curriculum, but they also noted the possible hurdles and trade-offs that must be
evaluated. These findings give important insights into male and female students’
perspectives of the influence of FinTech integration in the accounting education
setting.
166 H. Alshraifa and Z. Sanad

5 Conclusion

FinTech is revolutionizing the financial industry and has become a crucial component
of modern-day finance. It offers innovative solutions that enable users to conduct
financial transactions in a more efficient, secure, and convenient way. The impact of
this technology on accounting education is significant, as it provides students with
an opportunity to learn about the latest developments in the industry and enhances
their understanding of financial concepts and practices [31].
The objectives of this research were to measure the level of FinTech awareness
among undergraduate accounting students, explore students’ acceptance in including
more FinTech material in their curriculum in the future, and clarify the advantages
and disadvantages of FinTech in the Kingdom of Bahrain. To achieve these objectives,
a questionnaire was sent to 166 business students through social media. The results
of the study showed that there is a significant level of FinTech awareness among
accounting students in Bahrain. However, there is a need for more FinTech-related
material to be included in the curriculum to further enhance students’ knowledge
and understanding. Also, the results indicated a positive response from the partic-
ipants towards including FinTech in the Accounting curriculum. In addition, the
participants were not satisfied with the amount of FinTech material covered in their
accounting courses, as the average score for this question is the lowest among all
questions. Furthermore, the results were indicating a moderate level of confidence
and familiarity among the participants regarding FinTech.
The results showed a high level of acceptance among the participants towards
including more FinTech material in their accounting curriculum. Also, the partici-
pants strongly believe that knowledge and understanding of FinTech will be beneficial
for their future career prospects and that the inclusion of FinTech in the Accounting
curriculum will prepare them for the future demands of the accounting industry. The
results showed a positive response from the participants towards the advantages of
including FinTech in the Accounting curriculum. Adding to that, the participants are
somewhat concerned that the inclusion of FinTech in the Accounting curriculum may
lead to a decrease in the focus on fundamental accounting principles and concepts
and the importance of traditional accounting skills such as bookkeeping.
This study highlighted the importance of incorporating FinTech into Accounting
education. It provided a roadmap for educators and policymakers to create effective
strategies that can help students better prepare for the future of finance. The research
also sheds light on the advantages and disadvantages of FinTech, which can guide
businesses and organizations to make informed decisions about adopting FinTech
solutions.
Based on the results of the study, it is recommended that the impact of FinTech
on the field of education, particularly in the accounting curriculum, continue to be
investigated by researchers. It is evident from the data that there is a significant level
of interest and acceptance among undergraduate business students in including more
FinTech material in their coursework.
FinTech Education: An Exploratory Study from the Point View … 167

Furthermore, in the future, the best practices for integrating FinTech into the
Accounting curriculum, as well as the potential challenges and limitations that may
arise from this integration, could be explored by researchers. The perspectives of
accounting educators and industry professionals could also be investigated to gain
a more comprehensive understanding of the potential benefits and drawbacks of
including FinTech in the Accounting curriculum.
It is also recommended that a research study be conducted to explore the level
of knowledge and understanding of FinTech among Accounting educators. This
can help to identify any knowledge gaps that may exist and provide insights on
how educators can better incorporate FinTech into their teaching. By increasing the
knowledge of educators, students can benefit from a more and up-to-date curriculum
that prepares them for the changing landscape of the accounting industry. Lastly, as
FinTech continues to evolve and expand, it is suggested that researchers regularly
revisit and update their findings to ensure that their recommendations remain relevant
and useful for educators and students in the field of accounting.

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Metrics-Based Exploration
and Assessment of Classification
and Association Rule Mining Techniques:
A Comprehensive Study

Nouh Alhindawi

Abstract Typically, text mining techniques are essential for gleaning insightful
information and knowledge from massive amounts of textual data. The effective-
ness and performance of significant text mining techniques, text classification and
association rule mining are proposed in this paper through a comparative accu-
racy using different dataset. The traditional algorithms K-nearest Neighbor KNN,
Support Vector Machine SVM, and Decision Trees performance were evaluated in
terms of accuracy. We evaluated the benefits and drawbacks of various methodolo-
gies and emphasize how well they may be applied to actual text mining applications.
Following association rule mining, we explored association classification, which
combines the two. We contrast two approaches, Classification Based on Association
Rule (CBA), Multi-class Association Rule (MCAR) with traditional classification
algorithms in terms of accuracy and performance. In the framework of text mining,
we also investigated association rule mining methods. Moreover, we evaluated how
well association rule mining algorithms identify pertinent patterns from text data.
We assessed important metrics, including support, confidence, and specificity, to
determine the effectiveness and importance of the identified rules.

Keywords Text mining · Text classification · Association classification ·

Association rule mining · Evaluation metrics

1 Introduction

Text classification, sometimes referred to as text categorization, involves catego-

rization or labeling texts according to predetermined categories or labels based on
their content [1–4]. We can assess the precision, recall, F1-score, and accuracy

N. Alhindawi (B)
Faculty of Sciences and Information Technology, Jadara University, Irbid, Jordan
e-mail: [email protected]; [email protected]
School of Computing and Augmented Intelligence, Arizona State University, Tempe, USA

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 171
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_13
172 N. Alhindawi

of various text categorization algorithms or techniques in in many different ways

include conducting comparison studies and surveys [5]. Moreover, we can contrast
these methods’ scalability and computing effectiveness when used on sizable text
datasets.
In general, the association rule mining, as an unsupervised data mining tech-
nique, mainly used to identify interesting relationships or associations among items
or attributes within a dataset [6–10]. It achieves this by looking for regular item
sets, which are amalgamations of items that arise together frequently in the dataset.
These frequent item sets aid as the foundation for deriving association rules, which
provide insights into the probability of confident items co-occurring. Characteristi-
cally, association rule mining is applied in market basket analysis scenarios, where
the objective is to reveal relationships between items frequently purchased together.
Although association rule mining can be utilized with textual data, its primary focus
lies in identifying patterns and associations among items rather than classifying
documents into specific categories [11–14].
Table 1 shows the main important differences between AC and association rule
mining, where the former involves prediction of a single class attribute, and the latter
involves just description of associations between items. A fundamental distinction
between AC and association rules is that overfitting prevention is essential in the
former, but not in the latter since classification involves using the discovered set of
rules for predicting the classes of new data objects. Overfitting often occurs when
the discovered rules perform well on the training data and badly on the test data.
This can be due to several reasons such as a small amount of training data objects or
noise.
In this paper, we explored the effectiveness and performance of different tech-
niques, including text classification, association classification, and association rule
mining, furthermore, we briefed about how to interpret and use association rules in
text mining applications.

Table 1 The differences between AC and association rules mining

Feature Text classification Association classification
Goal Assign predefined labels to text Discover patterns and
documents relationships among variables
Supervised or unsupervised Supervised Unsupervised
learning
Labeled training data Required Not required
Common algorithms Naive Bayes, Support Vector Apriori and FP-Growth
Machines (SVM), and deep
learning models
Applications Sentiment analysis, spam Market basket analysis and
detection, topic classification, recommendation systems
and language identification
Metrics-Based Exploration and Assessment of Classification … 173

2 Text Classification

There are a variety of Text Classification (TC) approaches used in the fields of data
mining and machine learning. Decision Trees [3], Support Vector Machine [4] and
Nave Bayes [5] are a few of these methods. The TC techniques in this study will be
discussed in the following subsections.

2.1 K-Nearest Neighbor

The statistical classification method known as the K-Nearest Neighbor (KNN) [5]
algorithm has been thoroughly investigated for prototype detection. When compared
to other statistical methods like Bayesian-based networks, it has successfully been
used to text categorization (TC) difficulties and showed promising results [11].
The KNN algorithm is a straightforward technique. Finding the K-nearest neigh-
bors among the training documents in a particular scenario with training and testing
documents allows for the determination of the test document’s category by using
the categories of these neighbors [15]. The weights for the categories of the nearby
document are determined by the assessment ratings of each neighboring document
in relation to the test document. If more than one K-nearest neighbor belongs to
the same category, the weights for that category are added up, giving the test docu-
ment’s category a weighted probability score. A ranked list of categories for the test
document is created by sorting the scores.
In traditional KNN, the value of K is predetermined. However, if K is too large,
it can lead to the domination of larger classes over smaller ones. To address this
issue, techniques such as adaptive KNN or instance-based learning methods can be
used to dynamically adjust the value of K based on the characteristics of the data.
There are other considerations and challenges in KNN, like calculating similarity
and distance metrics, dealing with computational complexity, and addressing dimen-
sionality reduction and feature selection. These aspects are important for enhancing
the KNN algorithm’s practical efficacy and efficiency. KNN is a straightforward but
efficient method for classifying texts. It considers the categories of neighboring docu-
ments to determine the category of a test document. The choice of K and addressing
various challenges play a crucial role in the performance and applicability of the
KNN algorithm.

2.2 Decision Trees

The C4.5 algorithms [3] utilizes information gain to compute the best attribute for
splitting the data. By maximizing information gain, the algorithm aims to create
decision trees that effectively classify examples based on their attributes.
174 N. Alhindawi

In studies conducted by [3] C4.5 and other text classification (TC) methods were
applied to different datasets. The findings demonstrated that the C4.5 strategy gave
results that were competitive with those of other techniques like K-nearest Neighbor
(KNN), Support Vector Machines (SVM), and Rocchio.
In summary, the C4.5 algorithm is a popular decision tree learning method for
text classification. It selects the best attribute based on information gain to construct
a decision tree that effectively separates training examples according to their class
labels. The algorithm has been shown to achieve competitive results when compared
to other TC methods like KNN, SVM, and Rocchio.

2.3 Support Vector Machine

Vapnik developed the supervised machine learning method known as the Support
Vector Machine (SVM) [15]. It is frequently employed for classification jobs and is
based on the idea of structural risk minimization.
SVM develops a hyperplane in linear classification that divides the data into two
sets with the greatest possible margin. The hyperplane with the largest margin makes
sure that the distances between the points on either side of the hyperplane are equal.
Mathematically, SVM learns the sign function f(x) = sign(wx + b), where w is a
weighted vector in n-dimensional space.
SVMs find the hyperplane y = wx + b by separating the n-dimensional space
into two half-spaces with the maximum margin. Linear SVMs can be extended to
handle non-linear problems by mapping the data into a higher-dimensional space and
performing the linear SVM algorithm in that space. This is done using techniques
such as the kernel trick [4].
SVM has been successfully applied to text classification tasks and has shown
improved accuracy compared to other machine learning techniques such as Naive
Bayes, decision trees, and K-nearest Neighbors. SVMs are particularly effective for
high-dimensional classification problems.
However, there are two main issues associated with SVM. Firstly, SVM is initially
designed for binary classification problems. If a multiple classification problem is
given, it needs to be decomposed into multiple binary classification problems using
SVM. Secondly, the representation of documents as numerical vectors often leads
to a sparse distribution. This means that the training examples frequently contain
many zero values, and the inner products of the input vectors can be computationally
intensive.
SVM is a powerful supervised machine learning technique used for classifica-
tion tasks. It creates a hyperplane to separate data points and can handle non-linear
problems using kernel functions. SVMs have been successfully applied to text clas-
sification and can achieve high accuracy. However, challenges include adapting
SVM for multi-class classification and dealing with sparse distributions in the data
representation.
Metrics-Based Exploration and Assessment of Classification … 175

3 Association Classification

Data mining’s association and classification tasks are combined in association classi-
fication (AC) [15]. It includes the building of a categorization model and the genera-
tion of association rules. The AC method uses an association rule mining technique to
generate rules that adhere to user-specified constraints. Pruning processes are used to
limit the number of rules because a lot of them might be developed and are redundant
or non-discriminatory.
The remaining rules form a model (classifier) that is used to classify new data.
Each classifier may also have a defaulting rule for cases where no other rules apply.
Frequent rule items, which satisfy the minimum support threshold, are identified
during the association rule mining process [16]. These frequent item sets, consisting
of single attribute values, are known as frequent 1-item sets.
Liu proposes one of the earliest algorithms that integrate classification with asso-
ciation principles [17, 18]. It comprises two basic stages: the first stage uses the
Apriori algorithm [6] to find common rule items, and the second stage involves
creating the classifier. According to experimental findings, this strategy generates
rules that are competitive with those produced by well-liked learning techniques like
decision trees.
Combining classification and association rule mining has been found to result
in efficient and accurate classification systems. According to empirical research,
AC can create categorization systems that are more precise than those made using
more conventional methods. Additionally, AC generates IF–THEN rules that, in
contrast to neural networks and probabilistic techniques, are simple for end users to
comprehend and apply [8]. However, most AC algorithms have been evaluated on
classic classification benchmarks, and their effectiveness and efficiency on large and
complex datasets, such as text classification, are yet to be extensively studied.
In summary, AC integrates association rule mining and classification to create
accurate and understandable classification systems. It has shown promise in
producing competitive rules and is particularly useful for end-users who prefer
comprehensible and controllable models [8, 19]. However, further research is
needed to evaluate its effectiveness on large and unstructured datasets, such as text
classification.

3.1 Classification Based on Association Rule (CBA)

The Classification Based on Association Rule (CBA) [17], can be defined as a method
that utilizes association rules for classification tasks. It applies the Apriori algorithm
to discover frequent rule items, which are (<attribute value> , class) pairs that exceed
a minimum support threshold. These frequent rule items are then used to generate
a complete set of Classification Association Rules (CARs) that form the classifier
[10, 20].
176 N. Alhindawi

The candidate generation stage in CBA involves searching for frequent 1-rule
items and combining disjoint frequent 1-rule items to create candidate 2-rule items.
Iteratively repeating this technique continues until no more frequent rule items can
be discovered. A notable distinction is that CBA concentrates on a particular subset
of association rules where the right-hand side is limited to the class attribute. CARs
are the form’s rules A → ci, where A is an attribute value and ci is a possible class.
All generated CARs are ranked during the CBA’s classifier development stage,
and a subset of rules is then chosen to create the classifier. If a rule correctly applies
to at least one training data case, it is added to the classifier, and the covered cases
are subtracted from the training data. The cycle repeats until all candidate rules have
been applied or all training data cases have been covered. The majority class among
any cases that are still unclassified is chosen as the default class.
However, CBA has some limitations. It uses only a single minimum support
threshold for rule generation, which may not be suitable for datasets with unbalanced
class distribution. Additionally, A combinatorial explosion might occur as a result of
the production of many classification rules. Even though such rules may be crucial for
accurate categorization in some circumstances, the rule generator might not always
be able to produce them.
CBA is a classification method that leverages association rules. It discovers
frequent rule items using the Apriori algorithm and generates CARs to build the
classifier. However, it has limitations related to the selection of a single minimum
support threshold and the potential explosion of rule combinations.

3.2 Multi-Class Classification Based on Association Rule

(MCAR)

To preserve rules with high certainty for prediction, the Multi-class Classification
based on Association rule (MCAR) method proposed in relies on rule ranking [8].
The two primary phases of MCAR are rule production and classifier construction.
The training dataset is combed through in the rule development stage to find
frequently occurring one-rule items. These rule items are combined by MCAR to
produce candidate rule items with more qualities. Any rule item that has confidence
and support values higher than the user-defined minimums (minconf and minsupp)
is formed as a candidate rule [21].
Based on the resulting rules’ performance on the training dataset, a classifier is
constructed during the classifier building stage. The classifier only keeps rules that
cover a specific number of training examples. Real and integer data types are also
supported by MCAR. Through dataset scanning, frequent 1-rule items are identified,
and their occurrences (rowIds) are indexed in a vertical format array. Additionally,
indexed in an array are class labels and their frequency values. Rule items that fall
short of the support requirement are eliminated.
Metrics-Based Exploration and Assessment of Classification … 177

By appending disjunct frequent item sets of size k − 1 and intersecting their

rowIds, MCAR employs a function to locate frequent rule items of size k. The
frequency of rule items is counted by intersecting the rowIds of two item sets, which
gives a set containing the rowIds where both item sets occur together in the training
data. This set, along with the class array, is used to count the support and self-
confidence of the new rule item resulting from the intersection [9]. The production
function is iteratively increased for each set of frequent item sets produced at iteration
K to generate probable frequent rule items at iteration K + 1.
Due to the potentially high number of rules created by association classification
(AC), choosing an appropriate rule set is crucial. By taking into account the class
distribution frequencies in the training data and giving precedence to rules associated
with dominant classes, MCAR improves on earlier approaches to rule ranking. The
rule ranking in MCAR is based on the cardinality of the rule’s antecedent, support,
confidence, and the class distribution frequencies [22].
Overall, MCAR addresses multi-class classification using association rules. It
introduces a rule ranking scheme that incorporates class distribution frequencies and
aims to select rules associated with dominant classes for improved classification
performance [23].

4 Rule Discover Classification

This section outlines the two methods Apriori and Frequent Pattern Growth—that
are used to discover items using association rules.

4.1 Apriori

Agrawal and Srikant devised the Apriori approach to find common item sets in a
dataset [6]. It is predicated on the idea of prior familiarity with common item sets.
The algorithm does a complete scan of the training data for each iteration in order to
create new candidate item sets from the frequent item sets discovered in the previous
step.
The Apriori algorithm utilizes the “downward-closure” property, which helps
enhance the efficiency of the search process by minimize the size of the candidate
item set list at each iteration.
Algorithms like [17] implement the Apriori algorithm for discovering frequent
rule items, a step known as candidate generation. These frequent rule items are
represented as (<attributes, values>, class) and must satisfy a minimum support
threshold (minsupp). The frequent rule items are then used to generate a complete set
of classification association rules (CARs), which are used to construct the classifier.
178 N. Alhindawi

Overall, the Apriori algorithm, along with its implementations such as CBA and
CAN, plays a crucial role in discovering frequent item sets and association rules,
which are essential for classification and pattern mining tasks.

4.2 Frequent Pattern Growth

Frequent Pattern Growth (FP-growth) is an association rule mining approach intro-

duced by [24] as an alternative to Apriori-like techniques. FP-growth aims to address
the computational inefficiencies and memory requirements associated with candidate
generation in traditional approaches.
The Frequent Pattern Tree (FP-tree), a highly compressed data structure, is created
as the transactional database’s representation in FP-growth. Each transaction in the
FP-tree is represented by a single path, and the length of the path reflects how many
frequent items are included in the transaction. This concise form enables effective
mining of common item collections.
The FP-growth algorithm only needs to scan the database twice. Frequent item
sets and their supporting data are discovered in the first scan, and the FP-tree is built
in the second scan. When there are numerous shared items between transactions,
the FP-tree captures all frequent item sets that were present in the original database
[24, 25].
Using FP-growth, a pattern growth method is used to mine association rules.
Frequent patterns that co-occur with the chosen pattern are created and stored in a
conditional FP-tree, starting with patterns of length one in the FP-tree. Concatenating
the pattern with the results from the conditional FP-tree is the next step in the mining
process. FP-growth does not involve the development of candidate rules, unlike
[26, 27].
One of the advantages of FP-growth is that it does not require fitting the
entire database into main memory, making it suitable for mining large-dimensional
databases.
Overall, FP-growth offers an efficient and memory-friendly approach to asso-
ciation rule mining by utilizing the FP-tree data structure and pattern growth
technique.

5 UCI Data Set Experimental and Results

In this section, a comparison is made between association classification algorithms

and other classification algorithms in terms of classification accuracy. The compar-
ison includes fifteen different UCI datasets [24], and the algorithms tested are
RIPPER, C4.5, CBA, and MCAR.
These algorithms were chosen because of their various rule discovery training
methods. Divide and conquer is used by C4.5, heuristic-based strategies are used by
Metrics-Based Exploration and Assessment of Classification … 179

RIPPER, and CuA (Classification based on Association rule) algorithms are used by
CBA and MCAR.
The purpose of this comparison is to evaluate how association classification algo-
rithms perform compared to traditional classification algorithms. By using different
datasets and algorithms with diverse training strategies, a comprehensive assessment
can be made regarding the classification accuracy generated by each algorithm.
In this paper, we utilize various classification benchmarks obtained from the UCI
data repository, as shown in Table 2. These datasets are diverse in terms of the
number of attributes and sizes. The association classification algorithms used in
the experiments have specific parameters that need to be set. In this case, the main
parameters, MinSupp (minimum support) and MinConf (minimum confidence), were
set to 2% and 50% respectively. These parameters determine the minimum threshold
for support and confidence that a rule must meet in order to be considered significant.
By applying these classification algorithms to different datasets with varying char-
acteristics and using consistent parameter settings, the experiments aim to provide
a fair and comprehensive evaluation of the algorithms’ performance. The chosen
parameter values ensure a balance between capturing relevant rules and avoiding
overfitting.
The predictive accuracies of different algorithms, including CBA, MCAR, C4.5,
and RIPPER, were calculated using 15 different UCI datasets and presented in
Table 3. The results demonstrate that both CBA and MCAR, which are association-
based (CuA) algorithms, consistently outperformed the decision tree (C4.5) and rule
induction (RIPPER) classification approaches in terms of classification accuracy.

Table 2 The UCI data sets

# Data set Size Number of classes
description
1 Austra 690 2
2 Balance-cale 625 3
3 Breast 699 2
4 Cleve 303 2
5 Glass 214 7
6 Heart-s 294 2
7 Iris 150 3
8 Labor 57 2
9 Led7 3200 10
10 Lymph 148 4
11 Mushroom 8124 2
12 Pima 768 2
13 Primary-tumor 339 23
14 Vote 435 2
15 Wined 178 3
16 Weather 14 2
180 N. Alhindawi

Table 3 The predictive accuracy of the considered algorithms on UCI data sets
# Data set RIPPER C4.5 CBA MCAR
1 Austra 85.21 86.41 85.36 86.41
2 Balance-scale 74.56 64.94 68.18 76.96
3 Breast 95.42 94.59 94.68 94.99
4 Cleve 77.55 77.28 83.13 81.84
5 Glass 68.69 77.59 69.86 71.35
6 Heart-s 78.23 79.09 71.2 81.15
7 Iris 94.66 93.67 93.25 92.93
8 Labor 77.19 85.03 94.99 83.50
9 Led7 69.53 73.39 72.39 71.83
10 Lymph 77.02 81.96 74.43 78.10
11 Mushroom 99.90 99.80 98.92 99.60
12 Pima 73.30 77.66 75.49 77.12
13 Vote 88.27 87. 84 87.39 88.20
14 Wine 94.38 93.21 98.33 95.73
15 Weather 64.3 71.4 85.0 84.1

Specifically, CBA and MCAR achieved higher accuracy in seven datasets

compared to C4.5 and achieved better accuracy in nine datasets compared to RIPPER.
However, it should be noted that the traditional classification algorithms (C4.5 and
RIPPER) achieved slightly better predictive accuracy than the association-based
algorithms (CBA and MCAR) in some datasets.
Overall, the results indicate that the association-based classification algorithms
(CBA and MCAR) generally perform well and yield higher accuracy compared to
decision tree and rule induction approaches. However, the traditional classification
algorithms still show competitive performance in certain datasets.
The describes results of a comparison of the prediction accuracy of MCAR,
RIPPER, C4.5, and CBA algorithms across different datasets. The results show that
MCAR performed better than RIPPER in ten datasets, while RIPPER performed
better in four datasets. Similarly, MCAR performed better than C4.5 in six datasets,
while C4.5 performed better in seven datasets. The comparison between CBA
and RIPPER showed that CBA performed better in seven datasets, while RIPPER
performed better in six datasets. Finally, the comparison between CBA and C4.5
showed that CBA performed better in five datasets, while C4.5 performed better in
nine datasets. Overall, the results suggest that the performance of the algorithms
varied across different datasets, and there is no single algorithm that is optimal for
all classification tasks.
Figure 1 describe the results of a comparison of the prediction accuracy of MCAR,
RIPPER, C4.5, and CBA algorithms across different datasets. The results show that
MCAR performed better than RIPPER in ten datasets, while RIPPER performed
better in four datasets. Similarly, MCAR performed better than C4.5 in six datasets,
Metrics-Based Exploration and Assessment of Classification … 181

120

100

80

60

40

20

RIPPER C4.5 CBA MCAR

Fig. 1 The predictive accuracy of the considered algorithms on UCI data sets

while C4.5 performed better in seven datasets. The comparison between CBA
and RIPPER showed that CBA performed better in seven datasets, while RIPPER
performed better in six datasets. Finally, the comparison between CBA and C4.5
showed that CBA performed better in five datasets, while C4.5 performed better in
nine datasets [12, 13, 28–33]. Overall, the results suggest that the performance of the
algorithms varied across different datasets, and there is no single algorithm that is
optimal for all classification tasks. More investigations and evaluation matrices need
to be applied over the existing approaches in order to have full comparison between
the association rule in data mining [21, 27, 34–38].

6 Conclusion and Future Work

In this paper, a comparative study presented which studied the text classification
as well as the association rule mining. As mentioned before, text classification is
concerned with categorizing documents and finding the predictive classes based on
their content, while association rule mining focuses on discovering associations and
patterns among items in a dataset based on the co-occurring regardless of document
classification. Both techniques have their own applications and play important roles in
analyzing textual data, providing valuable insights and supporting decision-making
in different domains. Furthermore, the main differences between text classification
and association rule mining is crucial for selecting the appropriate technique based
on the specific goals and requirements of techniques with different strengths and
applications. The main differences regarding the accuracy are extremely explained
in Sect. 5.
182 N. Alhindawi

Text classification support the process of classifying document or linking any

predictable category using the existing contents. It helps in distributing pattern’s
labels over any text automatically using the features exist in the text using direct or
indirect relationships. Mainly, the process of text classification is used for enhancing
the process of understanding large repositories of data scattered in different unrelated
texts and classes. Where association rule mining has different way of categorizing, in
other word, it reveals the relation between similar categories or texts based on discov-
ering the frequent co-occurring of text or items. This helps in commercial business
and recently it was utilized for investment prediction. As mentioned before, the text
classification and association rule mining has different goals and usage, however,
many research were conducted using both of them as predictors approach as well
as for text categorizations. Therefore, conducting more research to distinguish the
main differences will definitely help in utilizing each of them by using it in the most
suitable domain. That means, each environment and domain has different attributes
which need different approaches and different processing steps. As a future work,
a hybrid model for using both technique in finding the patterns and the prediction
process will be utilized and over larger data set.

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Do Green Human Resource Practices
Affect Firm’s Performance: The Case
of the Telecommunication Companies
in Bahrain
Abdullah Hamza Al-Hadrami, Muhammad Rizky Prima Sakti,
and Faisal Mohamed AlKhalifa

Abstract Green human resources management has a most important effect on

employees as it reinforces and upsurges their performance. Because of limited but
inconsistent findings from previous studies, it is apparent that more studies are needed
to examine green human resource practices in organizations. Therefore, it is important
to examine how green human resources practices influences business performance
in telecommunication companies in Bahrain. Particularly, the study investigates the
impacts of green recruitment and selection, green training and development, and
green reward and compensation toward the performance of the telecommunication
companies working in Bahrain (STC, Batelco and Zain). The data have been collected
using a structured questionnaire from 203 employees from the three companies. The
findings indicate that the recruitment and selection, training and development, and
reward and compensation have a positive and significant influence on firm’s perfor-
mance. This indicates that every positive development and improvement of human
resource green competencies will lead to a positive development and improvement
in firm’s performance.

Keywords Green human resources management · Firm’s performance · Bahrain

A. H. Al-Hadrami (B)
Business Division, Higher Colleges of Technology, Fujairah, UAE
e-mail: [email protected]
M. R. P. Sakti
Department of Business AdministrationUniversity College of Bahrain, Saar, Bahrain
e-mail: [email protected]
F. M. AlKhalifa
Bahrain Defence Force, Manama, Bahrain

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 185
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_14
186 A. H. Al-Hadrami et al.

1 Introduction

Green human resource management (GHRM) refers to the implementation of

environmentally-friendly activities in personnel management. This is crucial in
achieving sustainability in business management. In order to focus on the envi-
ronmental aspect of sustainability, businesses must adopt a culture that prioritizes
green practices. This involves changing the values, attitudes, and behaviors of all
employees. Implementing green HRM practices is crucial in driving employees to
adopt environmentally-friendly behaviors and attitudes, which ultimately contributes
to the desired environmental performance [14]. The development and realization of
sustainable solutions will be made possible by greater emphasis on novelty to meet
significant environmental challenges [9]. As stated by [7], there was a time when
environmental teams were largely ignored, but now many huge organizations widely
accept them, and as a result, numerous firms are using these green teams to manage
change.
GHRM has an important role on employees as it reinforces and increases
their performance. Employees are viewed as the firm’s human capital; that’s why
enhancing their knowledge and skills is the most effective way to achieve a firm’s
success and distinction. Developing employees’ skills is a key issue that supports
them and prepares them to confront all challenges within the market as well as the
workplace [1]. Furthermore, firm leaders are doing their best to enhance perfor-
mance within all firms. Countless measures of performance have been developed
by scholars and experts, such as profitability, maximizing shareholder wealth, sales
revenues, and market shares. Leadership plays an undeniable impact in achieving
the company’s goals and objectives [10].
A bulk of the literature shows mixed results on how GHRM and its practices
impact performance. Previous works have shown that the use of HRM practices
enhances efficiency, but they have also shown that these techniques have drawbacks
on efficiency. Some studies did not find any affiliation, while others indicated an
assorted rapport. Participation in organizational change may be affected by GHRM
practices, and for that reason, performance may be impacted [9]. Some studies
have shown that green human resources management can significantly improve the
organization’s financial performance. [4, 22, 27]. The vital interceding function of
organizational citizenship behavior (OCB) towards the environment lies in its link
between corporate social responsibility (CSR) and GHRM practices, as it appears.
This implies that OCB towards the environment holds substantial influence over
sustainable performance [18].
A methodological challenge that has also contributed to the debate over GHRM
activities and performance may be the reason behind the inconsistent findings of
these studies as well. Hence, this study contributes to this emerging argument, which
argues that there is an association between GHRM activities and firm performance.
Due to the limited and inconsistent findings from previous studies, it is apparent that
more studies are needed to examine green human resource practices in organizations.
Therefore, it is important to examine how green human resources practices influence
Do Green Human Resource Practices Affect Firm’s Performance: The … 187

business performance in telecommunication companies in Bahrain. This study is

significant since the outcomes will add values to the body of knowledge in the field
of GHRM practices and telecommunication companies’ performance in the Kingdom
of Bahrain. Therefore, the current study aims to interrogate the GHRM practices in
terms of different practices and test their effect on firm performance.

2 Theoretical Framework, Literature Review

and Hypotheses Development

This research looks at the connection between GHRM and firm performance prac-
tices from an instrumental perspective. This indicates that the study views GHRM
as a tool for assisting in achieving organizational objectives, generally, and finan-
cial performance, in particular. In order to investigate this relationship, the conven-
tional Ability–Motivation–Opportunity (AMO) theory given by [5] is applied. This
theory states that HRM practices can improve human capital, leading to positive
results such as increased productivity, reduced waste, quality, and profitability. The
AMO theory suggests that HRM achieves those results by the way of attracting and
enhancing talent employees, increasing motivation and commitment through early
promotion and improved performance management, and create opportunities for
employee autonomy to promote knowledge sharing and problem-solving activities
through employee engagement processes [5, 11].
Sustainable HRM promotes environmental sustainability within business organi-
zations through HRM strategies that endorse the utilization of ecological resources
within the organization [15]. Using green products and techniques would minimize
pollution and deplete natural resources, thereby reducing environmental impact [24].
By ensuring the implementation of GHRM practices, organizations could achieve
the financial goals by implementing ecological marketing, as well as protecting the
environment from the effects of any negative actions or decisions they take [2].
Environmental sustainability is a priority in organizations. Therefore, integrating
environmental aspect into GHRM is paramount [6]. According to Arulrajah et al. [6],
a GHRM practices program is the set of practices, strategies, and schemes adopted by
a firm to make its employees environmentally friendly in the context of individuals,
businesses, and the natural environment. For organizations to achieve effective
eco-performance, HRM practices are required to preserve the systems inside
the company. GHRM has been the subject of many studies because it enhances
managerial operations and competitiveness, as well as encouraging the human
capital [25].
Research on the outcomes of organizations has indicated an association between
HRM practices and efficiency, flexibility, as well as financial performance. Yet, there
has been little attention paid to establishing any connection between these conse-
quences and ecological management initiatives [12]. Karolak et al. [20] said that envi-
ronmental management should be incorporated into human resource management
188 A. H. Al-Hadrami et al.

practices, largely because it is essential and not merely a desirable concept. In order
to successfully manage the environment in an organization, human resources must
play a significant role [10]. Organizations’ performance of environmental manage-
ment systems must be supported by human resource practices that facilitate execution
[22]. Human resource practices aligned with environmental management objectives
can lead to proficient achievement of desired goals or an environmental management
expedition within the organization [19]. According to a study by Guerci and Pedrini
[16], human resource practices are a major factor in executing green practices and
contribute to achieving green goals. Ansari et al. [4] examined how GHRM and
eco-innovation affect a company’s performance. The outputs show that GHRM has a
crucial role in a company’s financial performance through eco-innovation. Similarly,
Renwick et al. [27] found that GHRM and environmental outcomes can indirectly
affect firm’s performance.

2.1 Green Recruitment and Selection

Green recruitment involves hiring individuals who understand sustainable processes,

environmental systems, and are familiar with words and concepts associated with
environmental protection and creating a sustainable atmosphere. Green recruitment
ensures that all new employees are familiar with green practices and environmental
management systems [8, 21]. It is a paperless recruitment process that uses digital
media, such as an online application form, online interviews, or telephonic interviews.
These practices reduce environmental degradation rates. According to Sharma and
Vashistha [29], an important area of green staffing is hiring eco-friendly employees
both internally and externally. This refers to any recruiting actions demonstrating
the preference companies have for environmentally friendly candidates, and the
green selection focuses on selecting employees committed and knowledgeable about
ecological matters who can contribute to an organization’s ecological supervision.
Ensuring that the new recruits understand ecological principles and standards
can contribute to improving environmental management systems [26]. The previous
discussion suggests that GHRM, in general, has a significant impact on firms’
performance. However, according to the researchers’ knowledge, no studies have
discussed the impact of green recruitment and selection practices on the performance
of Bahraini telecommunication companies. Accordingly, the above discussion leads
us to establish the following research hypothesis:
H1: Green recruitment and selection have a positive and significant influence on the
performance of Bahraini telecommunication companies.
Do Green Human Resource Practices Affect Firm’s Performance: The … 189

2.2 Green Training and Development

Training and development practices focus on enhancing employee skills and knowl-
edge. Environmental training also helps to halt the decline in ecological management
practices and knowledge [26]. Green training is designed to ascertain that staffs have
the insights and attitudes to understand the company’s environmental policies, prac-
tices, and environmental consciousness [29]. Through green training, employees can
learn ways to handle waste, efficiently utilize resources, conserve energy, and reduce
environmental damage. They can also participate in solving environmental problems
[19]. Khan and Zubair [19] added that identifying the value of green training and
development has been done through a multiple case study approach.
Green training and development provide insights pertaining to eco-friendly activ-
ities, the green initiatives, waste reduction, and efficient use of energy. Continuously
training employees on green principles can foster a green culture. It is important
to offer green training and development to stimulate and influence worker behavior
in the direction of practicing green practices. A green training program is designed
to educate participants about ecological performance, waste reduction, energy effi-
ciency, and participation in green activities to improve the environment. Employee
training and development programs should take into account social and environ-
mental aspects, health and safety considerations, and be addressed at both the shop
floor and executive level. Newly promoted employees should be provided with green
orientation programs as part of their training [21, 29].
According to the researchers’ knowledge, limited studies discussed the impact of
green training and development practices on the performance of telecommunication
companies in Bahrain. Therefore, the researchers have formulated the following
hypothesis regarding the relationship between green training and development, and
firm performance:
H2: Green training and development have a positive and significant influence on the
performance of telecommunication companies in Bahrain.

2.3 Green Reward and Compensation

An additional tool to support environmental management activities could be green

compensation and rewards, which may encourage companies to make efforts towards
sustainability [6]. Green rewards offer incentives for workers who demonstrate a
commitment to environmental sustainability [29, 30]. Through rewards, studies have
found that they can encourage employees’ environmentally friendly behavior and
positive attitudes towards the work environment [9, 13, 17]. There are several ways
to reward and incentivize green behavior, such as offering incentives for acquiring
green skills, providing additional monetary compensation (e.g. premiums, cash),
190 A. H. Al-Hadrami et al.

empowering rewards that are non-monetary based (such as leave and gifts), estab-
lishing recognition-based reward systems (such as external roles and daily praise),
imposing sanctions (such as criticisms), and offering rewards for positive feedback
(such as modular rewards).
As part of the human resources management process, compensation and rewards
are key elements. These elements are essential in sustaining an employee’s atten-
tion towards the business. Organizations have reward policies in place to attract,
retain, and encourage employees to ensure the attainment of objectives, as well as to
improve employee loyalty to the organization [9, 10]. The administration of green
compensation has an important role in persuading directors and employees of the
administration-related climate management [20]. Green rewards and compensation
have a crucial role on staff’s satisfaction regarding eco-friendly activities [3]. To the
researchers’ knowledge, no studies have discussed the influence of green reward and
compensation practices on a firm’s performance. Therefore, the researchers formu-
late the following hypothesis regarding the association between green reward and
compensation and a firm’s performance:
H3: Green reward and compensation have a positive and significant influence on the
performance of Bahrain’s telecommunication companies.

Based on aforementioned discussion, a limited efforts exists regarding the relation-

ship between GHRM practices and the performance of telecommunication compa-
nies in the Kingdom of Bahrain. Therefore, this research fills this gap in the literature
and can help policymakers in Bahraini firms consider GHRM in the future. Figure 1
shows the study’s conceptual model which was developed based on theoretical
framework and previous works.

Green Re-
cruitment and
Selection

Firm’s Per-
Green Train-
formance
ing and Devel-
opment

Green Reward
and Compensa-
tion

Fig. 1 Study’s model

Do Green Human Resource Practices Affect Firm’s Performance: The … 191

3 Methodology

3.1 Research Method

The current study aims to examine the impact of GHRM practices on the performance
of Bahraini telecommunication companies. To achieve the research objectives, a
structured questionnaire has been developed with reference to previous studies on
GHRM and was distributed to employees working in the three telecommunication
companies in the Kingdom of Bahrain (STC, Batelco, and Zain). After finalizing the
procedure of distributing the questionnaire, statistical analyses were applied as seen
below.
The study questionnaire includes the following sections: The first section includes
the demographic information about the respondents which are: Gender, Age, Educa-
tional qualification, and Tenure. The second section includes green human resources
practices. This section includes three subsections, namely green recruitment and
selection (7 items), green training and development (10 items), green rewards and
compensation (7 items). Third section includes employees evaluation of their firm’s
performance (6 items).
The constructs for all independent variables were adopted from the previous
studies and measured on 5-points Likert scale ranged from 1 (strongly disagree)
to 5 (strongly agree). The dependent variable (Firm’s performance) was measured
according to [28] that respondents in each telecommunication company compared
their firm’s performance to the other two competitors over 6 dimensions including
sales growth, revenue growth, and customer satisfaction over the past 3 years. Using
5-point scales ranging from ‘much lower’ to ‘much higher. An initial copy of the
study’s instrument was distributed to a number of scholars and experts in the field of
HRM to get their feedback regarding the clarity and appropriateness of the survey
items. Accordingly, amendments were made to the final version of the survey.

3.2 Sample and Data Collection

The study population comprises of the staffs who are working at the three telecom-
munication companies in Bahrain (Batelco, Zain, STC). A convenient sampling tech-
nique was utlilized in this research. A total of 360 questionnaires were distributed
with an average of 120 questionnaires in each firm. Next, a total of 210 question-
naires were returned with a response rate of 58.3%. However, only 203 responses
were valid for data analysis, while the remaining questionnaires were invalid.
To test whether the data is normally distributed or not, the Kolmogorov–Smirnov
test is employed. The results show that the p-value for every construct is more than
the significance level of 0.05, which indicates that the normality of distributed data.
To examine internal consistency or reliability of dataset, the Cronbach’s’ alpha is
applied. The results indicated that the value of Cronbach’s alpha is ranged between
192 A. H. Al-Hadrami et al.

0.756 and 0.824, which is considered an acceptable value. The overall Cronbach’s
alpha for the entire questionnaire is 0.835. This indicates that the full questionnaire
is highly reliable.

4 Results and Discussion

4.1 Demographics Analysis

The current research incorporates four types of demographic variables; gender, age,
educational qualification and tenure. The percentage of males and females were
54.7% and 45.3%, respectively. Regarding age, it has been found that the largest age
group is group 2 (30–39 years) with 40,4% and group 1 (below 30 years) with 25.6%.
With regard to the educational qualification, the largest group is the bachelor
degree holders with 49.8% followed by the master degree holders with 29.1%. Finally,
with regard to work experience (Tenure) the dominant group was group 4 (15 years
or more) with a percentage of 33%, followed by group 3 (10-less than 15 years) with
a percentage of 25.1%.

4.2 Regression Analysis

Table 1 shows the results of the regression analysis on the impact of each of
recruitment and selection (R&S), training and development (T&D), and reward and
compensation (R&C) on firm performance (FB).
According to the model summary, R-square is 0.963. That is, the three indepen-
dent variables account for 96.3% of the variation in firm performance. The ANOVA
analysis summary as shown in Table 2 reveals The regression analysis is highly
significant (F = 28.057, df = (4, 198), p-value < 0.0011), which indicates that the
study model is acceptable. Table 3 displays the regression coefficient of the three
independent factors’ influence on the firm’s performance. The regression formula
uses unstandardized coefficients, with beta values (ß) of regression coefficients of

Table 1 Model summary

Model summary
Model R R square Adjusted R square Std. error of the Change statistics
estimate Sig. F change
1 0.981a 0.963 0.962 0.22641 <0.001
a. Predictors: (Constant), R&S, T&D, and R&C
b. Dependent variable: FP
Do Green Human Resource Practices Affect Firm’s Performance: The … 193

0.457, 0.165, and 0.224. R&S (recruitment and selection), T&D (training and devel-
opment), and R&C (rewards and compensation). As a result, the regression model’s
formula is as follows:

FP = 0.018 + 0.457 R&S + 0.165T&D + 0.224 R&C.

The findings support the study hypotheses (H1, H2, H3), indicating that recruiting
and selection, training and development, and reward and compensation all have a
positive and significant impact on firm performance.
The results are consistent with other studies [8, 21] who state that green choice and
staffing are means of procuring, choosing, and executing new recruits who are sensi-
tive to environmental issues. While green recruitment and selection are important,
organizations should also focus on conveying their environmental qualities and direc-
tion. With regard to green training/development and firm performance, the results
are consistent with [15, 23, 29] who are of the view that training helps enhance ordi-
nary management practices and creates a connotative culture delicate to ecological
administration. These research conclusions are also in line with [13, 22, 31] who
believe that preparing the green leadership of the future through occupation pivots,
a training arrangement that emphasizes the ecological administration principles of
the subjects examined, were health, energy efficiency, fritter away super vision, and

Table 2 ANOVA results

ANOVAa
Model Sum of squares df Mean square F Sig.
1 Regression 262.680 4 65.670 28.057 <0.001b
Residual 10.150 198 0.051
total 272.830 202
a. Dependent variable: FP
b. Predictors: (Constant), R&S, T&D, and R&C

Table 3 Regression coefficients

Coefficientsa
Model Unstandardized Standardized T Sig.
coefficients coefficient
B Std. error Beta
(Constant) 0.018 0.044 0.414 0.679
R&S 0.457 0.043 0.441 10.625 <0.001
T&D 0.165 0.062 0.161 2.679 0.008
R&C 0.224 0.044 0.229 5.067 <0.001
a. Dependent variable: FP
194 A. H. Al-Hadrami et al.

reprocessing, the amount of green legislative body in the workforce, and why they
leave positions in polluter firms [19, 20, 32].
Finally, the findings regarding the relationship between green reward/
compensation and firm performance are consistent with [6, 9, 13, 17, 30] who believe
that encouraging employee behavior in an environmental context and their defiance
toward the work environment ensure that they will continue at work that positively
reflects on the general performance. Therefore, the current findings are relevant and
validate the previous research.

5 Conclusions and Recommendations

5.1 Conclusions

Green HR practices have been found to have a significant positive correlation with
firm performance. This means that any positive development or improvement in
green human resource competencies will result in an associated enhancement in firm
performance. The study results revealed a high percentage of employees in three
telecommunications companies (Batelco, Zain, and STC) located in the Kingdom of
Bahrain who indicated that green recruitment/selection, green training/development,
and green reward/compensation are essential factors in improving firm performance.
From these findings, it can be concluded that management should have a clear
plan for recruiting highly qualified and eco-friendly candidates. This means that
having a clear recruitment plan is the most important element of green recruitment
and selection practices. Additionally, management should motivate employees to
attend courses related to environmental protection practices and the preservation
of natural resources. Furthermore, management should provide bonuses and incen-
tives to employees who demonstrate their ability to adopt green practices in order
to encourage them to continue working in a manner that positively reflects on the
overall performance of the firm.

5.2 Recommendations

5.2.1 Green Recruitment and Selection

According to the study results, it has been found that a high percentage of employees
in the three telecommunications companies located in the Kingdom of Bahrain
(Batelco, Zain, and STC) indicated that environmental awareness is an essential
factor in improving firm performance. It can be concluded that management should
have a clear plan to recruit highly qualified and eco-friendly candidates. This means
that the availability of a clear plan for recruiting is the most important aspect of
Do Green Human Resource Practices Affect Firm’s Performance: The … 195

green recruitment and selection practices. Companies should employ green recruit-
ment and selection criteria, and organizations should focus on conveying their envi-
ronmental values and direction. This can be achieved by reducing waste gener-
ated during the recruitment process, such as paper and gasoline used for travel,
and implementing paperless recruitment methods that use digital media, such as
online application forms, online interviews, or telephonic interviews. These prac-
tices can help reduce environmental degradation. Telecommunication companies
should ensure that new recruits understand ecological principles and standards that
can contribute to improving environmental management systems. Additionally, they
should adopt green interviewing procedures, such as distributing interviews in digital
formats, using digital job advertisements, minimizing the use of paper during inter-
views, and asking questions related to the environment. HRM should prioritize Green
Recruitment & Selection to hire employees with a sense of social responsibility.

5.2.2 Green Training and Development

According to the study results, the employees of the three telecommunication compa-
nies (Batelco, Zain, and STC) in the Kingdom of Bahrain indicated the importance
of this factor for their firm performance. This implies the importance of incentivizing
employees to attend courses related to environmental protection practices and the
preservation of natural resources.
Telecommunication companies should ensure proper ways to handle waste, effi-
ciently utilize resources, conserve energy, and reduce ecological squalor through
green training. Employees can also participate in the process of solving environ-
mental problems. Telecommunication companies should recognize the value of green
training and progress based on practical policies. Telecommunication companies
should prepare the green leadership of the future by providing a training program
that teach workers about environmental management principles related to health,
energy efficiency, waste management, and recycling. This program should encourage
more workers to take up green jobs and help protect the environment while working
towards better environmental management.

5.2.3 Green Reward and Compensation

According to the study results, it has been found that the majority of employees
in the three telecommunication companies in Bahrain (Batelco, Zain, and STC)
indicated that adopting green practices is essential in improving firm performance.
It can be concluded that providing bonuses and incentives to employees who
demonstrate their ability to adopt environmentally friendly practices can encourage
them to continue working, which will have a positive impact on the firm’s perfor-
mance. To this end, telecommunication companies should reward their employees
for participating in green activities and encourage them through the addition of
both monetary and non-monetary rewards and benefits to the compensation and
196 A. H. Al-Hadrami et al.

reward system. Furthermore, telecommunication companies should link incentives

with environmental goals to motivate their staff to work more sustainably. They
should also improve employee satisfaction leading to better business results by
achieving stability through linking recompense and reimbursement to performance
appraisals. In addition, telecommunication companies should review their remuner-
ation schemes as they greatly impact employee performance, and adopt a rewards
system to enhance employee commitment and raise their awareness of environmental
protection. Finally, telecommunication companies should practice their ability to
achieve their natural objectives.

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Data Mining Approaches for Depression
Detection on Social Media Twitter
Dataset

Yasmeen Walid Abuhasirah

Abstract Nowadays, we live in a world where almost everybody has many prob-
lems like discomfort and tensions in their lives, irrespective of age, gender, or
caste, due to race, customs, and rituals. Due to such problems, some people are
struck by inferiority, others take the pressure, and a few become hopeless and try
to destroy themselves. This research will utilize several Data Mining techniques,
such as association mining, classification, and regression, with Machine Learning
algorithms on social media data to extract a user’s mental health state, emphasizing
depression. The study focuses on diagnosing depression among cross-cultural social
media users using association mining of the Data Mining Association and Machine
Learning approaches. The proposed methodology has four significant parts discussed
in detail in the methodology section. It is concluded that depression is a common but
dangerous mental illness. It is a dysfunctional habit that can strike anyone, regard-
less of age, gender, and socioeconomic background. There are numerous intelligent
strategies to spot depression in online life customers. Machine learning algorithms
such as Nave Bayes, LSTM, Decision Tree, Logistic Regression, SVM, and Random
Forest are used to classify depressed and non-depressed tweets. The mining tech-
nique used in this paper is Association Rule Mining; A priori is the best fit to generate
the association rules from the tweets dataset and gives the rules for depressed and
undepressed tweets with the best performance. More mining techniques and other
algorithms could provide more rules and generalization results.

1 Introduction

A frequent but dangerous human health state known as depression is increasing

widely in the world. It is a dysfunctional habit that may affect anybody, regardless
of age, gender, and socioeconomic background. The leading cause of disability and
suicide is depression, with about 5.0% of adults globally. According to the reports,

Y. W. Abuhasirah (B)
Palestine Technical University Kadoorie PTUK, Tulkarm, Palestine
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 199
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_15
200 Y. W. Abuhasirah

women are affected more than that men globally. Depression spread a major impact
on human life, influencing how they perceive themselves and their sleeping and eating
patterns. It is the worst condition of a person’s mind when they are depressed and
loses interest in almost all practical activities; they are also unable to move on from
that state. Depression causes are social, biological, and psychological reasons. Other
bodily problems are also caused by depression. Self-destruction is the most common
cause of mortality among young individuals who are depressed [4] Nonetheless,
most persons suffering from depression do not seek treatment from a doctor. In
the meantime, social media sites like Twitter, Facebook, and Instagram are rapidly
growing and the best data sources to know a depressed person’s state. Nowadays,
individuals rely on social networking apps to discuss their emotions and feelings.
Consequently, the easily available material is helpful for us in analyzing the mental
health of such consumers [5].
Recently, there has been a push to use social media data to detect, estimate, and
track changes in illness incidence. Because of the pervasiveness of social media,
there is a tremendous chance to improve the availability of an extensive volume of
data to mental health practitioners and academics, resulting in the best approach with
better-equipped in the sector of mental healthcare. Furthermore, infectious negative
emotions negatively impact human beings and lead to mental disorders. Depression
is the most frequent mental illness, yet it has gone undetected or untreated due to
its non-recognition or denial. The beginning of severe depression can be avoided by
recognizing its early signs and treating them through appropriate action [6].
The Data Mining techniques [1] such as association mining, classification, and
regression, with Machine Learning algorithms on social media data, lead to extracting
a user’s mental health state with an emphasis on depression [7] Detecting words
that indicate negativity in data is one of the most effective methods for detecting
depression [8]. Detecting words that indicate negativity in data is one of the most
effective methods for detecting depression [8].
Researchers have properly emphasized early detection techniques for depressed
and anxious patients. Meanwhile, the CLEF eRisk 2017 workshop [22] was
conducted to analyze the early detection of depressed patients. The major chal-
lenge was identifying the early risk factors in depressed people. The workshop was
conducted using Reddit open-source dataset.
The customer-created content data was also obtained and applied to the techniques
to get the values of early risk factors to get the optimum gain. The pilot task infor-
mational index covers a customer-made substance made and arranged consecutively.
It considers watching the customer’s progress and perceiving danger as on schedule
as could be permitted. This process gives insight into how the early detection of
depression is essential for any human being.
The mental issue is considered a “disorder portrayed by a clinically noteworthy
aggravation in a person’s discernment, feeling guideline, or conduct that mirrors
brokenness in the mental, natural, or formative procedures basic mental working”
[23]. As indicated by the Canadian Mental Health Association [23], 20% of Cana-
dians having a place with various socioeconomics have encountered dysfunctional
Data Mining Approaches for Depression Detection on Social Media … 201

behaviors during their lifetime, and around 8% of grown-ups have experienced signif-
icant melancholy. World Health Organization measurements indicate that about
20% of kids and young people have encountered psychological maladjustments
and dysfunctional behaviors at age 14. They are also caused by 23% of passing
on the planet because of mental health problems [13]. We utilized the information
discharged for the Computational Linguistics and Clinical Psychology [12].
Psychological wellness keeps on being a noticeable plague for the enlightened
world. One out of four American residents’ experiences and analyzes mental issues at
whatever year is assessed. When joined with the 2015 US Census for Residents 18 and
more seasoned, these insights make an image of 80 million enduring United States
natives. One of every three of these natives who experience the ill effects of a dysfunc-
tional behavior may experience the ill effects of clinical sadness, hence propelling
an abundance of concentrates to handle this issue. Proposed devices that gauge the
danger of an individual being discouraged can be utilized by doctors, concerned
people, and human services offices to help in finding, even perhaps empowering
those experiencing gloom to be progressively proactive about recuperating from
their emotional wellness [11, 27–29].
Using Data Mining techniques to identify depression would undoubtedly assist
social media users in recognizing and forecasting depression risk. Statistical analysis
and Data Mining approaches give insights into the data about depression patients
[10]. It also encourages social media users to get therapy for depression as soon
as possible. Machine Learning methods, such as supervised learning, may evaluate
and create a model using social media posts on Twitter or any other social media.
Many characteristics, such as users’ posts, tweets, responses, post time, emotions,
etc., might help diagnose depression. Depression detection is needed timely, and the
open-source dataset using social media is helpful for the whole process.
People have worked on depression detection in social media users of specific
cultures, races, and countries. Our primary purpose and objective are to trace
depression-affected users early to diagnose and control it. All research uses text-
based data, but we analyze by using both text and emoji as emoji’s play a vital
role and express thoughts, vision, and emotions better than textual data. Our main
objective is to provide a solution for cross-culture depressed users.
We analyze the scientific research productivity and international collaborations
of social media because we do not find any comprehensive study to measure and
identify depression among people using social media. Social media data under data
mining techniques promotes research and international collaboration among people.
Secondly, we introduce a new way to calculate depression in social media users
using textual and emoji data. Our primary purpose is to measure this viral and rapidly
developing disease early to control and overcome the suicidal issue. Every second
number of users sharing data over the internet, including secrets, emotions, frus-
tration, and exploring ideas, even all events and activities are being recorded over
the cloud. Most of the time, we share things over social media which are not being
shared with our closest and physical relations. We have to use this data positively
and diagnose depression early before it grows to the final stages and takes someone’s
202 Y. W. Abuhasirah

life. We use data mining association rules and classification algorithms in machine
learning to calculate this.

1.1 The Research Objectives

The following are the objectives of this research study discussed below, and we
follow to cover all these mentioned using Data Mining approaches on the social
media dataset [9]. Our primary purpose and objective are to trace depression-affected
users at an early stage to diagnose and control it. There is no research found on the
cross or multi-culture-oriented solution for depressed people. Our main objective is
to provide a solution for cross-culture depressed users.
• Research intelligent approaches and their application for depression detection
• Using social media data sets, study depressed users and highlight them from large
data
• Choose the best association and classifier to enhance outcomes for a mature system
• To assess the proportional research effort in Data Mining for depression detection
• To evaluate the relative research effort of the depression detection in data mining
• To provide a solution for cross-culture users using Data Mining approaches.

2 Literature Review

The literature review discussed the existing approaches using data mining and
machine learning for depression detection. A few of them are discussed in detail
to analyze what others did in their approaches and what are the addressed problems.
Shen et al. [24] recommended that depression location is a huge issue for human
prosperity. Inferable from social contrasts, recreating the technique to other web-
based life stages, for example, Chinese Weibo, in any case, may prompt horrible
showing considering deficient accessible named self-announced sorrow information
for model preparation. However, this paper discussed an intriguing, testing issue of
improving recognition in a specific objective space, for example, Weibo, with suffi-
cient Twitter information as the source space. First, examine the downturn-related
element designs crosswise over areas and abridge two significant recognition chal-
lenges, specifically isomerism and divergence. DNN-FATC model used that moves
the important data crosswise over heterogeneous spaces is proposed. Analyses exhibit
improved execution contrasted with existing heterogeneous exchange strategies or
preparing straightforwardly in the objective area (over 3.4% improvement in F1,
the issue of upgrading gloom identification utilizing internet-based life, and using
the dataset from multiple sources. We proposed DNN-FATC algorithm to move the
pertinent data crosswise over heterogeneous spaces. Exploratory outcomes checked
the adequacy of our technique. Later on, we hope to further improve online locations
Data Mining Approaches for Depression Detection on Social Media … 203

by consolidating disconnected investigations and adding to the prosperity of more

individuals.
Shen and Rudzicz [26] expressed that depression is a significant supporter of
the general worldwide weight of ailments. Customarily, specialists analyze discour-
aged individuals up close and personal, alluding to clinical sadness criteria. Over
70% of the patients would not counsel specialists at beginning periods of sorrow,
which prompts further disintegration of their conditions. [26] proposed that past
examinations concerning recognizing psychological instabilities through online
networking have predominated distinguishing melancholy through Twitter corpora.
This paper discussed the uneasiness issue through close-to-home stories gathered
through the mainstream internet-based life site, Reddit. A significant informational
collection of run-of-the-mill and nervousness-related posts, and we apply N-gram
language displaying, vector embedding, point investigation, and passionate standards
to produce includes that precisely characterize presents related to parallel degrees of
uneasiness. It accomplishes a precision of 91% with vectors pace word embedding
and exactness of 98% when joined with dictionary-based highlights.
Almeida et al. [14] expressed that the frameworks created by the UQAM group and
this framework were utilized in Task 2017, CLEF eRisk. The objective was to predict
the depression using this approach and give the optimum solution. A few methodolo-
gies dependent on administered learning and data recovery techniques were utilized
to assess the danger of melancholy for a client, given the substance of its posts
on Reddit. The tests demonstrate that joining data recovery and AI methodologies
are the best outcomes among the five assessed frameworks. This report depicts the
early hazard forecast frameworks submitted. The best framework utilized for further
processing and referred to as the eRisk.
Individuals share their sentiments and information on social media right off the bat.
[30] proposed a precise sorrow conclusion is a complex long-haul inquiry about the
issue. The present discussion situated despondency conclusion between a medicinal
specialist and an individual is not exact because of the number of known indications.
To find more melancholy indications, our exploration work centers around removing
elements identified with sorrow from web-based life, for example, informal organi-
zations and websites. There are two significant points of interest in applying content
mining instruments to new sorrow indications extraction.
Recognizable proof of danger for people with schizophrenia is testing when
they do not look for treatment. [15] recommended that Individuals who experience
the ill effects of schizophrenia include 1% of the United States populace and are
multiple times bound to pass on suicide than the general US populace. This work
utilized the huge corpus of Twitter pots and AI strategies to distinguish people with
schizophrenia. Small scale blogging stage enables clients to impart their contempla-
tions and feelings to the world in short pieces of content. Utilizing highlights from
tweets, for example, Emoji use, posting time of day, and word reference terms, we
prepared, manufactured, and approved a few AI models. Our help vector machine
model accomplished the best execution with 92% accuracy and 71% review on the
held-out test set.
204 Y. W. Abuhasirah

Jamil [16] recommended a mechanized framework that can recognize the danger
to clients from their open web-based life movement, all the more explicitly, from
Twitter. We gathered information from the Bell Let’s Talk battle, a wide-coming,
multiyear program intended to end the quietness around psychological maladjust-
ment and bolster emotional wellness crosswise over Canada. The objective was
to organize a client-level classifier that can in-danger clients that accomplishes a
sensible exactness and review. We also prepared a tweet-level classifier that forecasts
whether either tweet demonstrates wretchedness.
Yazdavar et al. [17] suggested that with the ascent of web-based life, many indi-
viduals are routinely communicating their dispositions, sentiments, and day-by-day
battles with psychological wellness issues via web-based networking media stages
like Twitter. Dissimilar to conventional observational companion studies directed
through polls and self-detailed overviews, we investigate the solid recognition of
clinical wretchedness from tweets got subtly.
Leiva and Freire [18] expressed that the measurements introduced by the World
Health Organization illuminate that 90% of suicides can be credited to psycholog-
ical instabilities in high-pay nations. In addition, past investigations presumed that
individuals with dysfunctional behaviors would, in general, uncover their state of
mind via web-based networking media as a method for help. Subsequently, the real
target of this work is the investigation of the messages that the client posts on the
web successively through a timeframe and identify at the earliest opportunity if this
client is in danger of sorrow.
Sadeque et al. [22] proposed the 2017 CLEF eRisk pilot assignment centers
around consequently distinguishing despondency as right on time as conceivable
from clients’ presents on Reddit. This paper presented the procedures utilized for
the University of Arizona group’s interest in this early hazard discovery shared
assignment. For expectation, we utilized both successive (intermittent neural system)
and nonconsecutive (bolster vector machine) models. This model performs fairly
on the test information, and the repetitive neural models perform superior to the
non-successive help vector machines while utilizing a similar capability. This paper
depicted the systems for the University of Arizona entries to the 2017 CLEF eRisk
early hazard identification of melancholy pilot task.
Vioules and Moulahi [3] proposed that Suicidal ideation location in informal
online communities is a rising exploration zone with significant difficulties. The
ongoing examination has demonstrated that the freely accessible data, spread cross-
wise over web-based life stages, holds important markers for adequately recognizing
people with self-destructive goals. The key test of suicide anticipation is under-
standing and distinguishing the mind-boggling danger factors and cautioning signs
that may accelerate the occasion.
Katchapakirin et al. [20] inspected that Depression is one of the main emotional
well-being issues. It is a reason for mental handicaps and financial weight to a
nation. Around 1.5 of Thailand individuals experience the ill effects of despondency,
and its predominance has been growing up quickly. Even though it is a genuine
mental issue, not exactly a portion of the individuals who have this emotional issue
access emotional wellness administration; it could be a consequence of numerous
Data Mining Approaches for Depression Detection on Social Media … 205

components, including needing mindfulness of the malady. One of the arrangements

would give a device that downturn could be effectively and early distinguished. It
would help individuals know about their excited states and seek assistance from
expert administrations.
Orabi et al. [19] suggested that mental ailment location in internet-based life can
be viewed as a perplexing errand, mostly because of the convoluted idea of mental
issues. This examination zone has begun to develop with the constant increment in the
ubiquity of online life stages that have turned into a necessary piece of individuals’
lives. This cozy connection between web-based life stages and their clients has made
these stages mirror the clients’ close-to-home life on numerous levels.
Facebook is the most famous informal community stage in Thailand, and it could
be a huge asset in building a downturn identification apparatus. This exploration
utilizes Natural Language Processing (NLP) procedures to build up a downturn
recognition calculation for the Thai language on Facebook, where individuals use
it as an apparatus for imparting insights, sentiments, and life occasions. 35 Face-
book clients showed that Facebook practices could foresee a discouragement level.
The tests result demonstrate that the utilization of social data on Facebook, both in
structured messages and exercises, could anticipate sorrow.
Sadeque [31] suggested that identifying melancholy is a key general well-being
challenge, as practically 12% of all handicaps can be ascribed to sorrow. Compu-
tational models for sadness location must demonstrate that they would be able to
recognize wretchedness and that they can do it early enough for a mediation to be
conceivable. Be that as it may, current assessments of sadness identification are poor
at estimating model inactivity. Various issues are resolved using this approach, and
give the optimum solution with the help of the proposed solution. The Reddit dataset
was used to evaluate the proposed system, which gives the best performance.
The analysis of various approaches proves a need to give a solution for the early
analysis of depression. A social media dataset can be used for training the proposed
model. Table 1 shows the state-of-the-art survey on the previously implemented
approaches to depression detection.

2.1 Table 1: State of the Art Studies Survey

The following table shows the state-of-the-art survey on the previously implemented
approaches to depression detection.

3 Problems and Solution

Social media is where people express their frustration, sentiments, emotions, and
despair rather than expressing them with loved ones or near or physical relatives.
This real-life problem exists throughout the world, many people have committed
206 Y. W. Abuhasirah

Table 1 Previous implemented approaches to depression detection

Sr. Dataset Author and Methodology/ Feature Publisher Year Evaluation
No type references Classifier measure
1 Twitter, (Shen et al. DNN-FATC Emotional IJCAI 2018 Effectiveness
Weibo 2018) Word proceedings
Count,
Punctuation
Count,
Topic
Related
Word
Count
2 Twitter Shen et al. NB, MSNL, Emotion IJCAI-17 2017 Performance
(2017) WDL and words,
MDL Emoji and
VAD
features
3 Reddit Shen and LR,NN,SVM Anxiety, Association 2017 Accuracy
Rudzicz Negative, computation
(2017) Emotional linguistics
tone,
Authentic
4 Reddit Almeida IR,SL and Occurrence CLEF 2017 2017 Performance
(2017) SVM of pronouns
5 Twitter Ma et al. Unsupervised Anxiety, Springer 2017 Accuracy
(2017) learning stress,
approach suicide,
depression,
disorder,
pain
6 Twitter McManus Naïve Bayes, Number of AMIA 2017 Accuracy,
(2015) SVM, neural friends, precision,
network time of day, recall
time
between
Tweets,
emotics
7 Twitter Jamil (2017) SVM Depressed University 2017 Precision
words of Ottawa and recall
counts
8 Twitter Yazdavar Lexicon-based Lack of IEEE,ACM 2017 Accuracy
(2017) semi interest, and
supervised feeling precision
learning down, sleep
disorder,
suicidal
thoughts
(continued)
Data Mining Approaches for Depression Detection on Social Media … 207

Table 1 (continued)
Sr. Dataset Author and Methodology/ Feature Publisher Year Evaluation
No type references Classifier measure
9 Reddit Sadeque SVM and NN Depression CEUR 2017 Performance
(2018) lexicon and workshop
Meta Map proceedings
features
10 Twitter Orabi (2018) CNN and Random AclWeb.org 2018 ROC, AUC,
RNN trainable, precision,
skipgram, recall, F
and measure
CBOW
11 Twitter Vioules and NLP, machine Symptoms, IBM/IEEE 2018 Precision
Moulahi learning swear,
(2018) intensifiers,
first
pronouns
12 Facebook Katchapakirin NLP Micro blog, IEEE 2018 Accuracy,
(2018) behaviors precision,
recall, F
measure
13 eRisk Sadeque SVM, Apriori Words, dep ACM 2018 Precision,
(2018) words, dep recall, F1
embed, score
meta map

suicide, and some have become abnormal and exhibit anomalies. We should control
this at an early stage [2] rather than allowing it to grow and claim anyone’s life. We
employ genius Data Mining technologies to detect depression in social media users.
This difficulty differs from race to race, with each having its unique sentiments,
culture, and expressive style, such as Asian, Arabic, and Chinese, among others.
The previous study was conducted for a particular city, nation, and area. The current
study is limited to a particular culture and is text-based, without emojis [3]. Existing
research is for specific and single cultures and text-based, not using emojis.

4 Research Methodology

This research study focuses on diagnosing depression among cross-cultural social

media users using association mining of the Data Mining Association and Machine
Learning approaches. Emojis and test data were used for the experimental analysis to
train the model. Data Mining Association uses for the rules, and Machine Learning
uses for classifying depressed and undepressed. Various works are done on detecting
depression in social media users of a particular culture, region, race, and nation.
All these studies are conducted using text-based data, but no research is conducted
208 Y. W. Abuhasirah

utilizing emoji data. As a result, we are giving a solution by combining text and
emoji datasets. Emojis serve an essential role in expressing sentiments, expressions,
ideas, vision, and emotions more effectively than textual material.
People sometimes submit status updates with only emojis and no text representa-
tion. As a result, it aids in the comprehension of situations. We give a generic answer
for all types of individuals, regardless of ethnicity, culture, or geographic location.
We employ advanced data mining approaches such as association mining rules to
attain this goal and machine learning.
The proposed system has four major parts discussed in detail below and shown
in Fig. 1.

Fig. 1 Proposed model architecture

Data Mining Approaches for Depression Detection on Social Media … 209

5 Exploratory Data Analysis (EDA)

The first step in the proposed system is to get the open-source tweets dataset. We
obtained the sentiment 140 dataset from open-source Kaggle. This dataset is in a
comma-separated value (.csv) that is used for the experiments. It has six fields target,
ids, date, flag, user, and text. This dataset contains 1.6 m tweets which are extracted
using Twitter API. These tweets were labeled 0 for negative and 4 for positive tweets.
After getting the dataset load into the system for analysis, the whole dataset is divided
into train and test purposes. We are applying some techniques to show the data insights
and prepare for further processing. This dataset is ready to use for the next step.

6 Data Pre-processing

The prepared dataset uses for the pre-processing. Without pre-processing, there are
flaws in the dataset which impact the system performance. In the pre-processing,
we store the whole dataset in the dictionary for the contraction means to store the
special words that impact the processing. After this, we remove the punctuations,
stop words, and word analysis and apply tokenization. Punctuations have no value
for the processing; also, stop words need to remove, which impacts the performance.
Word analysis gives which words have more impact on the complete dataset analysis.
All the data convert into several tokens, and we apply approaches to these tokens.

7 Association Mining Rules

This step is for the association mining rules prediction for depression detection from
the tweets dataset. First of all, install the Apriori algorithm API to use the association
mining rules. Extract the top tweets that significantly impact the actual data, such as
those containing depressed, sad, tired, etc. Convert this data into lists to apply the
transactions in them. After that, apply the Apriori algorithm to get the rules. The
obtained rules are evaluated to get the measures’ values, such as confidence, support,
and list values for each rule generated from the tweets.
Apriori Algorithm
Apriori is the association mining rules algorithm used for frequent item sets to
generate the association rules. Furthermore, this algorithm is workable for databases
that have transactions. Apriori algorithm has four steps:
1. Determine the support and confidence in the itemsets and then select the minimum
support and confidence.
2. The higher support values are selected than the minimum support values.
3. Find all the rules which have higher confidence values.
210 Y. W. Abuhasirah

4. Rules are sorted using descending order of the list.

8 Machine Learning Algorithms

In the last step, we apply Machine Learning classifiers of depressed and undepressed
tweets. There are need to extract the features like TF-IDF statistical features and
word embedding. Then split the dataset into train and test to pass the data for model
training. We use different classifiers such as LSTM, Naïve Bayes, SVM, Random
Forest, logistic regression, and Decision Tree. The detail is given of why we use
these algorithms separately.
LSTM Algorithm
For text classification, use the Long Short-Term Memory (LSTM) algorithm because
it memorizes the information. It trains multiple words and takes specific words based
on the statistics. At that point, LSTM categorizes the words into their respective
category. LSTM helps to use multi-string words and easily can identify the word
class.
All the other algorithms, such as Naïve Bayes, SVM, Random Forest, Logistic
Regression, and Decision Tree, are used for the text data analysis. These algorithms
have rules to classify the text data, such as depressed tweets and undepressed tweets.
In the end, we apply some evaluation measures to check the proposed system perfor-
mance where we obtained the values. These values for each evaluation measure
the precision, accuracy, f1-measure, and recall used to get the system performance.
Accuracy is the measure that depicts the more accurate values in the testing dataset.

9 Results and Analysis

Results are elaborated in this section in detail from the proposed system. Exploratory
Data Analysis (EDA) is the step-by-step process that we follow the implement all four
mentioned steps in Fig. 1. The process is to classify the depressed vs. undepressed.
In the first step of the proposed system, we did explore the data deeply. A few visuals
of the data analysis in this step are shown here. The whole dataset is 1.6 M tweets
that are labeled by 0 and 4. Figure 2 shows the visuals for a label.
This dataset is very large and requires a high system for the computation and
required time. So we randomly took 8000 examples of tweets from the whole dataset
and used the depressed dataset labeled as shown in Fig. 3.
We analyze the whole dataset using word cloud and show the more impactful
words to show the negativity in the dataset, such as depressing words. The more the
font size of the word shows, the more impact in the dataset, as shown in Fig. 4. The
words are shown in Fig. 4 such that depression, anxiety, etc. represents the major
impact in the system analysis.
Data Mining Approaches for Depression Detection on Social Media … 211

Fig. 2 Sentiment 140 labeled for the distribution of dataset

Fig. 3 Sampled labeled data for the positive and negative tweets

To apply the association rule mining, we perform some basic necessary steps on the
dataset to prepare for the association rule mining. We applied the Apriori algorithm,
so installing the a priori library with all the related backend support was needed. In
the association mining rules extraction, we apply the A priori algorithm, where we
use a dataset including the emoji of these tweets. The whole dataset is processed in
the form of the text, so we translate the emoji’s records into text form like depressed,
sad, happy, etc. The system we are dealing with is not for the special characters
212 Y. W. Abuhasirah

Fig. 4 Word analysis using word cloud

or images, but only processes text data. For experimental analysis to generate the
association rules, we used a small data sample and did not use the large volume
dataset. The Apriori algorithm is best to get the rules inside the dataset, and it is
commonly used. The classical algorithm works for data mining and using to identify
the frequent itemsets and association rule mining.
Association rule mining is the process in which we identify the frequent patterns
and associations among these items. In our case, for depression detection, there may
be a various rule which helps to find depression. We used twitter text data, so we
identified the rules, and these rules are based on the association among the frequent
words.
For Example, a tweet containing the words like happy, enjoy, and chill this type
of the tweets will show fewer depressive tweets. The other side of the tweet contains
sad, unhappy, and ugly words. It will automatically represent the depressing nature
of tweets. These rules find out the correlation and association among these words to
categorize them. Apriori algorithm says any frequent subset itemset must be frequent.
For instance, if a transaction contains {happy, chill, relax} is frequent, then the
{happy, relax} must be frequent. In the sample transaction, if a tweet has happy, chill
words, it will be undepressed.
Data Mining Approaches for Depression Detection on Social Media … 213

{happy, chill} => ; {undepressed}

{happy} => ; {undepressed}
{tired, sad} => ; {depressed}
Apriori algorithm has some key terms which need to address like confidence,
support, and lift.
Support for the item x in the Apriori algorithm will be the ratio in the number of
transactions where x item appears to the total number of transactions. The equation
of the support of item x is shown in Eq. (1).

Support = No transactions of depressed/Total number of transactions. (1)

Confidence (x = > y) is the where the likelihood of the item y which may occur
in the tweet when the x item or word appears. This works to show the popularity of
the x item or word. Equation (2) shows the confidence calculation.

Support(happy, relax, undepressed)

Conf({happy, relax} => undepressed) =
Support(happy, relax)
(2)

Lift (x = > y) is nothing but it is the likelihood of interest of word y appearing in

the tweets when the x in it the tweet. Equation (3) shows the lift calculation.

Support(happy, relax, undepressed)

Lift({happy, relax} => undepressed) =
Support(happy, relax)
(3)

There are three possibilities in the lift such that: if Lift(x => y) = 1 means there
will be no correlation between the itemsets. If Lift(x => y) > 1 there will be a positive
correlation among the itemsets. If Lift(x => y) < 1 there will be a negative correlation
among the itemsets.
After that, we apply some pre-processing for this process and apply the transaction.
After applying the association rule mining Apriori algorithm we get the following
associations below in Fig. 5. These association results are all the possible outcomes.
For instance, we can see the association become {‘anxiety’, ‘unhappy’} in the first
transaction. In the second transaction the {‘beautiful’, ‘awesome’} so it proves that
the tweets contain these words in their tweet find out the exact words or items in
them.
Based on these association results after applying the Apriori algorithm we find
out the various rules which help to find the depressed tweets in the dataset. Figure 6
shows the rules generated based on these association results. Also, the parameter
values such that support, confidence, and lift are also calculated properly. There are
various rules generated on the given dataset and a few of them are shown in Fig. 6. We
also analysis these rules and their performance that shown below in a few samples.
214 Y. W. Abuhasirah

Fig. 5 Association results after applying the Apriori algorithm

{unhappy} => ; {anger}

{anxiety} => ; {depressed}
{stress, anxiety} => ; {depressed}
{think positive, happy} => ; {undepressed}
These are some sample rules which we depicted from the plenty of rules generated
in the whole execution. These samples cover the idea of how our proposed system
gets the rule to identify the depression detection in the tweets dataset. These rules are
generated automatically and based on the dataset nature these rules best fit to give
the analysis.
In the end, we apply Machine Learning classifiers that classify the depressed
and undepressed tweets. The depressed tweets are labeled 1 and the undepressed
labeled 0. The statistical results for using these algorithms are shown in Table 2. The
evaluation measures are precision, accuracy, f1-score, and recall.
LSTM shows larger values after evaluation as compared to the other algorithms.
The reason is that LSTM stores the information for a long time and during the training
Data Mining Approaches for Depression Detection on Social Media … 215

Fig. 6 Association rules

generated using the Apriori
algorithm

Table 2 Machine learning algorithms evaluations

Algorithm Accuracy Precision Recall F1-score
Naïve bayes 0.9007 0.91113 0.90077 0.89061
SVM 0.9838 0.98414 0.98389 0.98370
Logistic regression 0.9703 0.97114 0.970.36 0.97060
Random forest 0.9552 0.96023 0.95522 0.95627
Decision tree 0.9874 0.98761 0.98744 0.98732
LSTM 0.9994 0.99164 0.99162 0.99163

takes a large number of words to train and store them for processing. The statistical
results show the performance of the proposed system.
216 Y. W. Abuhasirah

10 Conclusion

It is concluded that depression is a frequent but dangerous mental health condition.

It is a dysfunctional habit that may affect anybody, regardless of age, gender, and
socioeconomic environment. Nowadays, we live in a world where almost everybody
has many problems like discomfort and tension in their lives, irrespective of age or
gender, due to race, customs, rituals, and sins. Due to such problems, some people are
struck by inferiority, others take the pressure, and a few become hopeless and try to
destroy themselves. It gives a chance to examine informal community information for
people’s emotions and notions to explore their dispositions and frames of mind when
conveying using these online instruments. Computational models for wretchedness
recognition must demonstrate that they can identify sorrow and do it early enough
for a mediation to be conceivable. There are numerous intelligent strategies utilized
for Depression discovery in online life clients. We applied association rule mining
using the Apriori algorithm to get the rules. Machine Learning algorithms such as
Naïve Bayes, LSTM, Decision Tree, Logistic Regression, SVM, and Random Forest
are used to classify depressed and undepressed tweets. Future work should focus on
extending more mining techniques, and other algorithms could provide more rules
and generalization results.
People have worked on detecting sadness in social media users of a specific
culture, race, or nation. All study is done with text-based data; however, we analyze
using text and emoji responses. Emojis are vital in expressing thoughts, vision, and
emotions more effectively than applying only textual material. Our primary goal is
to track down depression-affected users at an early stage. There is no study on cross-
cultural or multi-cultural solutions for sad persons. Our primary goal is to give a solu-
tion for cross-culturally depressed users using Data Mining and Machine Learning
approaches. We analyze the scientific research productivity and international collab-
orations of social media because we do not find any comprehensive study conducted
to measure and identify depression among people using social media. Social media
data under data mining techniques promotes research and international collaboration
among people. Secondly, we introduce a new way to calculate depression in social
media users using textual and emoji data. Our primary purpose is to measure this
viral and rapidly developing disease early to control and overcome the suicidal issue.

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Cybersecurity and Forensic Accounting
a Literature Review

Ghazwa Mohamed Mejeran and Abdalmuttaleb Al-Sartawi

Abstract The current paper analyzes previous studies related to criminal

accounting. Many of the previous studies consider criminal accountants as an expert
who engaged in the investigation related to different financial crimes including
cyber ones. The analysis assumes the vital role played by the forensic accoun-
tant in protecting data and in preventing a different kind of fraud which includes
technological ones.

Keywords Cybersecurity · Accounting · Technologies · Forensic accounting ·

Crime

1 Introduction

The growing reliance of public and private companies on web technologies and
networks for their financial management systems has increased their vulnerability to
cyberattacks, which are a risk. The main one that companies must control [1–3]. The
objectives of these attacks may be to steal, destroy financial assets, steal intellectual
property or other important information relating to companies, their clients or busi-
ness partners, and to target companies operating in critical infrastructure industries
[4–6].
In recent years, enterprises have relied heavily on information technology and
communication networks have formed an intermediary in which data flows and
information cabinets are inhabited [7, 8].
These networks need protection that safeguards the integrity of their contents
and ensures the continuity of their work. and in view of the many threats to the

G. M. Mejeran
Freelancer, Manama, Bahrain
e-mail: [email protected]
A. Al-Sartawi (B)
Ahlia University, Manama, Bahrain
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 219
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_16
220 G. M. Mejeran and A. Al-Sartawi

integrity of data that flows into networks or data contained in their cupboards and
the multiple threats that threaten the stability and security of such networks, such as
viruses, malware and attempts to penetrate for the purpose of stealing, sabotaging,
modifying and tampering information [9–12].
The importance of around-the-clock protection of the components of physical and
software information networks comes by installing protection devices and software in
and within local network portals and managing those hardware and software from the
security angle and filling gaps first to reduce opportunities for information hackers,
competitors, and enemies to be able to hack or steal any data from information
networks [5, 13].
Cybersecurity has been relied upon in the field of accounting to maintain financial
statements and not manipulate figures that may lead to significant corporate losses
[14–17].

2 Literature

According to the findings of [18–21], the mathematical probability of a spam emails

incident grows obviously it depends on the individual the scam artist impersonates
(i.e., a friend), that whether email means achieving the objective, and if the email
consistently y among the top to the victim’s task. The paper also presents models
developed that used negligible stagnation and artificial neural to distinguish among
phishing ingle emails as well as Enron emails [13, 22].
The goal of forensic accounting is to determine the truth of accounting records
and the validity of income statement. Forensic accounting is employed to start
investigating financial statement preparatory work and trying to report occurrences,
including such bank crime [23–25].
In those other words, forensic accounting is a systematic approach to preventing
fraud in which financial data as well as quasi details are managed to gather, monitored,
studied, and analyzed. The forensic accountant examines economic transactions for
substantiation of misconduct, whereas the basic accountant focuses on trying to
balance books and record keeping [26–29].
The study’s [18] goal was to see if a previous cyberattack affected the effective-
ness of cybersecurity risk assessment and research shows reports. The researchers
created a study to acquire how AICPA’s suggested revelations could indeed impact
the preconceptions of non-professional shareholders. Whenever a business does not
divulge a previous cyberwar, the researchers discover the t allowed to issue a report
without warranty is much more useful. Moreover, issuing a separate cybersecu-
rity guarantee report might increase the company’s potential to recruit invest tent
opportunities.
The researcher [19] concentrated on information collection all through cyberse-
curity activities, and the present literature also concentrate on the performing the
behavior of cybersecurity analysts, particularly statisticians for whom the forensic
Cybersecurity and Forensic Accounting a Literature Review 221

analysis is a crucial feature in their functional activities. Previous research character-

ized cybersecurity tasks simultaneously, process flows, and perceptual prerequisites.
Pertinent studies explain the assessment of cybersecurity from the point of view of
special awareness and factors of mass bargaining.
Different organizations visualize the operation of cybersecurity prognosticators
differently, thus, capabilities, obligations, preconceptions, and levels of judgement
delegated to individuals and groups vary. Numerous organizations’ cybersecurity
experts are primarily concerned with ensuring compliance (e.g., operating system,
software version management, virus protection updates). Individual people in these
situations rarely have always had the experience and expertise to respond to a serious
catastrophe, and when an incident happens, the facilities of other organizations are
required [2, 30–32].
The capability to evaluate and priorities alerts efficiently is essential to these
procedures and has been considered. Individuals who work in these environments
frequently do not investigate further than the reasonable method of designed to
mitigate security flaws, with a more complete study being transmitted to other
organizations [33, 34].
Digital cybercrime assessment is also responsible for charge of investigating
cyberspace threats including such malware, trying to troll, SQL order attacks,
distributed denial-of-service attacks (DDoS), security breaches, and any other type
of cyberattack that involves economic or damage to reputation harm. The aim of the
digital criminal probe is to preserve, identify, obtain, and record digital information
for use in the court system [35–37].
Digital forensic analysis is used to investigate any crime involving the use of elec-
tronic devices, whether such devices are used to commit an offence. Having digital
forensic capability becomes very important for modern organizations to investigate
domestic policy violations and external attacks against their computerized systems
[38–41].
The previous research demonstrated that attendees who supplied the much more
accurate response to obstacles used much more special purpose computer software
[11, 22, 42–45]. It was responded by pointing out that while specialized cybersecurity
computer programs might provide major characteristics that would enable users to
perform things that wouldn’t otherwise be possible, they just weren’t adequate per
se for the work problem of forensic investigation of information security [8, 46, 47].
The current paper likens the performance and behavior with somewhat experi-
enced analysts. The primary distinction is the application of certain software tools
[24, 48]. It ought to be noted that neither of the approaches that rely on behavior
generated significant statis tical differences [49, 50]. As a result, at a reduced rate of
actions (e.g., application software launch, window transition, etc.), specialists and
beginners behave the same way [51, 52]. Nevertheless, more experienced experts’
advantage more from some development tools and, in specific, more than that from
overall software tools. This implies that they may approach the specific task [53, 54].
222 G. M. Mejeran and A. Al-Sartawi

3 The Importance of Criminal Accounting

The importance of criminal accountability and the reduction of financial and admin-
istrative corruption lies in the fact that it supports financial issues in institutions and
companies, thereby contributing to the control of all cases of theft, fraud, and fraud,
especially in public funds [55–62]. Its importance is as follows:
1. Contribute to the resolution of financial disputes and judicial disputes with
damage assessment [55, 59].
2. Enhanced financial control and evaluation of corporate performance [55, 58]
3. Contribute to the creation and presence of external oversight of companies
[59, 60].
4. Reveal all instances of fraud and manipulation that may take place in company
matters financially [59–61].
5. Preserve customers’ and partners’ funds in any business or economic activity
[56, 57].
6. Companies are helped to help them comply with all laws and laws and regulations
[58, 62].
A study [20] describes that lawbreaker financial reporting is viewed as an orga-
nization’s financial process based on a collection of foundational principles, rules,
and guidelines in addition to directions that need to be accompanied to accomplish
the objectives and accomplish everything that the institutions generally aspire to.
Accounting is also defined as a series of aspects and procedures to be followed; To
bring out all the analysis, register and collation of financial data as well as input prices
in overall, which problem the company of businesses and businesses of various types
[14, 63].
Accounting is a public science that is studied and applied in all scientific and
practical respects, as well as accounting science on all processes, which in turn
illustrates the causes and methods of economic change, which is very important and
necessary for many competent authorities and stakeholders [64–66].
Through accounting and reporting, accounting statements implemented within
institutions and companies and submitted at the end of each financial period,
managers, competing individuals and investors can make and document their
decisions and rely on much of the accounting information provided therein [67, 68].
The study emphasizes three types of corruption fraud: conflict of interest, bribery,
and extortion. Research shows that corruption is involved in about a third of scams
[69, 70]. In case of conflict-of-interest fraud, the fraudster exercises influence for
personal gain that negatively affects the company [71]. The fraudster may not
benefit financially but receive an undeclared personal benefit because of the situation
[34, 44, 72].
For example, the manager may approve the expenses of an employee who is also
a friend to maintain that friendship, even if the expenses are inaccurate. Bribery
is when money (or anything else of value) is provided to influence the situation.
Extortion is the opposite of bribery and occurs when money is requested (rather
Cybersecurity and Forensic Accounting a Literature Review 223

than offered) to secure a certain result [73–76]. Due to fraudulent corporate prac-
tices, accounting scandals, the judiciary’s business climate, and regulatory measures,
accounting is a fast-changing field of accounting [77–79]. Forensic accounting
academic achievement wasn’t largely represented in financial reporting curricula as
considered necessary by the industry [80]. While the study’s findings [81] indicated
that forensic accounting is extremely beneficial in preventing fraud and lowering
Nigeria’s banking industry, it also has a positive impact on bank performance. To
this end, it is suggested that managers provide a clear description of the ultimate
purpose of the financial sector vis-à-vis its strategic vision and that the features, role
and responsibilities as well as functional areas of valid auditors and auditors have
been properly demarcated, especially in the area of lowering scam in the banking
industry [70, 82].
Several suggestions were preferred by [81]; A precise definition of something like
the ultimate purpose of the financial sector vis-à-vis the strategic vision that controls
what it is and how it works. The position as well as functional areas of valid auditors
and auditors, particularly in lowering forgery in the banking sector, must always be
specifically articulated.
Make clear respective positions, obligations, and law enforcement agencies as
needed to be responsible for efforts in the areas of career development in required to
b ring out certain actions in the financial sector [83–85]. If all the above suggestions
are followed, the Nigerian banking industry will reduce fraud and thus improve its
profitability achievement [86].
The study’s key conclusions [87] disclosed an important connection among
forensic accounting rules and the ability of financial reviewed and approved to detect
occurrences of massive corruption. But at the other side, the large percentage of Iraq’s
audit and finance employees suffer from misconception and details on criminal finan-
cial reporting. As a result, [87] proposed incorporating forensic accounting rules into
the curriculum content of accounting at Iraqi universities at the main and learning
experience via both theoretical and practical lessons. The subject of investigative
responsibility and education cannot indeed be emphasized. As a result, one such
thing will indeed rise corruption and fraud while also harming the economic growth
of the country. Accounting information could be used to prevent or reduce fraud.
Finance corruption and fraud are on the rise.
According to the Iraqi study, this is because criminal financial reporting is not part
of the education system able to teach at Iraqi universities, such as it is at universities in
developed nations. There seem to be presently neither course in lawbreaker financial
reporting offered at Iraqi universities, alike postgrad, and bachelors. Besides that,
the majority of Iraq’s audit team is misinformed about criminal accounting rules.
Consequently, it is suggested that criminal financial reporting methods be included
in accounting degree curriculum content and training for Iraqi university accounting
professionals, in addition to other professionals affiliated with the Iraqi Chartered
Accountants Association.
As a result, there are numerous ways of reducing and at least reduce corruption and
fraud in the nation. On the other side, a study [88] showed that financial institutions
had already faced challenging situations over through the decades due to scams.
224 G. M. Mejeran and A. Al-Sartawi

Related to regulatory inspection and testing, financial institutions are now under
incredibly huge planning to implementation best practices.
Scams in Indian banks had already made the country’s financial system precar-
ious and vulnerable. Because of several undiscovered frauds, forensic accountants
and auditors are critical and therefore must be dealt with immediately. India’s oppor-
tunities for accounting professionals had also been increasing in recent years as well
as continue to develop. The Reserve Bank of India appointed managerial accounting
as well as auditing, but banks seem to be keen to contact fraud examiners investigators
and frauds, often reliant on internal audit function.
Leading to excessive fraud, valid accountants are needed. Satyam was one of
the conflicting scams in India that contributed to the 2009 financial meltdown [89].
According to [88] banks must figure out how to practice and prepare appropriately
competent staff for forensic accounting and evaluate so that trained staff can start
investigating large- scale frauds. India’s forensic institutions provide exceptional
programmers to combat bank fraud. The above discussions are most likely dedicated
to bank robberies [90].
In such cases, forensic accounting is a viable method for examining and fraudulent
transactions in banks which have been mismanaged [91]. Vibrations in complex
banking operations can only be tried to address through to the successful execution
of valid financial reporting [3].

4 Conclusion

After analyzing previous studies, criminal accounting is a lease on a specialized

area of accounting. The criminal accountant investigates incidents of fraud, bribery,
money laundering and embezzlement through analysis of records and financial trans-
actions, tracking of assets, etc. Securities fraud, asset embezzlement, identity theft,
compensation disputes, trademark and patent violations are just some of the focus
areas for legitimate accountants.
Law enforcement agencies, including intelligence and interior, together with fraud
investigation units of major corporations and financial institutions often turn to these
highly skilled professionals to help detect and analyze evidence used to solve and
prosecute financial crimes.
Several studies have emphasized the need to apply criminal accounting in order
to protect data and we have noted this in several previous studies in Iraq, Nigeria
and India, They all emphasized the benefits of criminal accounting, and criminal
accounting services generally include the application of specialized knowledge and
investigative skills of chartered accountants to collect, analyze, evaluate, interpret
and report evidence in the courtroom, board or any other legal or administrative
place.
Cybersecurity and Forensic Accounting a Literature Review 225

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Exploring Business Faculty’s Perception
About the Usefulness of Chatbots
in Higher Education

Fatimah Al Shakhoor, Raghad Alnakal, Osama Mohamed,

and Zakeya Sanad

Abstract The study aimed to investigate the perceptions of business faculty

regarding the usefulness of chatbots in higher education. The study focused on three
main factors that would affect the acceptance level of faculty members in using
chatbots in higher education including performance expectancy, perceived trust, and
social influence. The survey research instrument was distributed to Business faculty
internationally. A total of 120 responses were collected and analyzed. Based on the
regression results, the study found that the acceptance level of faculty members in
using chatbots in higher education is significantly affected by the chatbot perfor-
mance expectancy, perceived trust, and social influence. The analysis indicated that
Business faculty members perceived chatbots as useful tools in higher education.
The study recommends that educational institutions should consider implementing
chatbot technologies to enhance faculty engagement and support in the business
discipline. Providing training programs and workshops to familiarize faculty with
the benefits and functionalities of chatbots is essential to address any potential resis-
tance to adopting these technologies. However, it is important to acknowledge the
limitations of the study. The study focused specifically on business faculty; there-
fore, the results may not be fully applicable to other educational contexts or faculty
members from different disciplines.

Keywords Chatbot · Business faculty · Higher education · ChatGPT · Artificial

intelligence

F. Al Shakhoor · R. Alnakal · O. Mohamed

Freelancer, Manama, Bahrain
e-mail: [email protected]
Z. Sanad (B)
Ahlia University, Manama, Bahrain
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 231
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_17
232 F. Al Shakhoor et al.

1 Introduction

Simulating human conversation, chatbots are computer programs that use artificial
intelligence (AI). Their efficiency and personalized services have been largely appre-
ciated by various industries, including education. With the growing interest in the
adoption of chatbots in higher education, the Business sector is particularly keen.
The usefulness and challenges of incorporating chatbots in higher education will be
specifically emphasized in this context [1–3].
Driven by the need to offer students personalized and efficient services, higher
education has embraced the adoption of chatbots. One of the ways in which chatbots
come in handy is providing students with instant feedback, answering commonly
asked questions, and delivering a customized learning experience [5, 6]. They
also handle administrative tasks like managing course registration and booking
appointments. By integrating with learning management systems (LMS) and other
educational technology platforms, they offer a seamless learning journey [9].
In various previous studies, it has been demonstrated that chatbots serve a purpose
in higher education. These automated tools are noted for enhancing the engage-
ment of students as well as motivating them to learn [4]. Information and assistance
become easily accessible to students via chatbots, and this convenience is key [17,
21]. Students’ diverse learning styles and preferences can also be accommodated by
chatbots, thereby providing a personalized educational experience [6, 7]. Further-
more, task automation by chatbots plays a major role in relieving the workload of
faculty and staff [9].
In higher education, chatbots have potential benefits, but there are also obstacles
to be tackled. Among these difficulties is faculty and students’ lack of comprehension
and awareness of chatbots [4, 16]. In addition, effective design and programming are
required for chatbots to deliver precise and pertinent information to students [6, 7].
To guarantee that chatbots mesh well with other systems, it is crucial to assimilate
them into pre-existing educational technology platforms [9–11]. It is also imperative
to consider moral concerns like safeguarding data and user privacy [8, 10, 18].
Offering personalized and efficient services to students, chatbots have the potential
to revolutionize higher education, especially in Business. Their scope of benefit
is vast, from administrative tasks’ support to prefacing learning experiences with
real-time feedback. Ethical considerations, effective design, and programming are
among several challenges that need to be addressed for their successful adoption.
The lack of awareness and understanding of chatbots among students and faculty
is an added challenge that must be overcome. Underpinning all concerns should,
therefore, prioritize overcoming said challenges.
Given its ability to improve student learning experiences as well as administrative
efficiency, the use of chatbots in higher education has grown increasingly popular in
recent years. This popularity may be attributed to the potential of chatbots. However,
there hasn’t been a lot of study done on how professors feel about the usage of
chatbots in higher education yet. The perspectives of Business faculty have a big
effect in determining whether chatbots will be adopted and used in Higher Education
Exploring Business Faculty’s Perception About the Usefulness … 233

[25]. Business faculty play an important part in the formation of the curriculum and
the teaching techniques utilized in their degree programs. As a result, the objective
of this study is to investigate the perspectives held by Business Faculty about the use
of chatbots in the context of higher education.
The outcomes of this research contribute to the current literature on the application
of chatbots in higher education and will give insights into the perspectives of Business
professors regarding the usefulness of chatbots in Higher education. The findings of
this research may be used to inform the development and deployment of chatbots
in Higher education, which in turn can assist Business degree programs in better
meeting the demands of their student body.
The importance of this research comes in its attempt to identify and fill a gap in the
existing research on the importance of chatbots in higher education. Despite various
research studies in the field of artificial intelligence (AI) in the business industry, the
purpose of this study is to examine the Business Faculty’s perspective on chatbots
in Higher Education. This study intends to examine the level of their positive or
negative response by studying the factors that determine the usefulness of chatbots
in higher education, consequently measuring the Business faculty’s perception on the
usage of such technology. The study’s findings can help educational policymakers
and stakeholders in making informed decisions concerning the use of chatbots in
higher education.
Hence, this research aims to identify factors that influence the usefulness of Chat-
bots in higher education by exploring the business faculty’s perception. The following
are the research questions:
1. What impact does Performance Expectancy have on acceptance level of chatbot
usage on business higher education faculty?
2. What is the effect of Perceived trust on acceptance level of chatbot usage on
business higher education faculty
3. What impact does the social influence have on acceptance level of chatbot usage
on business higher education faculty?

2 Literature Review

According to [5] study, it has been suggested that the recently launched AI chatbot,
ChatGPT, could immensely benefit in finance research. This article addressed benefits
of using ChatGPT to generate ideas and identify data using the empirical approach.
Besides, the study highlighted the drawbacks of literature synthesis, determination
and implementation of testing frameworks. One of the paper’s key findings is that the
amount of private data and researcher field of expertise input effects the output quality.
Furthermore, the assistance of chatbots can be useful for researchers who already have
a solid basis in their field of study and have access to pertinent data. The importance
of using ethical implications in AI technology are also highlighted in this research. In
addition, issues related to data privacy, bias, and transparency are crucial when using
AI bots like ChatGPT. The study’s findings indicate a necessity for additional research
234 F. Al Shakhoor et al.

to corroborate the results in other contexts and fields. Additionally, responsible and
transparent use of these tools is crucial.
According to the findings of the study [20], AI-based Chatbots can aid Malaysian
Higher Education Institutions (HEIs) by offering virtual student services assistance.
The article focuses on the elements that determine chatbot adoption effectiveness,
with the UTAUT2 model serving as the reference IS theory. It also underlined the
significance of designing user-friendly and visually appealing chatbots. The impor-
tance of perceived trust, interaction, design, ethics, performance expectancy, and
frequent usage of chatbot apps was one of the study’s important results. These
insights can be used to inform productivity and marketing initiatives for better serving
students. A survey technique and a two-stage analytical procedure (SEM-ANN)
were used to assess the study model and investigate the research hypothesis. The
study’s findings also laid the groundwork for future studies on chatbot adoption in
higher education. Overall, this article added to the expanding collection of articles
on AI-based chatbot adoption in non-HEI contexts.
With regards to perceived benefits and limitations of chatbots in higher education,
[12] performed a survey to investigate the perceived advantages and disadvantages
of chatbots in higher education. Chatbots are computer programs that understand
and reply to user inputs using natural language processing. They have been used in
higher education as virtual assistants, customized learning assistance, and student
help and interaction instruments [12]. The study involved 137 university students,
and the findings revealed that chatbots are effective for giving quick and simple
access to information, addressing inquiries outside business hours, and enhancing
student participation [12]. Students, on the other hand, were concerned about the
absence of human connection and the possibility that chatbots may deliver erroneous
or irrelevant information.
The results correspond with earlier research that has explored the advantages and
disadvantages of chatbots in higher education. Sandu and Gide [23], for instance,
examined chatbot programs and assessment studies in higher education and discov-
ered that while chatbots can enhance student engagement, satisfaction, and learning
outcomes, they additionally demand careful design and implementation to guarantee
effectiveness and user-friendliness. Kooli [10] performed a randomized controlled
study of a chatbot meant to promote student learning and discovered that the chatbot
enhanced educational results for some but not all students.
On the other hand, some studies discussed the challenges of Chatbots for
Accounting Professionals. For instance, [3] investigated the use and problems of
chatbots in the context of accounting professionals in their study. The paper empha-
sized the usage of ChatGPT, a language model similar to the one I’m using to commu-
nicate with you. Chatbots may help users with activities like data input, analysis, and
reporting, as well as give real-time information and assistance. These advantages
have also been noticed in other industries, including healthcare, where chatbots can
assist experts minimize their burden by answering typical patient concerns [13].
Nevertheless, [3] mentioned several difficulties with the implementation of chat-
bots in accounting. These challenges included the need for careful design and imple-
mentation to ensure accuracy and user-friendliness, the potential for chatbots to
Exploring Business Faculty’s Perception About the Usefulness … 235

make errors or provide incomplete information, and concerns about data privacy and
security. These challenges have been identified in other fields as well.
The article concluded by presenting a case study of ChatGPT’s application in
accounting, which demonstrated the potential usefulness of chatbots for tasks such
as financial statement analysis and fraud detection [3]. However, the author also noted
that further research is needed to explore the effectiveness of chatbots in accounting
and to address the challenges associated with their use.
Tsivitanidou and Ioannou [24] conducted a study aimed to explore the potential
of chatbot integration in educational contexts. The study employed semi-structured
online interviews with professors and students from a Cypriot institution. Addition-
ally, the research study that involved analyzing information obtained from interviews
to identify the diverse needs and expectations of higher education users regarding
chatbots as an supporting technology. Through thematic analysis, the study revealed
that users require chatbots to support content delivery, formative evaluation, quali-
tative feedback, research task processing, and social bonding. Hence, the research
provided compelling evidence of chatbots’ potential to meet the diverse technolog-
ical and instructional needs of higher education users. The study recommended that
chatbot developers prioritize incorporating key platform elements such as flexibility,
personalization, and user-friendliness when creating chatbots. By doing so, chatbots
can provide optimized levels of support and enhance the overall quality of the higher
education experience for users [14, 15]. These findings underscore the critical impor-
tance of creating next-generation chatbots that are not only technically advanced but
also user-centric and able to adapt to the changing needs of higher education users.
Also, [1] conducted research to examine the potential benefits of using chatbots to
gather data from university students. The major goal of the study was to compare the
usefulness and efficiency of chatbots as a data gathering method to traditional survey
approaches. Abbas et al. [1] conducted a comprehensive assessment of data collected
from a representative sample of university students in Oman using a mixed methods
research design. The main purpose of the study was to evaluate the quality and
quantity of university questionnaire responses received via chatbots. According to
the study, chatbots have proved to be an effective tool for data collection in university
surveys. The results showed that chatbot-assisted surveys resulted in significantly
higher response rates. This indicates that individuals find the technology to be more
interactive and engaging compared to traditional survey techniques.
According to [1], chatbots have customizable features, can provide personalized
responses, and produce quicker survey results, making them a beneficial instrument
for gathering data. Compared to conventional survey methods, respondents feel more
comfortable expressing their opinions to chatbots, representing a significant advan-
tage afforded by this technology. This article concluded that Chatbots represent an
effective approach for administering university surveys. The utilization of chatbots
allows for the collection of data in an economical and efficient manner, contributing
to the enhancement of teaching and delivery techniques within academic institutions
[1].
Chocarro et al. [4] utilized the Technology Acceptance Model (TAM) to investi-
gate the perceptions of teachers regarding chatbots in the classroom. The study aimed
236 F. Al Shakhoor et al.

to determine how social language, bot proactiveness, and user characteristics affected
instructors’ adoption of chatbots in education. The research employed a question-
naire survey of 214 Spanish teachers who provided their impressions of chatbots
in education and received a rating for their responses. The findings suggested that
social language and the robot’s initiative are important factors influencing teachers’
perceptions of chatbots. In addition, the lecturers’ previous experience with new
technologies and the ease of use of chatbots played a crucial role in shaping their
views. Chocarroet al. [4] also found a strong correlation between teachers’ percep-
tions of chatbots and their intentions to use chatbots in the classroom. The study
by [4] examined factors influencing teachers’ adoption of chatbots in the classroom.
According to the results, chatbots could prove to be useful educational tools, provided
they have active functions and appropriate social language. The study highlighted
the importance of considering teachers’ prior experience with the technology and
ease of use when considering the use of chatbots in education.
Furthermore, [19] conducted a study about the student perspective on information
acquisition using chatbots at universities. Now more than ever, chatbots find use in
a wide variety of contexts. The authors asserted that there is a new form of human–
computer interface based on natural language, and they are particularly useful for
issues that arise in the workplace, such as customer service and information gathering.
However, there has been a dearth of research into the use of chatbots in educational
institutions, even though they could be immensely helpful in a variety of contexts.
Therefore, researchers used a questionnaire to collect data from 166 students at a
German university, representing a wide range of majors and levels of education. Their
goal was to conduct a comprehensive study of (1) what it takes to build a chatbot, and
(2) what kinds of questions and topics chatbots should be able to answer. The findings
of the researchers also showed that many college students are open to interacting with
chatbots, suggesting that they are well-suited to the educational setting.
Moreover, [2] looked into what factors might affect chatbots’ popularity among
college students and how they might be implemented in higher education institu-
tions. In this research, researchers applied the UTAUT2 (Unified Theory of Accep-
tance and Use of Technology) to the classroom setting. Brunel University London’s
431 undergraduate and master’s level computer science students participated in a
quantitative survey. Partial Least Squares Structural Equation Modeling (PLS-SEM)
in SmartPLS3 was used to examine the data. The research showed that students’
behavioral intention (BI) to use chatbot technology was most strongly predicted by
their performance expectancy, effort expectancy, and habit.
Pérez et al. [22] looked into the use of chatbots in the education system. The
authors’ research is centered on the evolution and current applications of chatbots
in the field of education, where they serve as either service assistants or educa-
tional agents. The study findings suggested scenarios in which a chatbot can help
with learning in a setting analogous to that of a human instructor, while also inves-
tigating additional options and methods for rating chatbot quality. Based on the
above-mentioned studies, the research hypotheses are as follows:
Exploring Business Faculty’s Perception About the Usefulness … 237

H1 : There is a significant relationship between Performance Expectancy and

Acceptance level of chatbot usage to business higher education faculty.
H2 : There is a significant relationship between Perceived Trust and Acceptance level
of chatbot usage to business higher education faculty.
H3 : There is a significant relationship between Social Influence and Acceptance level
of chatbot usage to business higher education faculty.

3 Methodology

The fundamental goal of this study is to examine how elements such academics’,
trust, social influence, and performance expectations affect the acceptability level of
the adoption of chatbots in Business Higher Educations (Fig. 1).
A quantitative approach for this research is applied and a survey was created
to collect information from the business faculty internationally. 22 Closed-ended
questions using Likert scale were included in the questionnaire. SPSS version 26.0
was utilized for data analysis. 120 responses were obtained to better provide a
comprehensive understanding of the data gathered.

3.1 Demographics and General Information

Table 1 shows the demographic information of our study. The majority of the respon-
dents were males with 54.8%; nonetheless, 45.2% were females. Furthermore, the
majority of the respondents with the academic position were lecturers with 38.7%,

Fig. 1 Research conceptual model

238 F. Al Shakhoor et al.

Table 1 Demographics
Variable Group Frequency %
information
Gender Male 68 54.8
Female 56 45.2
Academic position Professor 23 18.5
Associate professor 23 18.5
Assistant professor 29 23.4
Lecturer 48 38.7
Bahraini 76 61.3
Nationality Non-Bahraini 48 38.7
1–5 24 19.4
5–10 43 34.7
Years of experience 10–15 37 29.8
15+ 20 16.1

followed by assistant professors with 23.4%, and ending with equal weight between
associate professor and professor positions with 18.5%.

3.2 Performance Expectancy

Table 2 shows the summary statistics for a survey conducted on a set of statements
that aims to measure the impact between performance expectancy and acceptance
levels. The table shows the statements, number of responses (N), minimum and
maximum number, mean, and standard deviation. The mean results value is 4.756
which suggests that, on average, the participants’ responses are closer to the higher
end of the scale (5) rather than the lower end (1). This indicates a generally positive
sentiment or agreement towards the statement among the respondents. The standard
deviation with values ranging from 0.46 to 0.549, it suggests that many responses are
clustered closely around the mean and consistent, with relatively little deviation. This
indicates a higher level of agreement or consensus among the participants regarding
their ratings or opinions on the performance expectancy statements.

3.3 Perceived Trust

Table 3 shows the summary statistics for a survey conducted on a set of statements that
aims to measure the impact between perceived trust and acceptance levels. The mean
results value is 4.748 which suggests that, on average, the participants’ responses
are closer to the higher end of the scale (5) rather than the lower end (1). This
indicates a generally positive sentiment or agreement towards the statement among
Exploring Business Faculty’s Perception About the Usefulness … 239

Table 2 Results related to H1 : relationship between performance expectancy and acceptance level
Statements N Minimum Maximum Mean Std
dev.
I find chatbots useful in my daily campus life 120 1 5 4.75 0.523
Using a chatbot increases my chances of 120 1 5 4.725 0.549
achieving academic-related information that is
important to me
Using a chatbot increases my productivity in 120 1 5 4.75 0.506
academic difficulties
Overall, I would find a chatbot to be 120 1 5 4.8 0.460
advantageous for my campus lifestyle
Average 4.756

Table 3 Results related to H2: relationship between perceived trust and acceptance level
Statements N Minimum Maximum Mean Std
dev.
I will encourage the students to use the chatbot if I 120 1 5 4.742 0.572
feel that the content is trustworthy
I will encourage the students to use the chatbot if I 120 1 5 4.775 0.476
feel that the chatbot provides reliable information
I will encourage the students to use the chatbot if I 120 1 5 4.758 0.485
feel that the chatbot meets my expectations
I will encourage the students to use the chatbot if I 120 1 5 4.717 0.522
feel that the chatbot is secure
Average 4.748

the respondents. The standard deviation with values ranging from 0.476 to 0.572, it
suggests that many responses are clustered closely around the mean and consistent,
with relatively little deviation. This indicates a higher level of agreement or consensus
among the participants regarding their ratings or opinions on the perceived trust
statements.

3.4 Social Influence

Table 4 shows the summary statistics for a survey conducted on a set of statements
that aims to measure the impact between social influence and acceptance levels.
The mean results value is 4.725 which suggests that, on average, the participants’
responses are closer to the higher end of the scale (5) rather than the lower end (1).
This indicates a generally positive sentiment or agreement towards the statement
among the respondents. The standard deviation with values ranging from 0.510 to
0.585, it suggests that most responses are clustered closely around the mean and
240 F. Al Shakhoor et al.

Table 4 Results related to H3: relationship between social influence and acceptance level
Statements N Minimum Maximum Mean Std
dev.
People who are important in my specialization 120 1 5 4.692 0.531
think that I should use a chatbot
People who influence my behavior think that I 120 1 5 4.742 0.527
should use a chatbot
People whose opinions I value prefer that I use a 120 1 5 4.742 0.526
chatbot
A colleague’s suggestion and recommendation 120 1 5 4.742 0.510
will affect my decision to use a chatbot
I would use a chatbot because a proportion of my 120 1 5 4.708 0.585
colleagues use a chatbot in their teaching
Average 4.725

Table 5 Cronbach’s alpha

Variable Cronbach alpha
Trust levels 0.845
Performance expectancy 0.897
Social influence 0.916
Acceptance level 0.888

consistent, with relatively little deviation. This indicates a higher level of agreement
or consensus among the participants regarding their ratings or opinions on the social
influence statements.

3.5 Data Reliability

For data reliability, researchers used Cronbach’s Alpha test. Based on [8], values
from 0.90 and above are for excellent reliability. Values between 0.70 and 0.90 are
for high reliability. Values between 0.50 and 0.70 are for moderate reliability. Finally,
values from 0.50 and below are for low reliability.
It can be concluded from Table 5 that trust level, performance expectancy, and
acceptance level have high reliability, while social influence has excellent reliability.

3.6 ANOVA Test

An analysis of variance (ANOVA) test was performed to determine if the predictor

factors had a significant effect on the independent variables of interest. The model
Exploring Business Faculty’s Perception About the Usefulness … 241

Table 6 ANOVA test results

df SS MS F Significance F
Regression 3 7.793484172 2.59782806 32.2291094 0.000
Residual 116 9.350182495 0.08060502
Total 119 17.14366667

Table 7 Regression statistics

Multiple R 0.67423916
R square 0.45459844
Adjusted R square 0.44049323
Standard error 0.28391023
Observations 120

appears to be statistically significant because the F value is less than 0.01, as shown
in Table 6. This means that the dependent variable, namely acceptance level of
chatbot usage to business higher education faculty, can be accurately predicted by
the three independent variables, namely, trust level, performance expectancy, and
social influence.

3.7 R Squared

Table 7 shows the regression statistics. It can be concluded that only 45.5% and
44.1% of the independent variables (trust level, performance expectancy, and social
influence) can explain the dependent variable (acceptance level of chatbot usage to
business higher education faculty).

3.8 Hypothesis Testing

The outcomes of the regression statistics for all independent variables are shown in
Table 8. All hypotheses are accepted because their respective P values are smaller
than 0.05.

Table 8 Hypothesis testing

Code Coefficient T Stat. P value Result
H1 0.370 4.313 0.000 Accepted
H2 0.337 3.930 0.000 Accepted
H3 −0.067 −0.847 0.000 Accepted
242 F. Al Shakhoor et al.

4 Conclusion

The study aimed to investigate the perceptions of business faculty regarding the
usefulness of chatbots in higher education. The independent variables considered
were performance expectancy, perceived trust, and social influence, while the depen-
dent variable was the acceptance level of chatbot usage among business higher
education faculty. A total of 120 responses were collected and analyzed.
The study found significant relationships between the independent variables
(performance expectancy, perceived trust, and social influence) and the acceptance
level of chatbot usage among business faculty. The analysis indicated that business
faculty members perceived chatbots as useful tools in higher education.
Based on the findings of the study, which indicate significant relationships between
performance expectancy, perceived trust, social influence, and the acceptance level
of chatbot usage among business higher education faculty, it is recommended that
educational institutions consider implementing chatbot technologies to enhance
faculty engagement and support. Chatbots have the potential to improve the overall
educational experience by providing timely and accurate information, facilitating
communication, and offering personalized assistance to faculty members.
Furthermore, institutions should invest in training programs and workshops to
familiarize business faculty with the benefits and functionalities of chatbots. This will
help address any potential concerns or resistance towards adopting new technologies
and maximize the potential benefits of chatbot usage in higher education settings.
The main limitation for this study was the sample size. Although the study included
120 responses, it is important to acknowledge that the sample size may limit the gener-
alizability of the findings. To enhance the study’s validity, future research could aim
for a larger and more diverse sample, including participants from different institutions
and disciplines.
Furthermore, the study has had contextual limitations: The study focused specifi-
cally on business faculty, which may restrict the generalizability of the results to other
educational contexts or faculty members from different disciplines. Future studies
could explore the perceptions of chatbot usage across various educational settings to
provide a broader understanding of its effectiveness and acceptance.
Exploring Business Faculty’s Perception About the Usefulness … 243

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Electronic Fraud in the Age
of Technology

Mariam Al-Zain and Abdalmuttaleb Al-Sartawi

Abstract The current paper focuses on the need of educating society about elec-
tronic fraud which will reduce the cost spent for investigating the fraud and recovering
from its financial and economic impact on society. As a result, the paper recommends
considering cybersecurity and the basic rules for investigating fraud to be part of
universities’ and schools’ curriculums.

Keywords Electronic commerce · Fraud · Auditing · Digital era · Forensic

accounting

1 Introduction

Fraud it means deception the offender obtains from others unlawfully a benefit or
advantage Fraud through smart electronic devices has become a serious crime, which
has increased recently with the advancement of technology, as smart devices are
available to everyone and to different groups of society of different ages, such as
children, adolescents, and adults alike, and this is due to the ease of acquiring these
modern devices, as their prices vary between Low-priced devices and expensive
devices, but in the end they serve the same purpose [1–6].
Where different and strange phenomena appeared to us that fall under electronic
fraud, where we communicate randomly with all the devices in order to deceive their
owners by deluding them, for example, by winning sums of money from a bank or
winning gifts from a commercial store, and the aim is to lure the victims to obtain
their confidential information Which enables them to steal their money and hack
their bank accounts, or offer them various types of prohibited drugs, such as drugs

M. Al-Zain
Freelancer, Manama, Bahrain
e-mail: [email protected]
A. Al-Sartawi (B)
Ahlia University, Manama, Bahrain
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 245
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_18
246 M. Al-Zain and A. Al-Sartawi

at low prices, targeting teenagers to get involved in methods that do not benefit the
person himself or society [7–15].
The seriousness of this crime lies in human corruption, which is the basis of society
and its renaissance in its various categories, where children and adolescents are at an
insufficient age to be aware of the distinction between things that are in their interest
or not, as it is easy to lure them and influence them, which leads to the deviation
of their ways to ways that do not benefit them In view of the great importance of
this issue in preserving the structure of society and the large spread of this type
of crime, the causes of which are due to the technological development witnessed
by the world, there was an urgent need to increase the awareness of members of
society and to stipulate strict laws for this type of crime. The importance of the study
shows the extent of the seriousness of crimes arising from Internet fraud and modern
technology, which is still increasing, as the victims of this crime are not confined to
a specific group but have become targeting most of society in its various categories,
whether from natural individuals of different ages, including children, adolescents
and adults, and legal individuals such as companies and banks [16–23].
As it has become important to address this type of crime, some countries left this
crime to the general rules of the crime of fraud and did not organize a special text
for it, which raised legal problems before jurisprudence and the judiciary [24–27].

2 Literature Review

According to Bahraini law the Fraud can be defined as Seizing movable money or a
document owned by others by deceiving them and forcing them to hand them over to
other people using fraudulent methods with the aim of owning and possessing them.
Moreover, the online fraud can be considered as the use of a service or program
from the Internet to reach potential victims and carry out various fraud operations on
them like using e-mail—websites—chat rooms. Furthermore, the Electronic fraud/
phishing summarized as a form of exploitation, deception, and illegal electronic
attacks committed by electronic criminals in order to entrap individuals to steal,
extort, or for other purposes, and the penetration process usually takes place when
individuals visit websites, chat rooms, online stores, blogs, or smart applications
During this stage, the victim is ambushed in order to catch and trap him, after which
the criminal achieves his intention and goal that he wants illegally by attacking
people’s data and customer accounts [28–33].
Electronic fraud can be characterized by the ability to reach many people without
actual meetings which known as online scammer, the fraudster can practice fraud
wherever he is using his modern technical devices, whether he is near the victim or
very far, and the risk rate in this crime is very low compared to fraud practiced on
the ground and compared to other crimes [34–38].
Electronic Fraud in the Age of Technology 247

Usually, we have many types of the online fraud in electronic devices, in the most
modern electronic devices, the Internet is used, where electronic fraud is done by
using various Internet services such as e- mail service, the web, chat rooms and other
services that are constantly renewed and appear in new images [39–46]. Fraud takes
various forms according to the diversity of Internet services and the more modern
means and services develop new pictures appear to us, and among the most prominent
pictures of fraud:
1. Impersonation and Identity: [4, 35, 47, 48]
Where the fraudster impersonates a person who may be influential in society and
is important, or he may target the identity of one of the victim’s acquaintances,
as he communicates with the victim based on the impersonation of others and
asks them for help with sums of money or personal data to be able to steal their
money and hack their accounts [49].
2. Email Scams: [36, 50–52]
A method of electronic fraud in which the fraudster masters the extent of his
ability to manipulate the victim and convince him of the authenticity of the
message, as fake and misleading emails or SMS text messages are sent for
the purpose of deceiving the victim and obtaining personal information from
him, sums of money or credit card number where the temptation is the victim
by winning a prize or winning an amount of money from a bank and other
deceptions[53].
3. Winning a Prize: [54–57]
According to this type of fraud, the fraudster deceives the victim with a specific
message that he has won a prize in a competition or contest he has never partici-
pated in, or by shopping in one of the large stores in the market that most people
frequent, where he asks the victim to pay a fee Certain to release the prize as
insurance, freight or tax and thus the scammer earns money[58].
4. Online Auction Fraud: [59–62]
It is well known that there are official public auctions that take place in the
presence of the place and the inspection of the product, but with the development
of technology and the availability of the Internet, electronic auctions appeared
to us through social media through live broadcasts, as there is a high rate of
fraud and fraud in this type of auctions, as the buyer cannot preview the product
Before purchasing it, the product may be replaced with another other than the
one he saw, and the product may not reach him at all, as it is required to pay
money through an electronic means, in order to deserve to buy the product, but
the person may lose his money and the product does not reach him and he cannot
recover his money[25, 63, 64].
5 Unknown Numbers and WhatsApp Messages: [35, 49, 65, 66]
Where calls are made by unknown numbers, or a message is sent in the WhatsApp
application that misleads the victim that he won a prize, whether a prize from the
bank or a voucher and other prizes, and personal information is requested from
248 M. Al-Zain and A. Al-Sartawi

the victims, as the fraudster can penetrate their bank accounts and withdraw large
sums of money from them, but it is not limited to that, but there are messages
on WhatsApp selling contraband, as teenagers become easy prey for this type of
fraud, motivated by experience and reckless decision-making [67, 68].
5. Fraud Selling Counterfeit Medicines and Cosmetics: [56, 69, 70]
Recently, there have been accounts on social media that sell medicines and beauty
products at a cheaper price than pharmacies and trusted commercial places, as
they mislead individuals that their products are original and at a low price, but it is
quite the opposite, as medicines are not manufactured according to the medical
specifications of the medicine, which negatively affects health. The buyer, as
well as for cosmetics that negatively affect the buyer, which may cause him a
rash and eye infections and other matters for not observing medical materials in
manufacturing.
The users can protect their selves by learn the correct use of the social media
and the Internet, the can educate themselves to not enter unsafe sites, enhance the
security procedures for the electronic systems of the institutions and companies to
reduce the expected cyber-attacks that result in the theft of information and data from
individuals, not following the fake online stores that lead to loss of money, and to be
aware about the digital currency fraud, which is one of the most prevalent types of
fraud in the past few years and is considered one of the clean types of fraud in which
the individual often cannot recover his money from the fraudster [5, 39, 71–74].

3 Conclusion

Educating members of society in different age groups of children through educating

them in schools from the kindergarten level and adolescents as well as through
lectures in schools that aim to educate them to prevent falling into the trap of these
crimes [47, 51, 60, 75, 76]. Students must be prepared to deal with these transactions
after they finish school stage, as well as adults by highlighting the role of visual
media through targeted and educational videos and via radio and television, as well
as written advertising such as spreading awareness through road advertisements and
articles in daily local newspapers. The trap of these crimes, as well as urging countries
to legislate a particular text that criminalizes this type of crime and not to leave it
to the general rules and increase the punishment to achieve general deterrence for
individuals, and it is also the responsibility of companies and banks to educate their
customers in dealings and warn them not to respond to suspicious messages.
Electronic Fraud in the Age of Technology 249

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The Level of Students’ Satisfaction
with Their Academic Performance
in e-learning Through Learning
Platforms

Samia Mousa Mosleh, Abdul Rahman Afzal, and Rawan Siaj Jubeh

Abstract This study aims to explore the degree of student satisfaction concerning
their academic performance within e-learning platforms. To achieve this, a compre-
hensive survey of 16 carefully structured questions was disseminated among 100
undergraduate students at Al-Zarqa University. The results indicated a modest level
of satisfaction among students regarding their academic achievement within these
digital learning environments. Given these findings, this research underscores the
critical necessity for further in-depth studies to determine the comprehensive scope
of student satisfaction associated with online learning platforms. This study also
highlights the pressing need for higher education institutions to innovate and refine
these e-learning platforms actively. Such efforts are intended to bolster enhanced
learning experiences and ultimately contribute to improved academic outcomes in
online educational contexts.

Keywords Satisfaction · e-learning platforms · Academic performance

1 Introduction

Learning and education are the basis for the development, survival, and advance-
ment of nations throughout the ages, and the success of the educational and learning
process is reflected in the progress of nations and the building and advancement of

S. M. Mosleh
Zarqa University, Zarqa, Jordan
A. R. Afzal (B)
University of Business and Technology, Jeddah, KSA, Saudi Arabia
e-mail: [email protected]
R. S. Jubeh
Palestine Ahliya University, Bethlehem 1041, Palestine
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 253
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_19
254 S. M. Mosleh et al.

societies. Accordingly, there has become an urgent need for development in educa-
tion, and keeping pace with the change taking place in the informatics era in which
we live today, as a result of several successive and rapid technological developments,
such as the development of computers, smart devices, communications, and various
applications whose effect has positively affected all areas of life in general, and
education in private [1].
In an attempt to keep pace with this change, technology-based e-learning has
emerged, which is one of the most important modern trends in the education and
learning system that keeps pace with these developments. It is also a kind of modern
technical revolution in teaching methods. which abounds with the latest technology
in terms of hardware and software in the education process; [1–5].
Attar and Kansara [6] defined e-learning as a mechanism of learning and teaching
that relies on providing knowledge to students and achieving interaction between
students and teachers on several electronic media such as the Internet, satellites,
and CDs, to facilitate the learning and teaching process. One of the advantages of
this type of education is the opportunity for self-learning for students anywhere, by
providing distance courses, and this is what makes this type of advanced education
a tool for widespread use [7–9].
E-learning manifests in two distinctive styles: synchronous and asynchronous.
In synchronous e-learning, direct interaction between the teacher and students is
prevalent. The teacher presents the educational material directly, allowing students to
engage in dialogue, pose queries, and receive immediate responses from the teacher.
Contrarily, asynchronous e-learning is characterized by indirect interaction, primarily
facilitated through study materials and learning resources provided by the teacher
on the educational platform [10]. In this self-guided model, students can access the
platform at their convenience and learn at their own pace without real-time interaction
with the teacher. In response to these methods, Blended Learning (BL), or hybrid
learning, has emerged as a progressive approach. It amalgamates the strengths of both
online and traditional learning, intending to provide learners with a more engaging
and cooperative learning experience [11–13].
The advantages of e-learning are identified as follows [14]:
• Students can continue their education regardless of time and place.
• Contribute to equal opportunities and provide education to all students.
• Through it, interactive lessons can be created that provide students with many
advantages, such as; Instant feedback, sharing and discussing ideas, and get instant
evaluation and assessment.
Ghada [15] added that one of the advantages of e-learning is that it allows all
workers to complete their university studies easily and achieves fun, excitement, and
flexibility in learning, and allows teachers to show creativity and art in presenting
and designing scientific material, and it also strengthens the relationship between
teachers and students, and students among themselves.
The Level of Students’ Satisfaction with Their Academic Performance … 255

Through e-learning, students can use many computer programs and technical
means that help achieve educational goals. This is because it possesses capabili-
ties that create an interactive environment in education that attracts students’ atten-
tion, arouses their interest, and encourages them to carry out scientific activities and
required tasks and achieve educational and learning goals [1, 16].
At present, the spread of e-learning in all its synchronous and asynchronous forms
has increased, due to the previous events represented in the outbreak of the Coron-
avirus pandemic, and the subsequent decisions of closing educational institutions in
different countries of the world, including Jordan, which resulted in the discontin-
uation of millions of students from going to schools and universities. Countries of
the world, including Jordan, resorted to directing to amending educational policies
and plans and moving to e-learning in all its forms to maintain the progress of the
educational process.
Accordingly, some courses continued to be offered to students through the e-
learning platforms in educational institutions in Jordan, such as universities and
others, and it became associated with traditional education due to its advantages and
the benefits it brought to students. Zarqa University (ZU) in Jordan has also relied
on the Microsoft Teams application and Moodle as platforms for student education,
as Moodle is a free digital platform that integrates with other platforms to allow
follow-up of student learning and direct their learning, design, and correct electronic
tests, and provide techniques for communication and interaction between students
and teachers, so it is considered an integrated educational environment It includes
the inclusion of various downloadable lectures and files [9].
Al-Enezi [17] refers to the distinctive characteristics of the Microsoft Teams
platform in education, as this interactive platform allows the ability to send an instant
message, go to a video call, share the screen with students, collaborate by sharing
conversations and files, and group communication with a team via video or calls.
And it allows the display of applications such as PowerPoint, and allows learners to
work collectively and share files, in addition to the ease of communication through
communication networks, and this type of learning provides terms of techniques such
as verbal and text conversation, and communication with learners in their places and
thus increases the opportunities for bonding between students and teachers and helps
create new environments for collective thinking and problem-solving [18–21].
The success factors of the virtual classes provided by these platforms are
represented in the factors and requirements of the educational process: such as;
Choosing appropriate content, activities, assessment methods, technological factors,
and requirements: such as; The availability of devices, equipment, and the appropriate
electronic environment, in addition to the factor of self-efficacy and its relationship to
distance education among students and the achievement of teaching goals, which is
represented in the vital interaction in education, managing the educational situation
well, and facilitating the learning process [22].
Satisfaction with the academic performance of students expresses whether their
goals and expectations from e-learning through learning platforms will be achieved
or not. Academic performance is also considered a criterion by which a decision can
be made regarding educational program effectiveness and the extent of interaction
256 S. M. Mosleh et al.

with it. The factors affecting the academic performance of students are determined
by cognitive factors related to the individual, such as interaction, intelligence, infor-
mation processing method, and motivational factors; Such as internal motivations
and external stimuli for learning, and a combination of emotional and behavioral
factors such as academic engagement that are closely related to improving the overall
academic performance of students [7].

2 Research Problem

E-learning has witnessed in recent years a lot of developments at the global and local
levels, and it has transformed from just an idea in the imagination of educators into
a practical reality that plays a key role in achieving human development and the
development of the educational process in many countries of the world [7, 23]. The
development of e-learning came in different forms and shapes, by employing the
means of communication and modern media, which made the process of teaching
and learning easy and accessible to all.
Given the importance of the student in the educational process and the impor-
tance of his involvement and acceptance of the idea of using e-learning platforms, it
constitutes an interactive environment for him, that replaces face-to-face learning and
gives a picture that matches direct learning in terms of achieving educational goals,
an urgent need arose to ensure the ability of these platforms to achieve students’
knowledge outputs, mental abilities, and various skills.

2.1 Research Questions

The research attempts to answer the following main question:

What is the level of satisfaction of students regarding their academic performance in
electronic learning through learning platforms?

2.2 Research Objectives

This research aims to:

Know the level of satisfaction of students with their academic performance in
electronic learning through learning platforms.
The Level of Students’ Satisfaction with Their Academic Performance … 257

3 Study Terminology

3.1 Satisfaction

E-learning platform. An interactive system linked to the teaching–learning process.

This system relies on the existence of a digital electronic environment that presents
courses and activities to students through electronic networks and smart devices
[16, 24].
The researchers define it procedurally as an integrated educational platform
provided by (ZU) to its students, through which students acquire several skills and
knowledge by employing technology sync synchronously or asynchronously in the
Microsoft Teams platform and Moodle.
Performance. The term performance is applied to the ability to do something,
especially if it requires skill or the implementation of part of a work or activity in a
specific way.
Academic performance. Al-Tabal [5] defines it as the knowledge gained as a
result of teaching, and it is measured through achievement tests that aim to measure
previous learning in scholastic areas such as reading and writing. Academic perfor-
mance is a measure of students’ abilities; which expresses what students have learned
during the educational process. It also assumes the student’s ability to respond to
educational stimuli.
It is defined procedurally as the total score obtained by students on the academic
performance scale specially prepared for this purpose.

4 Previous Studies

The aim of the [4] study was to measure the degree of satisfaction of Kuwait Univer-
sity students with the experience of distance learning during the COVID-19 pandemic
from their perspective. The study sample consisted of (2035) participants, and the
study tool was a questionnaire, informal personal interviews, and focus group discus-
sions to collect data. The results indicated that the degree of students’ satisfaction
with distance learning came at a moderate level in all study indicators.
Chtouh [20] conducted a study aimed at identifying the reality of the uses and
problems of dealing with the Moodle platform among students of the Department
of Arabic Language and Literature at M’sila University, and the results showed that
the majority of students (80%) of them use the moodle platform, and this indicates
the spread of e-learning at M’sila University, The study also revealed that there are
some problems facing the university student, which it is hoped will be solved through
recommendations and proposals.
Miqdadi [8] aimed to reveal the perceptions of secondary school students in public
schools in Jordan about the use of distance education in light of the Corona crisis and
its developments. The results of the study showed that there is a significant positive
258 S. M. Mosleh et al.

effect of the use of distance education in light of the Corona crisis, and there are
no differences in the estimates of respondents on average performance as a whole
according to the gender variable.
As conducted by [25], a study aimed to identify the possible factors that affect
students’ academic performance and satisfaction with online learning platforms.
The sample included 243 higher education students who use learning platforms.
The results showed that students’ backgrounds, experiences, collaboration, interac-
tions, and independence had a positive impact on their satisfaction. Additionally,
students were able to engage in processes of recall, analysis, and understanding,
which enhanced their academic achievement.
Al-Bitar [18] conducted a study aimed at identifying the effectiveness of using
distance education in developing academic achievement, and the attitude towards
distance education in the educational technology course for general diploma students
at the Education Faculty at Assiut University. The results showed the effectiveness of
using distance education in developing academic achievement and the trend towards
distance education.
Umek et al. [26] aimed to study the introduction of the integrated learning system
using Moodle as part of the teaching process and its impact on the academic perfor-
mance of students in the Faculty of Administration at the University of Ljubljana,
Slovenia. The study was conducted on two groups of students, one of which was
taught using the conventional face-to-face method, while the other group had Moodle
integrated into their lectures. The results revealed a significant improvement in the
academic performance of the students, where the average grades increased after the
introduction of the Moodle platform.
By reviewing previous studies related to the subject of the research, it became clear
that there are studies that dealt with distance education and its impact on students’
learning, achievement, and attitudes. However, most of the studies dealt with distance
learning and e-learning during the Corona pandemic period specifically, and the
current research is one of the researches that examine the issue of learning through the
learning platforms offered in the education sector now after the end of the pandemic
and the return of the education sector and all sectors to normal, and the continuity of
learning through the platforms in some courses.

5 Method and Procedures

5.1 Research Methodology

The research followed the quantitative approach due to its suitability to its subject
and objectives. The research sought to identify the level of students’ satisfaction with
their academic performance in electronic learning through learning platforms.
The Level of Students’ Satisfaction with Their Academic Performance … 259

5.2 Research Community

The research community consisted of all (ZU) students who study (completely
electronic) courses, for which 30% of the total courses of the study plan are allocated.

5.3 Research Sample

A total of (100) male and female undergraduate students from Zarqa University were
randomly selected for the first semester of the academic year 2022/2023. It is worth
noting that (95) students responded to the study.

5.4 Research Tool

To assess the level of student satisfaction with their academic performance in e-

learning via learning management systems, the researcher developed a questionnaire
consisting of (25) items. The initial form of the questionnaire was based on a review
of educational literature related to student’s opinions and perceptions of e-learning.

5.5 Validity of the Scale

The scale was presented to a group of (13) expert reviewers to ensure the face validity
of the tool and its suitability for the research purposes and goals. The reviewers
examined the language clarity, and meaning, and suggested adding, replacing, or
deleting items as necessary. The recommended modifications were implemented,
which resulted in the final version of the scale consisting of (16) items after (9) items
were removed due to overlapping content with other items.

5.6 The Stability of the Questionnaire

The questionnaire stability was confirmed by the test and re-test method, by applying
it to (30) male and female students from the research community, from outside the
sample, with a two-week interval between the first and second application, then the
Pearson correlation coefficient was calculated between the sample responses in both
applications. Where the value of the correlation coefficient was (0.83), which means
that the tool has a high degree of stability for its application. The stability of the
internal consistency was also calculated using the Cronbach alpha equation on the
260 S. M. Mosleh et al.

Table 1 The statistical standard used to judge the arithmetic mean (Mean) values
High Medium Low Mean
3.67–5 2.34–3.66 1–2.33

previous survey sample, and its value was (0.93), and this value was considered a
good indicator of the stability of the tool for this research.
To measure the opinions of the respondents, the following statistical criterion was
used (Table 1).

6 Research Results and Discussion

What is the level of student satisfaction with their academic performance in e-

learning through learning platforms? To answer the research question means and
standard deviations were calculated to determine the level of student satisfaction with
their academic performance in e-learning through learning platforms. The results are
shown in the following Table 2.
It can be observed from Table 2 that the level of student satisfaction with their
academic performance in online learning through learning platforms (with an overall
average value of (2.895)) indicates that the level of student satisfaction is moderate.
The paragraph (I feel satisfied with my results in the courses I studied through
e-learning platforms) got the highest (Mean) with (a 4.2) value with a high score.
This might be due to that e-learning platforms provide many technologies, means,
and resources that help the student to choose between them according to his needs,
tendencies, and ability to learn. Learning through learning platforms provides a rich,
flexible, and dynamic learning environment that helps the student to learn effectively
and in the time that suits him, in addition to that the platforms provide the student
with the opportunity to repeat, train, and constantly review the scientific material
presented, and this, in turn, enhances the information among students and achieves
learning outcomes in the best way.
The teachers also provide educational content with activities that attract the
student, including texts and illustrations, allowing him to learn according to his
ability freely and without restrictions, which contributed to the development of posi-
tive attitudes towards learning in general, and the development of the knowledge
aspect related to the content. The learning platform (Microsoft Teams) provides an
opportunity to immediate feedback to the learners, which prompted them to identify
their weaknesses and thus inquire and communicate with teachers first to enhance
explanation and clarification. The results of this research are consistent with the study
of [21], which found the effectiveness of interactive e-learning platforms in devel-
oping internet use skills and reducing cognitive burden and confirmed that e-learning
platforms increase academic achievement.
The Level of Students’ Satisfaction with Their Academic Performance … 261

Table 2 (Means) and (SDs) of the level of student satisfaction with their academic performance in
e-learning through learning platforms
Rank Item (Mean) (SD) Degree
1 I feel satisfied with my results in the courses I took through 4.2 0.2 High
e-learning platforms
2 Learning through the platform helped me effectively achieve 4.1 0.01 High
the objectives and learning outcomes of the lesson
3 The platform helped me understand the scientific material 3.9 0.015 High
clearly
4 My performance and achievement in periodic tests and 3.75 0.01 High
exams through the platform are better
5 Learning through the e-learning platform gave me the skill of 3.64 0.03 Medium
critical thinking
6 Learning through the e-learning platform developed my 3.43 0.01 Medium
self-thinking skills
7 Learning through the platform has given me the skill of 3.25 0.14 Medium
collaborative learning with colleagues
8 Learning through the platform increased my motivation and 3.1 0.02 Low
enthusiasm for learning
9 Learning through the platform increased my confidence in 2.89 0.002 Low
my ability to learn
10 Learning through the platform gave me the ability to analyze 2.67 0.01 Low
information
11 The e-learning platform helped me commit to submitting my 2.44 0.01 Low
homework on time
12 Test questions and exams are answered through the platform 2.1 0.01 Low
honestly and credibly without anyone’s help
13 Learning through the platform demonstrated my abilities and 1.9 0.14 Low
potential
14 The platform increased my positive attitude toward education 1.76 0.03 Low
16 The e-learning platform allowed me to allow media and draw 1.65 0.03 Low
information from its sources
17 Learning through the platform has developed my skill in 1.54 0.2 Low
searching for and investigating information
The general (Mean) 2.895 0.07 High

The paragraph (Learning through the platform has developed my skill of searching
and investigating information) got the lowest (Mean) and value (1.54) a low score.
This may be due to the effort made by the teacher in helping students to learn through
electronic learning platforms, thus presenting the scientific material in more than one
template, and presenting the scientific material at length and detail, so that the student
reaches the stage of sufficiency with the presented material without the effort of
searching for other sources of information to clarify ideas. and meanings. This result
is consistent with the study of [14, 18] (Kanan et al. 2020), all of which indicated
262 S. M. Mosleh et al.

the positive impact of distance education and e-learning on increasing achievement

and improving performance.

7 Recommendations

Based on this study, following recommendations are proposed:

• There is a need to work on developing educational platforms that align with the
needs and expectations of students in all educational sectors and institutions.
• There is a necessity of conducting more studies to determine the level of student
satisfaction with learning through online learning platforms, to develop these
platforms by higher education institutions.

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International Accounting Standards
Technique: Need of Related Party
Disclosures (IAS 24)

Adel Sarea, Azam Abdelhakeem Khalid, Zakir Hossen Shaikh,

Amira Kaddour, Ahmad Mohammad Obeid Gharaibeh, and Ahmad Rafiki

Abstract The purpose of this study is to review the International Accounting Stan-
dard (IAS 24) “Related Party Disclosures”. The theoretical literature review helps to
understand the need of Related Party Disclosures. “A review method was chosen to
explore the “IAS 24. Related Party Disclosures are needed to improve the quality of
disclosures as well as the role in providing the necessary information to all related
parties”. This study should be relevant to accounting setter institutions considering
jurisdictions in Related Party Disclosures.

Keywords International accounting standards · Related party disclosures · IAS 24

A. Sarea (B)
College of Business and Finance, Ahlia University, Manama, Kingdom of Bahrain
e-mail: [email protected]
A. A. Khalid
Department of Accounting & Finance, Faculty of Business Management & Professional Studies,
Management & Science University, Shah Alam, Malaysia
Z. H. Shaikh
Department of Finance and Accounting, College of Business Administration, Kingdom
University, Riffa, Kingdom of Bahrain
A. Kaddour
Department of Business Administration, King Khalid University, Abha, Saudi Arabia
A. M. O. Gharaibeh
Department of Accounting and Financial Science, College of Administrative and Financial
Science, Gulf University, Sanad 26489, Bahrain
A. Rafiki
Faculty of Economics and Business, Universitas Medan Area, Medan, Indonesia

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 265
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_20
266 A. Sarea et al.

1 Introduction

International Financial Reporting Standards (IFRS) has been issued by International

Accounting Standards Board (IASB). There are 41 accounting standards issued
by IASB [8]. IAS 24 (Related Party Disclosures) are one of the accounting stan-
dards issued by International Accounting Standards Committee (IASC) in 1984 [8].
This standard argued about various issues identified with nine measurements, which
incorporate (General necessities, communications with control relationship parent,
transactions with mutual control, “transactions with affiliates, relations with asso-
ciates, dealings with joint venture, contacts with management personnel, trades with
government related entities, understanding IAS 24) [1, 7].
The standard of IAS 24 is known as the standard of Related Party Disclosures
towards more effective income statements and balance sheets that have been affected
by the existence of different transactions such as commitments, outstanding balances
and others [12, 13].
IAS 24 is one of the important International Accounting Standards that provide
vital information and data regarding entity’s outstanding balances and different trans-
actions related with several parties involved. This standard is related with different
individuals and their respective disclosures such as directors’ compensation and
outstanding balances [9, 10]. The IAS 24 has been applied on key personnel of
the entity that have control, significant influence on the management of the entity.
The IAS 24 has been also applied on entities such as subsidiaries, parents, fellow
subsidiaries, joint ventures, entities with significant influence, and employment
benefit plans [8].
The goal of IAS 24 is to safeguard that an entity’s financial statements contain the
revelations required to notice the attention to the prospect that its “financial position
and profit or loss may have been influenced by the presence of related parties and by
dealings and outstanding balances with such parties”.
“Transaction between entities that are considered related parties must be
adequately disclosed in financial statements. Such disclosures have been a common
feature of financial reporting, and the most accounting standards-setting bodies have
imposed similar mandates [5]”.
“The review technique of IAS 24 are extends to further emphasis on international
accounting studies by several scholars [2, 4, 5, 13–16], in order to address the issue
of the ninth dimensions of the IAS 24, which include (General requirements, trans-
actions with control relationship parent, transactions with joint control, transactions
with subsidiaries, transactions with associates, transactions with joint venture, trans-
actions with management personnel, “transactions with government related entities”,
understanding IAS 24).
International Accounting Standards Technique: Need of Related Party … 267

2 Literature Review

International accounting standard 24 [8] initially came out in 1984 to elaborate the
problems caused by related party transactions (RPTs). It became effective for the very
first time on January 1st of 1986. It defines the role of RPTs and restricts the misuse
or fraudulent use of the RPTs [8]. IFRS [8] states that the transactions held between
the company and its subsidiaries, officers, owners, affiliates directors or other entities
controlled and owned by the officer, or their family members of that company will be
defined as related party transactions [8]. It also considers the acquisitions of assets
and sales of assets, sales of services, sales of goods, loan guarantees, cash payments,
and other transactions with the related parties as RPTs. The purpose of the accounting
standards that govern how to present the RPTs, is to reflect the change occurred in
the financial position due to the related parties’ transactions [6]. The early stage of
the IAS 24 development was the.
Exposure Draft E25 issued by IASC in March 1983, it started working on January
1st of 1986 and was adopted by IASB in 2001 and 2009 [8]. The most updated edition
being on January 2011, which further simplified the description of RPTs and gave
temporary exceptional cases about “government related entities [8]”.
There are other and more extensive related parties of the reporting entity
include [17]:
• Got a separate of full control of or joint control above %50 of the reporting entity.
• Can influence the %20 to %50 over the reporting entity.
• Being an important management member in reporting entity or its parent entity
or the other related party.
• Having the same participation in the same group as that of reporting entity.
• Being an associated subsidiary of reposting entity May be a joint venture of
reporting entity.
• Has as after employment benefit plans for its employees or the related parties.
• Is co controlled or separately controlled by related person of reporting or the
related entity.
However, the two parties will not be considered as related parties if they have a
mutual joint venture or having same important management members or key member
who can influence the other entity IAS 24.11 the accounting standards for RPTs [8]
are to strengthen the market regulations of capital market andprocedure of approvals
on RPTsand developed plans for providing guidelines of best practices of RPTs [11].
The related party transactions are considered as the mostly used as opportunistically
and hence caused a business failure. In countries where the business transactions
are likely to be more susceptible in concern of corruption the periodic disclosure
is more acceptable in comparison with the countries with strong law enforcement
of shareholders rights and protection of these rights and having control over the
corruption, have a transparent RPTs disclosure instead of earlier discussed [4].
There is an amendment which tells that any entity which is providing the manage-
ment services or “management personnel to the reporting entity (or to parent of
268 A. Sarea et al.

reporting entity)” will be known as a related entity. According to this amendment

it may be required that the expenses made on these management personnel and the
personnel services given by a separate entity of management should be disclosed
separately. However, this amendment also clarifies that it is not necessary to report
the compensation payable or paid from the management to the employees or to the
directors of the company according to the limits set in the [3, 8].
The reporting entity must disclose name of its parent whether there are transac-
tions between subsidiaries and its parent or not. if it doesn’t apply on it then it should
mention the name of final authority of control which can produce the financial state-
ments for general public uses also “the name of the next senior authority or parent
that can also do so should also be mentioned for sure [8]”.
In general, a common feature of business activities and the commerce is that the
“transactions with joint ventures, subsidiaries and associates” are involved including
the transaction of management personnel is known as the related party relationships.
It can be so much “effective on the financial performance and the financial position
of the company” because of fact that related party have a strong influence over
transaction with a separate entity. Many concerns were raised regarding the cost
and benefit implication of huge disclosure about the transaction which are very
improbable to have influenced by the related entity relationship in the situation [14].
IASB released an updated exposure drafts in December 2008 to propose the
amendment in the IAS 24 regarding the relationship with the state. The main purpose
the amendments were to simplify the requirement of disclosure which is applied to
those enmities which are jointly controlled significantly affected by state or controlled
according to [3] (Fig. 1).
The proposed structure is designed based on the literature review.

Fig. 1 Developed by authors. Source Authors

International Accounting Standards Technique: Need of Related Party … 269

The reason of the “disclosures required by IAS 24” is to draw attention to the
probability that the entity’s financial statements may have been influenced by the
presence of “related parties and by transactions and outstanding balances with such
parties”.
“The reporting company is the individual that is preparing its financial statements”.
In the definition of the concept associated party, an associate includes affiliates of
the associate and a joint venture” includes subsidiaries of the joint venture. A related
party transaction represents a transfer of resources, services, or obligations between
a reporting entity and a related party, regardless of whether a price is charged.

Related party web based on capital relationships

Example: parties related through other entities Source: iFRS community.com

3 Findings and Recommendation

“IFRS Accounting Trends & Techniques gives a close aspect at the revelation
practices of global bodies that have previously started the implementation of IFRS”.
Entities should follow globally accepted accounting technique IAS 24 for “related-
party disclosure” to safeguard quality financial reporting. The entities should enlarge
270 A. Sarea et al.

their focus on “disclosure of related-party” to fulfill the need of different stakeholders

and other related parties. Regulatory authorities have to be active in safeguarding the
related-party disclosure for retaining the worth financial reporting by entity.

4 Conclusion

The scope of this standard is to understand the related party’s disclosures, trans-
actions, outstanding balances, any special commitments related to the entity. The
disclosure contains the short-range and post employee benefit, termination, share
based paybacks and other any long-term significant profitable dealings. “The related
party transactions as described in the IAS 24 standard” should be implemented across
the organization in which all executive members of the company such as key manage-
ment personnel should be declared their liabilities and all other short- or long-term
benefits that they have been utilized from the company’s assets. In this regard, the IAS
24 standard should be implemented, and related party transactions must be presented
in financial statements in order to enhance the reliability of assets and performance
in the market.

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The Impact of Applying the Elements
of Administrative Creativity
in Improving the Quality of Services
in the Ministry of Education Center:
A Case Study

Majed Abdul-Mahdi Massada, Enas Bashir Fayez Al-Badr,

Mohammad Kanan , Hala Alsabatin, and Imad AlZeer

Abstract The primary objective of this research is to explore the impact of incorpo-
rating administrative creativity elements on service quality enhancement, focusing
on employees at the Central Jordanian Ministry of Education. The investigation
is structured around two distinct variables: the independent and dependent vari-
ables. The independent variable represents administrative creativity, gauged through
four key aspects: fluency, flexibility, risk-taking, and analytical ability. Conversely,
the dependent variable’s service quality is evaluated through five parameters: reli-
ability, responsiveness, tangibility, safety, and empathy. Data for the study was
collected through a comprehensive 48-item questionnaire designed meticulously to
measure the variables. The study sample comprised 255 male and female employees
working within the public administration sector. A descriptive analytical approach
was adopted for the research, utilizing a variety of statistical tests performed via
the SPSS software. The findings revealed a series of insightful results. Most notably,
combined administrative creativity dimensions—fluency, flexibility, risk-taking, and
analytical ability—had a significant statistical effect on the service quality within
the Jordanian Ministry of Education. However, not all dimensions of administrative
creativity had an equal effect. The results indicated that flexibility did not signifi-
cantly influence service quality. In contrast, the analytical ability dimension held the

M. A.-M. Massada (B) · E. B. F. Al-Badr

Faculty of Economics and Administrative Sciences, Zarqa University, Zarqa 13110, Jordan
e-mail: [email protected]
M. Kanan
College of Engineering, University of Business and Technology, Jeddah 21448, Saudi Arabia
e-mail: [email protected]
H. Alsabatin
Wichita State University, Wichita, KS 67260, USA
I. AlZeer
Palestine Ahliya University, Bethlehem 1041, Palestine
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 273
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_21
274 M. A.-M. Massada et al.

greatest explanatory power over service quality. The study, therefore, recommends
enhancing the Ministry’s administrative flexibility. This could be achieved through
open dialogues with employees, actively listening to their perspectives, and imple-
menting feasible and ministry-aligned ideas—even if they challenge the existing
administrative views. It also suggests the administration should remain highly flex-
ible with its procedures and plans, continuously evaluating them, and not hesitate to
change these processes when superior alternatives become apparent.

Keywords Administrative creativity · Service quality · Ministry of education ·

Jordan

1 Introduction

In the current era, organizations are experiencing an accelerated pace of change

unprecedented in history. This transformation is fueled by a multitude of factors,
such as evolving technology, socio-political shifts, economic changes, and the advent
of globalization, open markets, heightened competition, and constrained resources.
Amidst this changing landscape, public sector organizations undergo profound
structural shifts across all operational facets.
The necessity for these shifts stems from the imperative to adapt and thrive amidst
change, focusing on prioritizing customer needs and satisfaction, which is now a
central metric for institutional success. In fact, the survival and prosperity of any
institution are directly tied to customer satisfaction with its services [1–3].
Service quality has emerged as a critical competitive strategy across govern-
mental and private organizations. This new focus has transformed organizations into
competitive entities within a relatively free and open marketplace [4–6]. Today’s
customers are spoilt for choice and often consider service quality a fundamental
selection criterion. This necessitates that organizations’ departments grasp customer
needs effectively to enhance satisfaction and foster loyalty—an essential tool to
remain competitive in the customer-centric modern market [7].
As rapid changes continue to define the operational landscape, traditional manage-
ment practices still need to be improved for improving institutional performance and
enhancing service provision. Institutions across various sectors, including education,
require greater creativity to adapt to globalization and rapid technological advances.
The focus is on increasing efficiency and effectiveness through advanced, flexible
administrative practices and a clear vision for the future.
It is of paramount importance to harness administrative creativity to enhance
service quality by formulating efficient and effective strategies. This necessitates
that organizational leaders and decision-makers commit significant time to envi-
sion future scenarios. Adopting such an approach will equip them to surmount the
The Impact of Applying the Elements of Administrative Creativity … 275

myriad challenges and problems that contemporary employees confront in organi-

zations and to devise suitable solutions [8]. Creativity is an indispensable ingre-
dient in achieving excellence and superiority across many diverse fields. Its defi-
nition, however, fluctuates depending on its contextual usage. In certain institu-
tions, creativity is intrinsically tied to talent [9]. Therefore, the thinking process,
a quintessentially human activity, demands concerted and distinguished efforts from
various parties for nurturing and learning [10].

1.1 Study Problem and Questions

Education constitutes the core of prevailing educational systems in many countries

worldwide. This importance is underscored by numerous considerations, notably
the development plans and varied programs that rely on a skilled workforce with
high learning capacity, efficiency, and creativity [11]. Both individual and institu-
tional productivity can be enhanced when creativity is encouraged throughout the
organization.
Jordanian state institutions, which fundamentally revolve around service provi-
sion, require effective management of their knowledge assets to offer superior quality
services. These entities need to bolster their efforts and fully utilize and develop their
resources, aiming to elevate the service quality within the Ministry of Education.
An observation by the researchers indicated a deficiency in applying administrative
creativity within Jordanian educational institutions. The pressure to provide high-
quality services to meet beneficiary satisfaction and expectations is escalating in the
era of globalization and competitive global mergers [12].
Given these considerations, the study’s problem can be encapsulated in the primary
question: What is the impact of incorporating elements of administrative creativity
on the quality-of-service enhancement within the Jordanian Ministry of Education?

1.2 Objectives of the Study

1. Explaining the concept of administrative creativity, improving the quality of

services, and presenting different points of view regarding these two concepts.
2. Clarifying the most critical dimensions of the elements of administrative
creativity and their role in improving the quality and dimensions of services.
3. Knowing the level of improving the quality of services in the center of the
Jordanian Ministry of Education.
4. To identify the impact of the dimensions of the elements of administrative
creativity in improving the quality of services in the center of the Jordanian
Ministry of Education.
276 M. A.-M. Massada et al.

1.3 The Proposed Study Model

In order to fulfill the study’s objectives and offer suitable recommendations within the
framework of understanding the statistical significance of the independent variable’s
impact on the dependent variable, the researchers constructed a theoretical model.
This model aimed to elucidate the influence of the independent variable—admin-
istrative creativity—on the dependent variable—service quality. It was postulated
that the relationship between these variables was unidirectional, as depicted in the
following illustration. Figure 1 presents this model for the study.
The researcher drew from various studies to prepare the source material: For the
independent variable, references were made to [13–17]. For the dependent variable,
the following studies were used [7, 18–20].
Study Hypotheses
Based on the study problem and questions, the study hypotheses can be formulated
as follows:
H0: There is no statistically significant impact at the level of significance (0.05 ≥
α) for the elements of administrative creativity in terms of its dimensions (fluency,
flexibility, risk, ability to analyze) in improving the quality of services in terms of
its dimensions (reliability, responsiveness, tangibility, safety, and empathy) at the
Jordanian Ministry of Education Center, the following sub-hypotheses are derived
from it:

Fig. 1 The proposed study model

The Impact of Applying the Elements of Administrative Creativity … 277

H01: There is no statistically significant impact at the level of significance (0.05 ≥ α)

for the elements of administrative creativity in terms of its dimensions (fluency, flex-
ibility, risk, ability to analyze) in (reliability) in the center of the Jordanian Ministry
of Education.
H02: There is no statistically significant impact at the level of significance (0.05 ≥
α) on the elements of administrative creativity in terms of its dimensions (fluency,
flexibility, risk-taking, ability to analyze) in (response) at the Jordanian Ministry of
Education Center.
H03: There is no statistically significant impact at the level of significance (0.05 ≥
α) for the elements of administrative creativity in terms of its dimensions (fluency,
flexibility, risk, ability to analyze) in (tangibility) in the center of the Jordanian
Ministry of Education.
H04: There is no statistically significant impact at the level of significance (0.05 ≥
α) for the elements of administrative creativity in terms of its dimensions (fluency,
flexibility, risk-taking, ability to analyze) in (Al-Aman) in the center of the Jordanian
Ministry of Education.

2 Literature Review

2.1 The Concept of Administrative Creativity

Administrative creativity is a multifaceted concept with varying definitions proposed

by different scholars. According to [1], it refers to “the ability to gather or disseminate
information in a way that fosters the development of innovative ideas, responding to
perceived needs and opportunities within an organization.”
Abdullah Abdul Khaleq Al [5] interprets it as a uniquely individual process in
which a person encounters situations, deeply engages with them, and reacts in a
way distinct from others. This reaction often leads to the creation of new products,
services, technologies, tools, or administrative processes.
Others have defined it as the inception of something new, a transformative shift
within an organization geared towards development, or a capability requiring specific
cognitive skills and not easily accessible to all [3]. Despite the diversity in definitions,
a common thread understands administrative creativity as unusual or unconventional.
Another perspective, provided by [14], defines administrative creativity as a suite
of mental abilities that allow institutional managers to adapt to their environment,
solve problems, and respond to various situations in unique, innovative ways. This
definition emphasizes the novelty and originality characterizing such responses.
Further, [15] view administrative creativity as the capacity to conceive novel
and potentially valuable ideas, solutions, products, services, or work methods. This
capacity is based on an individual’s exceptional problem-solving skills, intellectual
278 M. A.-M. Massada et al.

prowess, knowledge, the presence of an enabling environment, competent leadership,

and interactive work relationships that foster innovative ideation.
Lastly, [21] describe it as the employee developing personal creative skills to
devise novel administrative methods, find innovative solutions to an administrative
problem, or form new perceptions to address that problem. This process relies on a
deliberate analysis and structured creative endeavor connected to sensory perception
grounded in logical analysis, testing, experimentation, and evaluation.

2.2 The Importance of Administrative Creativity

Administrative creativity, a prevalent topic in business administration literature, is

recognized for its unique characteristics and organizational variables that set one
organization apart. Its understanding involves various factors, including the creative
individual’s personal attributes and cognitive abilities. It is considered essential in
driving economic and social development, particularly in developing countries where
innovation is necessary [22, 23].
According to [15], administrative creativity is crucial in enhancing organizational
effectiveness by improving coordination, internal control, and the structural frame-
work. Additionally, it supports creative processes vital for an organization’s conti-
nuity and efficient resolution of challenges [24, 25]. It also encourages positive trans-
formations within an organization’s structure and operations and aids in its adaptation
and interaction with surrounding environmental variables [5].
Komelina et al. [26] note that the impact of administrative creativity is evident
in productivity enhancement, performance improvement of the organization and
its staff, and the introduction of innovative systems, regulations, procedures, and
work methods. Such creative administration contributes to developing programs
and services beyond the organization’s primary activities, improving the quality of
products and services delivered to beneficiaries [27].

2.3 The Concept of Quality of Services

Fotouh [28] delineates the quality of services as the degree to which a service’s actual
performance aligns with a customer’s expectations. It is a combination of features
and characteristics that aptly satisfy a customer’s needs, leading to satisfaction or
dissatisfaction on the customer’s end. Service quality is often perceived as the aptness
of a service to cater to customer needs or expectations.
According to [29, 30] service quality can be defined as a measure of how
well a service aligns with a customer’s expectations. Providing excellent service
equates to matching the customer’s anticipated standards. Furthermore, [14] suggests
that service quality means the organization successfully designs and delivers the
service right from the outset, continually improves its performance, and concurrently
The Impact of Applying the Elements of Administrative Creativity … 279

achieves customer satisfaction. The organization can enjoy a competitive edge over
similar service providers in this context.
Taha et al. [31] define it as the ability of a product or service to fulfill consumer
needs, representing the discrepancy between customers’ expectations of perceived
service and the actual service. Bouaka et al. [7] suggest that service quality fluctuates
based on the sophistication level of the service provided to individuals versus their
expectations, emphasizing that service quality is a fundamental requirement to satisfy
and retain customers.
Abdalmalik and Yasser Saleh Mahfouz [18] perceive service quality as a skill for
attracting customers and interacting with them to achieve market excellence and lead-
ership. Hamza and Boutmani [6] further add that service quality encompasses deliv-
ering services to individuals and facilitating their provision via technical means and
social media platforms. This facilitates interaction with individuals and fulfills obli-
gations towards them without discrimination while maintaining strict confidentiality
of the services provided [32].

2.4 The Importance of Quality of Services

Service quality is critical to organizations aiming for growth and stability, as it plays
a pivotal role in enhancing performance and adapting to contemporary changes
[33, 34]. This is especially pertinent in-service organizations where, according
to [20], customers and employees jointly strive to deliver services of the highest
caliber. Exceptional service quality and performance distinguish competitive organi-
zations, often characterized by robust information systems, adept staff, and distinctive
customer service skills [16, 35].
Kaddah [13] highlights that service quality significantly contributes to profit
generation, fostering customer satisfaction and helping to achieve organizational
objectives. While planning can be employed in product production, it’s the dynamic
interaction between customers and employees in service sectors that creates and
delivers top-notch service. Taha et al. [31] further underscore that, particularly in
this age of technological and information revolutions, service quality is a potent
tool for driving ongoing service delivery improvement, retaining existing customers,
attracting new ones, and sustaining organizational competitiveness.

3 Methodology

The methodology outlines the statistical techniques, processes, and tools employed
by the researcher to gather and interpret data, accomplish the study’s objectives,
and address the research questions. While there exists a broad range of scientific
methodologies utilized by scholars, the descriptive analytical method, adopted by
the researcher in this study, is among the most prevalent.
280 M. A.-M. Massada et al.

To align with the study’s objectives, questions, and hypotheses, the researchers
leveraged an array of statistical tests executed via the SPSS (Statistical Package for
the Social Sciences) program for data analysis.

3.1 Study Population and Sample

The scope of this study encompassed the employees stationed at the central office
of the Ministry of Education, totaling 255 individuals of diverse genders. The study
sample represented a wide array of ranks and job designations, thus encapsulating
all levels of the workforce within the ministry.

3.2 Data Collection

In the process of data collection, the researchers drew upon secondary sources. These
included the annual reports published by the sample banks during the study period
(2017–2021) to obtain essential data. Further information was sourced from refer-
ences, periodicals, bulletins, and financial and accounting reports relevant to the
study topic.
Considering the study population of 255 employees, the minor sample size repre-
sentative of the community, as per [15] table, ought to be no less than 155 individuals.
The researchers used the comprehensive sampling method to target the entire popu-
lation by distributing questionnaires. Out of the distributed questionnaires, responses
were received from 180 individuals, accounting for 71% of the total distributed ques-
tionnaires. Out of the 255 questionnaires circulated among the population, 75 were
not recovered by the researchers.

3.3 Study Tool

The research instrument, or the method researchers use to collect data from the
sample, plays a pivotal role in the study. In this instance, a questionnaire was utilized
to gather primary data. This tool was thoughtfully designed with phrases and sections
that aligned with the nature of the study and its variables. Data was collated through
the responses given by the respondents to these statements.
The questionnaire was sectioned into three parts: Part One: Captured demographic
and functional data. Part Two: Explored the independent variable, namely admin-
istrative creativity. This was gauged through 23 items. Part Three: Focused on the
dependent variable, the quality of services, measured using 25 items.
The Impact of Applying the Elements of Administrative Creativity … 281

3.4 Stability

Stability refers to the extent to which the performance yields consistent results upon
repeated applications. Any instrument that fails to provide stable readings raises
doubts about the validity of its data. Numerous methods exist to gauge stability, with
internal consistency being one of the most crucial.
Table 1 demonstrates that Cronbach’s alpha values for all study variables exceed
(0.7). This suggests that the study’s findings are reliably consistent and provide a
reasonable basis for interpretation and analysis [3, 36].
Table 2 demonstrates that the tolerance values for all dimensions associated with
the independent variable exceed 0.1. Concurrently, all variance inflation factor (VIF)
values are below 5 [33]. These findings indicate the absence of multicollinearity
within the data set (Tables 3 and 4).

Table 1 Results of the internal consistency analysis of the questionnaire through Cronbach alpha
coefficient
No Variables The number of Items Cronbach alpha coefficient
1 Fluency 6 0.871
2 Flexibility 6 0.861
3 Risk 5 0.828
4 The ability to analyze 6 0.878
5 Tangibility 5 0.860
6 Reliability 5 0.839
7 response 5 0.860
8 Safety 5 0.837
9 Empathy 5 0.866
Overall performance 48 0.971

Table 2 Variance inflation

Variables (VIF) Tolerance
factor (VIF Tolerance)
Fluency 0.2750 3.641
Flexibility 0.2320 4.311
Risk 0.3510 2.845
The ability to analyze 0.3240 3.090
282 M. A.-M. Massada et al.

Table 3 Arithmetic means and relative importance of the dimensions of the administrative
creativity variable
No Item Arithmetic mean Relative importance
1 Fluency Medium 3.50
4 Flexibility Medium 3.40
3 Risk Medium 3.44
2 The ability to analyze Medium 3.49
Administrative creativity Medium 3.46

Table 4 Arithmetic means and relative importance of the dimensions of the service quality variable
No Item Arithmetic mean Relative importance
3 Tangibility Medium 3.42
2 Reliability Medium 3.47
4 Response Medium 3.38
1 Safety Medium 3.64
5 Empathy Medium 3.34
Quality of services Medium 3.45

4 Results

The study deployed a multiple regression analysis to test the principal hypothesis
and its derivative sub-hypotheses. The examination yielded the following insightful
outcomes:

4.1 Impact of Administrative Creativity Elements on Quality

of Services

The dimensions of administrative creativity (fluency, flexibility, risk-taking, and

analytical ability) demonstrated a statistically significant effect on the quality of
services in the Jordanian Ministry of Education center. The findings indicate that
administrative creativity substantially influences service quality and is instrumental
in its enhancement. Furthermore, the data reveals a robust, positive correlation
between the facets of administrative creativity and service quality. This suggests
that by fostering administrative creativity, the Ministry of Education could see an
appreciable improvement in its service quality.
The Impact of Applying the Elements of Administrative Creativity … 283

4.2 Impact of Administrative Creativity Elements

on Reliability

The aggregated dimensions of administrative creativity were found to exert a statis-

tically significant influence on reliability, an essential facet of service quality. The
findings underscore the role of administrative creativity in bolstering reliability within
the Ministry of Education.

4.3 Impact of Administrative Creativity Elements

on Responsiveness

Our study also revealed that specific dimensions of administrative creativity, partic-
ularly the leadership dimension, impact the responsiveness within the Jordanian
Ministry of Education. The evidence suggests that effective implementation of
administrative creativity dimensions can enhance responsiveness.

4.4 Impact of Administrative Creativity Elements

on Tangibility

The analysis found a statistically significant impact of administrative creativity on

tangibility, an essential aspect of service quality. However, it is important to note that
this influence is chiefly attributed to the fluency and analytical ability dimensions,
while flexibility and risk-taking appeared to have negligible effects on tangibility.

4.5 Impact of Administrative Creativity Elements on Security

A significant effect was noted of the combined dimensions of administrative creativity

on security within the Jordanian Ministry of Education. These results highlight the
pivotal role of administrative creativity in fostering a sense of security within the
institution.

4.6 Impact of Administrative Creativity Elements on Empathy

Finally, a substantial effect was observed of the combined dimensions of adminis-

trative creativity on empathy, an important component of service quality. The study
284 M. A.-M. Massada et al.

thereby underscores the significance of administrative creativity in fostering a more

empathetic environment within the Ministry of Education.

5 Conclusion

Drawing from the results of our multiple regression analysis, our study concludes that
the dimensions of administrative creativity, namely fluency, flexibility, risk-taking,
and analytical ability, significantly influence various facets of service quality in the
Jordanian Ministry of Education center.
The findings underscore administrative creativity as a critical driver for enhancing
service quality, reliability, responsiveness, tangibility, security, and empathy within
the Ministry. This implies that fostering an environment that promotes these
dimensions could substantially improve the overall functioning of the Ministry of
Education.
However, our study also highlights that the impact of different creative dimensions
varies across service quality facets. For instance, while fluency and analytical ability
substantially influence tangibility, the same cannot be said for flexibility and risk-
taking.
Given these findings, the Jordanian Ministry of Education should consider devel-
oping targeted strategies to cultivate and promote administrative creativity. Such
initiatives could enhance the overall service quality, contributing to the Ministry’s
efficiency, reliability, and effectiveness. It is crucial, however, to implement these
strategies with a nuanced understanding of which dimensions of creativity exert the
most influence on particular aspects of service quality.
In conclusion, nurturing an atmosphere of administrative creativity within educa-
tional institutions can enhance service quality, thereby contributing to the overall
effectiveness and reputation of such institutions. Future research could further explore
the specific mechanisms through which each dimension of creativity impacts different
aspects of service quality, paving the way for more detailed and effective policy
recommendations.

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Utilizing Deep Learning Models (RNN,
LSTM, CNN-LSTM, and Bi-LSTM)
for Arabic Text Classification
Ahmad Al-Qerem, Mohammed Raja, Sameh Taqatqa,
and Mutaz Rsmi Abu Sara

Abstract With the increase in the number of Internet users, the amount of data has
increased dramatically. Millions of texts are written daily in most fields, whether
cultural, scientific, political, health, or others, through websites, social media, and
academic or news institutions. This data has become an essential source for providing
additional services. One of these services is the classification of texts into previously
defined categories according to the information they contain. Texts in the Arabic
language are still considered a great challenge to carry out the task of classifying
them, unlike other languages, such as English, French and many other languages. In
this research paper, four models of deep learning techniques (RNN, LSTM, CNN-
LSTM, and Bi-LSTM) were built to classify texts in the Arabic language, and the
models were tested on a data set consisting of news articles and classified based on
the content of the article. The highest accuracy result (94.02) was obtained by the
(Bi-LSTM) model.

Keywords Classification · Deep learning · LSTM · Arabic text · RNN ·

CNN-LSTM · Bi-LSTM

A. Al-Qerem
Faculty of Information Technology Zarqa, Zarqa University, Zarqa, Jordan
e-mail: [email protected]
M. Raja (B)
Department of Electrical Engineering, University of Business and Technology, Jeddah, Saudi
Arabia
e-mail: [email protected]
S. Taqatqa · M. R. A. Sara
Department of IT, Palestine Ahliya University, Bethlehem, Palestine
e-mail: [email protected]
M. R. A. Sara
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 287
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_22
288 A. Al-Qerem et al.

1 Introduction

In today’s fast-paced, technologically driven world, we are ceaselessly inundated

with innovations rapidly transforming the educational landscape. These burgeoning
technologies are playing an influential role, not just in reshaping education as a whole
but specifically in revolutionizing the field of language teaching [16]. According to
the arrangement of languages, the Arabic language is considered the fourth language
in the world, and the number of Arabic speakers is more than 420 million speakers,
and more than 150 million Internet users. Also, the Arabic language is considered the
second most difficult language in the world. The diacritics of the Arabic language is
one of the reasons for its complexity, in addition to the fact that the Arabic language
is written from right to left, unlike other languages, and it is characterized by the
multiplicity of meanings for one word in it [1]. The Arabic language does not have
an uppercase letter and a lowercase letter like the English language. The diacritical
symbols used in this language are the ones that increase its complexity. The diacritics
(“Fatha, Damma, Kasra, Sukoon, Tanween, Shadda”) change the meaning of the
word and can be used on all letters [2]. The text can be classified according to
the meaning of the words (content), and it can be classified into one category or
many categories for a group of texts (based on the contents of the text). This can
be applied to all languages [1]. Many research, applications, algorithms, artificial
intelligence techniques, and models that have been worked on in classifying texts
of the English language and other languages have achieved a great success rate, and
their results are excellent in the accuracy of classification. The texts of the Arabic
language, and the classification process for the Arabic text is still facing difficulties
because the structure of words in the Arabic language has complexity and difference
in meaning, and one word may have more than one meaning [3]. For example, the
word is a word of three letters only, but it has several meanings based on the
diacritical marks. It may come in the form of a past tense, meaning “greet,” and it
may come in the form of another past verb, meaning “save,” and another past verb,
meaning “to deliver,” and it can come as a noun. “Peace” means the opposite of
war, and a noun can come in the sense of “stairs”, and this is a simple example
of one word. There are words that are used as prepositions and in other meanings
that are used as nouns or verbs. Also, most of the texts of the Arabic language
are written electronically without diacritical marks. All these reasons add to the
complexity of the language and thus increase the complexity of the classification of
the Arabic text. The pre-processing techniques that the researchers used in classifying
the texts of the English language is to reduce the randomness of the data, choose good
features, and shorten the processing and classification time [4]. The feature space has
multiple dimensions and has a poor estimated accuracy rate. This is one of the biggest
classification accuracy problems. When extracting features from a text document,
not all properties represent the semantics of the document, and many of them do not
affect the significance of the content. As a result, effectively selecting distinct words
is an essential process in text classification. This process involves a number of steps,
including feature extraction, feature selection, and feature weighting. All the features
Utilizing Deep Learning Models (RNN, LSTM, CNN-LSTM … 289

that can be extracted from the document are extracted using feature extraction, the
most important features are selected using feature selection, and the last step is feature
weighting, which assigns a value to each word to indicate how important it is for that
feature [5]. The texts of the Arabic language need to conduct more pre-treatments than
the needs of other languages, due to their complex diacritics and structure [6]. Many
words and letters that are used repeatedly, such as prepositions, demonstrative nouns,
and pronouns, all of this greatly affects the meaning of the sentence, the research
involves the development of deep learning models such as RNN, LSTM, CNN-
LSTM, and Bi-LSTM for classifying Arabic news texts into different categories. The
models are tested on a dataset specific to various topics, and their accuracy in text
classification is evaluated. Additionally, the data is pre-processed, and experiments
are conducted to compare the models’ performance before and after pre-processing.
The study also includes a review of related literature to support the research idea.

2 Related Work

Many researchers worked on finding and improving methods of classifying the Arabic
text using artificial intelligence techniques. Some researchers focused on building
and developing classification models, while some researchers focused on methods
of pre-processing the data. Here are some of the previous factors that focused on
classifying the Arabic text in various ways.
In [7]. The authors of these articles used Rocchio’s classifier, neural networks,
K-nearest neighbors, support vector machines, Naive Bayesian, C4.5, and neural
networks in a number of experiments. The Arab Trials Dataset was used in these
investigations. Experiments in that study were conducted using a smaller data set.
They used (term frequency–inverse document frequency) techniques to adjust the
weights, and through tests it was found that their results were good. In [8] is
conducting another study on classification of Arabic text. The authors suggested
employing Deep Belief Networks and Markov Clustering Unsupervised Learning
(DBN). They carried out their tests in three stages. Pre-processing was the initial step,
which involved taking out conjunctions and punctuation and using each word’s base
form. The clustering step came next, and fuzzy C-means and Markov clustering were
used. They trained the suggested model using DBN in the final step. The suggested
technique was evaluated using two datasets: the Saudi Press Agency dataset, which
had 6,000 cases, and the Al-Jazeera dataset, which contained 10,000 instances. The
findings had an accuracy of 91.2%, a recall of 90.9%, and an F1 measure of 91.02%.
The authors of [5] used convolutional neural networks to enhance the categorization
of Arabic text (CNN). There were four steps in the suggested procedure. To elimi-
nate stop words, tidy up the text of other characters and numerals, and identify word
stems, the writers first preprocessed the text. Then, they represented the text using
the Bag of Words approach. Then, as a dimension reduction technique, they used
Term Frequency-Inverse Document Frequency (TF-IDF) to identify the most crucial
terms. They trained the CNN model last. The 111,728 items in the dataset, which
290 A. Al-Qerem et al.

was divided into five groups, were taken from several Moroccan newspapers by the
authors for this study. The accuracy rating for the findings was 92.94%. The authors
in [9] have developed a deep Arabic text classification model that is a completely
new framework for Arabic text classification based on N-gram word embedding and
multi-Kernel CNN. The purpose was to use the word embedding approach to improve
the representation of words in the Arabic language. The scientists used 15 public data
sets and conducted a comparative study using well-known machine and deep learning
algorithms to confirm their findings. The classification accuracy exceeded the stan-
dard results with a high score of 97.58%. In a different study [10], CNN and GA
were used to improve weight start for crack identification in pictures. The initial-
ization of the chromosomes’ values, which ranged from 0 to 255, and the choice of
the bias values, which fell between 128 and 128. In the training phase, the weights’
starting values were taken from the chromosome to generate an output picture. The
fitness value of that chromosome was determined by comparing this output image to
the original image. With a 1% mutation rate, the fittest chromosomes were chosen
using the roulette selection approach. Additionally, a random value between 0 and
the length of the chromosome is chosen as the crossover point. The fracture detec-
tion accuracy using the suggested method was 92.3% over 100 pictures. The authors
of [11] used a large Arabic text dataset and deep learning to show how stemming
approaches might affect classification accuracy. In order to do this, they used seven
Deep Learning approaches (CNN, CNN-LSTM (Long Short Memory), Bidirectional
LSTM, CNN-GRU (Gated Recurrent Units), Bidirectional GRU, Attention-based
GRU, and Attention-based LSTM) coupled with eleven stemming methods based
on stem and root. They made use of the word embedding technique. They employed
cross validation with 10 folds and two sizable datasets (Arabic News Texts (ANT
v1.1) and Saudi Press Agency (SPA)). The outcomes demonstrated that stem-based
stemming techniques are marginally superior to root-based stemming strategies. To
cope with Arabic text categorization, the authors advised using the bidirectional and
attention learning principles. For Attention-based GRU combined with stem-based
technique, the F measure was 97.96%. Additionally, they recommended using a
stem-based technique in conjunction with a skip-gram representation when dealing
with a small-sized vector, although CBOW (Bag-Of-Word) can be employed when
dealing with a large-dimensional vector. The authors of [12] used DL to classify
multiclass, single-label Arabic phrases. They combined the word embedding layer
with convolutional neural networks (CNN). The AraVec Arabic word2vec model was
utilized in the word embedding layer to capture word float point vector similarity.
CNN employed hyper-parameters such padding, the layer count, the filter count, and
the filter size stride. As a preprocessing stage, they used tokenization, word indices,
and pad sequences [13]. Three convolutional layers plus a sequential stack embedded
layer make up the model. There are 1500 of the most popular terms in the dataset.
They said that their strategy produced very accurate outcomes for the NLP tasks. In
[14] a study of the categorization of Arabic text using the K closest neighbor (KNN)
and support vector networks as two machine learning methods (SVM). By gathering
news items for the training and testing phases, they create their own corpus. They
showed that these algorithms produce the best outcomes, although the SVM method
Utilizing Deep Learning Models (RNN, LSTM, CNN-LSTM … 291

performed better for prediction. In [15–19] A multi-label Arabic dataset was gathered
from the CNN Arabic news portal 10,997 papers made up the dataset, which was
divided into six categories: “economics,” “Middle East,” “world,” “sports,” “science
and technology,” and “other.” The kNN, Random Forest, and Decision trees single-
label learning algorithms were combined with the BR transformation in the authors’
experiment. kNN and Random Forest were surpassed by Decision trees, according
to the trial data. The authors of [8] Describe the use of the Nave Bayes classifier with
the Tasleel technique, for the purpose of classifying documents written in Arabic,
the authors developed a set of 300 papers divided into 10 types in order to validate
the proposed approach. The compiled collection consists of many journal articles
from various newspaper websites on the internet. The experimental analysis showed
the success of the proposed classifier in terms of error rate, retrieval, and accuracy
measures, achieving a classification accuracy of 62.23%.

3 Deep Learning

Deep learning is a part of machine learning, basically a multi-layered NN (neural

network). Those NNs aim to mimic human brain activities, although with limited
ability, enabling it to learn from huge quantities of information. Whilst the single-
layer NN might remain to produce reasonable predictions, further layers may assist
refine and optimize the accuracy.

3.1 Recurrent Neural Networks (RNNs)

A kind of deep neural network works with sequential data or time series. Those
methods are usually utilized for, ordinal or temporal problems such as translating,
voice recognition, Natural Language Processing, and image captioning, and they’re
employed in useful applications including voice commands, Google Translate and
Siri. To learn, RNNs require training data. These are characterized by their memory,
allowing them to alter present output and input by using information from prior
inputs. Although traditional neural networks assume that outputs and inputs are
unrelated to one another, the output of RNN is dependent on the previous elements’
sequence. Whilst upcoming events could be helpful in determining a series’ output,
unidirectional, RNNs cannot compensate for them in their forecasts (Fig. 1).

3.2 Long-Short-Term Memory (LSTM)

LSTM blocks or units are types of RNN topology. RNNs structure includes long
short-term memory (LSTM) blocks or modules. RNNs are designed to use specific
292 A. Al-Qerem et al.

Fig. 1 Recurrent neural networks architecture

forms of artificial memory operations that really can assist those AI applications
in better mimicking human reasoning. RNN utilizes LSTM blocks for providing
context on how the software receives input and generates output. LSTM blocks
are complicated units with numerous components including activation functions,
weighted inputs, inputs of the previous layer, and final outputs.
The unit is known as LSTM block since the software uses a structure based on
short-term memory operations to generate long-term memory. Those systems are
frequently employed in NLP, for example. Generally, LSTM is a well-known and
widely used idea in developing RNNs (Fig. 2).

Fig. 2 Long-short-term memory architecture

Utilizing Deep Learning Models (RNN, LSTM, CNN-LSTM … 293

Fig. 3 Convolutional neural network architecture

3.3 Convolutional Neural Networks (CNNs)

CNNs are special versions of ANNs (artificial neural networks), use convolution
rather than ordinary matrix multiplication in (at least) one of their layers. They
are employed in image processing and recognition and are specifically built for
processing pixel data. CNN includes input, hidden, and output layers. Any interme-
diary layers in a feed-forward NN are referred to as hidden since its input and output
are veiled via the final convolution and the activation function. These hidden layers
of a CNN include convolutional layers. Usually, this contains a layer that executes
the dot product of the convolution kernel as well as the input matrix of the layer
(Fig. 3).

3.4 CNN-LSMT Integration

CNN-LSTM model integrates Convolutional Neural Network layers for extracting

features on data input with Long-Short-Term Memory to enable sequence predic-
tions. CNN-LSTM was created to solve prediction issues of visual time series and
to generate text descriptions of image sequences (Fig. 4).
294 A. Al-Qerem et al.

Fig. 4 CNN-LSTM architecture

3.5 Bidirectional Long-Short Term Memory (BiLSTM)

BiLSTM is a sequential processing method that includes two Long-Short-Term

memory, the first able to take input in the forward direction and the second in the
other (backward direction). Bidirectional Long-Short-Term Memory significantly
enhances the network’s available information, optimizing the context for the algo-
rithms (for example: being aware of the words that simultaneously precede and follow
a word in a specific sentence) (Fig. 5).

Fig. 5 Bi-LSTM architecture

Utilizing Deep Learning Models (RNN, LSTM, CNN-LSTM … 295

4 Dataset

The dataset that was worked on was collected from several data sets of previous
works specialized in the classification of Arabic text, which is available on the
website (www.kaggle.com). The texts were collected, and their categories unified,
the current dataset comprises over 16,200 texts that have been categorized into six
distinct categories.

5 Methodology

5.1 Data Collection

As previously stated in the “Data set” section, data was gathered from various prior
studies based on their respective categories. The dataset, which contains over 16,200
entries, has been classified into six distinct categories.

5.2 Preprocessing of Data

To preprocess the data, several steps were taken to clean it. This involved removing
digits, punctuations, stop words, emojis, diacritics, and emoticons. Specifically, a
“stop-word” list for the Arabic language was utilized to eliminate commonly repeated
words in Arabic sentences, such as (from), (to), (in), (until),
(but), (after), and (not). The objective was to ensure that these words
did not impact the remaining words used in the dataset.

5.3 Features Extraction

In this section, a specific function from the TensorFlow library was employed
for features extraction. This function allows the selection of a maximum number
of features to extract, such as 5000 words. Consequently, it focuses on the most
frequently occurring 5000 words in the dataset while disregarding the remaining
ones. The choice of this number depends on the size of the data or the length of the
texts being processed.
296 A. Al-Qerem et al.

5.4 Padding

After features extraction, the documents’ lengths vary. To address this, padding was
applied to ensure uniform document length by adding sparse elements.
– Pad_sequences ‘Pre’: add zeros to the begging of the array till its length becomes
as determined.
– Pad_sequences ‘Post’: add zeros to the end of the array till its length becomes as
determined.

5.5 Embedding

The Embedding layer allows us to map words into dense vectors as inputs, the
common first layer.
In Fig. 6 a graphic represents our work steps.

Fig. 6 A graphic represents

our work steps
Utilizing Deep Learning Models (RNN, LSTM, CNN-LSTM … 297

6 Experiments

Once the models were constructed, various parameters were utilized for each model.
The optimal values for these parameters, resulting in the highest accuracy and
completion time for the classification process, are presented in Table 1. and they
were applied to all models before data processing with minor modifications to some
parameters on other models. In Table 2, the same parameter values that were chosen
and then applied to the models after data pre-processing are shown. The classification
accuracy percentage and the time spent by each of them are also shown. The emphasis
was placed on modifying specific parameters, including maximum features, padding
type, embedded vector length, number of neurons, number of layers, epochs, batch
size, LSTM neurons, recurrent dropout, test rate, number of filters, filter length,
and activation function, as a result, the highest accuracy was achieved in both cases
(before and after processing). Interestingly, we observed that pre-processing had
minimal impact. However, a substantial difference in accuracy results was noted
when altering the padding type from “post.” to “pre” when increasing the sentence
length, except for the (Bi-LSTM) model, which gives the same results because this
model takes information in both directions. There was no significant effect when
choosing the length of the short sentence. We also noticed a difference in the accu-
racy results when changing the number of neurons and the number of layers, Further-
more, alterations in the accuracy results were observed when adjusting the number of
neurons and layers. Additionally, it was noticed that increasing parameter values led
to longer implementation times. Notably, significant differences were observed when
modifying the value of recurrent dropout, with improved results obtained by reducing
its value. Consequently, the focus was narrowed down to identifying the parameter
values that yielded the highest accuracy in the initial RNN model. These identified
parameters were then tested on the remaining models to evaluate their performance.
Table 3 displays the highest accuracy results achieved and the corresponding
processing time for each model. Notably, the Bi-LSTM model yielded the highest
accuracy of 94.02%. This can be attributed to its ability to process data from both
directions, which aligns well with the right-to-left nature of the Arabic language.
It’s important to mention that this accuracy was obtained prior to pre-processing the
data, as depicted in Fig. 7. During pre-processing, certain words, such as stop-words,
were removed, which could potentially impact the contextual understanding of the
sentence. Thus, the inclusion of stop-words may not always be necessary or yield the
best results. Figure 8 show cases the outcome after applying the pre-processing step.
298 A. Al-Qerem et al.

Table 1 Best parameters before preprocessing

Parameters RNN LSTM CNN-LSTM Bi-LSTM
Max features 60,000 60,000 60,000 60,000
Max len 40 40 40 54
Embedding vector len 100 100 120 120
Padding type pre pre pre Post
Batch size 50 100 120 200
RNN neurons 40 − − −
LSMT neurons − 160 80 60
Layer 1 neurons 80 − − −
Total Epochs 5 8 7 8
Recurrent dropout 0.1 0.1 0.01 0.15
Number of filters − − 60 −
Filter length − − 6 −
Accuracy 90.40 93.24 93.32 94.72
Process time (seconds) 234 482 476 839

Table 2 Best parameters after preprocessing

Parameters RNN LSTM CNN-LSTM Bi-LSTM
Max features 60,000 60,000 60,000 60,000
Max len 40 40 40 54
Embedding vector len 100 100 120 120
Padding type pre pre pre Post
Batch size 50 100 120 200
RNN neurons 40 − − −
LSMT neurons − 160 80 60
Layer 1 neurons 80 − − −
Total Epochs 5 8 7 8
Recurrent dropout 0.1 0.1 0.01 0.15
Number of filters − − 60 −
Filter length − − 6 −
Accuracy 90.56 93.13 93.61 93.71
Process time (seconds) 296 1225 507 496
Utilizing Deep Learning Models (RNN, LSTM, CNN-LSTM … 299

Table 3 Highest accuracy results for each model

Model type Accuracy
Before processing Time After processing Time
RNN 90.13 234 90.56 296
LSTM 93.24 482 93.13 1225
CNN-LSTM 93.32 476 93.61 507
Bi-LSTM 94.72 839 93.71 496

Before processing
96 1000
95
94 800
93
600
92
91
400
90
89 200
88
87 0
RNN LSTM CNN-LSTM Bi-LSTM

Accuracy Before processing Time

Fig. 7 Obtained accuracy before processing

After processing
94 1000
93 800
92
600
91
400
90
89 200
88 0
RNN LSTM CNN-LSTM Bi-LSTM

Accuracy After processing Time

Fig. 8 Obtained accuracy after processing

300 A. Al-Qerem et al.

7 Conclusion

This paper discussed the exponential growth of Internet data due to the increasing
number of users and highlighted the significance of the Arabic language and its user
base. The importance of text classification was also emphasized, noting the abun-
dance of classification methods available for English and other languages, particu-
larly those utilizing artificial intelligence techniques. However, these methods are
not as suitable for Arabic text due to certain reasons, which were mentioned. The
study focused on implementing deep learning techniques such as RNN, LSTM,
CNN-LSTM, and Bi-LSTM for classifying Arabic text using a specific dataset. The
results obtained were relatively satisfactory, and attempts were made to preprocess
the data, although the impact on the results was found to be comparable to when no
preprocessing was performed. Future research aims to leverage pre-trained models
that specialize in natural language processing.

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Forensic Accounting and Big Data
a Literature Paper

Dana Kayed and Abdalmuttaleb Al-Sartawi

Abstract Big data becomes essential to each sector because it will provide decision-
makers with very important and critical information. Analyzing big data will lead
to understanding the patterns of the work and will help the forensic accountant in
deducting any expected fraud. The current paper reviewed previous literature related
to big data and the challenges that can be faced by a forensic accountant. Depending
on the literature, they reviewed the paper and concluded that it is important for a
forensic accountant to have knowledge about big data and know how to use different
software to analyze it.

Keywords Forensic accounting · Big data · Auditing · Accounting ·

Cybersecurity

1 Introduction

Today, big data is not only a major factor in the business world; it has spread to almost
all sectors, and it is being used in new ways in a variety of fields daily [1–3]. Libraries
collect, organize, preserve, and retrieve intellectual production with the information
and data it contains [4, 5]. If data are the foundational elements of the information
structure [6–9]. To accomplish the goals of libraries, which are to enable and facilitate
access to information for individuals who are looking for it, we as librarians should
take use of this data and use it [10–12].
However, this role is no longer a preferential role and a favor from libraries to
their societies, but has become an existing necessity and unavoidable competition,
especially with the needs of the current generation of users and the high ceiling of

D. Kayed
Manama, Bahrain
e-mail: [email protected]
A. Al-Sartawi (B)
Ahlia University, Manama, Bahrain
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 303
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_23
304 D. Kayed and A. Al-Sartawi

their expectations of library services, as well as the development of competition from

the web and websites that make information and its sources available to the user, and
social networks and the opportunities they provided to benefit [13–16]. This may
result in libraries pulling the rug out from under their feet, in whole or in part, after
sitting on it for decades [17]. As a result, we as librarians must develop, follow, and
keep pace with the existing development in societal information needs, opportunities,
and threats that would shift researchers. Destination from the library to where the
web and its environment are [18–23].

2 Forensic Accounting

2.1 The Concept of Forensic Accounting

The field of forensic accounting, also referred to as judicial accounting, investigative

accounting, or simply forensic accounting, has developed into one that looks beyond
numbers when dealing with reality [24–26]. It employs the law and investigative
skills to be present in the courts; it employs the science and skills of accounting and
auditing to detect financial damages and report them for use in legal investigations;
and it employs the science and skills of accounting and auditing to detect non-
financial damages [27, 28].
Forensic accounting is the science of applying knowledge in the fields of
accounting, finance, taxation, auditing, analysis, investigation, inquiry, examination,
and testing of criminal law issues to achieve honesty, through which the criminal
accountant can present his opinion as an expert [29–33]. According to the American
Institute of Certified Public Accountants, forensic accounting is the use of special-
ized knowledge in the areas of accounting, computer auditing, finance, quantitative
methods, portions of the law, research, and investigative skills to gather, assess, and
report on fixed evidence [34–36].
– Services for conducting investigations: These could lead to testimony in court.
– Legal services: which depend on the accountant’s position as an expert,
consultant, or in another relevant job.
According to Bhasin, forensic accounting is the science that deals with the appli-
cation of knowledge from the fields of accounting, finance, taxation, and auditing for
the analysis, investigation, inquiry, examination, and testing of criminal law and legal
philosophy issues in an effort to reach the objectivity that will allow the accountant
to offer his opinion as an expert [37].
Forensic Accounting and Big Data a Literature Paper 305

2.2 The Importance of a Forensic Accountant

Forensic accounting services may be required by all individuals, institutes, business

organizations, and courts through the collection of financial evidence that is used in
the courts to settle disputes, support or refute claims for losses, and seek justice for
fraud perpetrators for breach of trust and trust [8, 38, 39].
The significance of forensic accounting is also emphasized by the fact that it
meets the needs of the judiciary, investors, lenders, and others by lowering the rate
of financial crimes, supporting criminal cases, and lowering the frequency of fraud
and financial fraud [17, 22, 40].
The capacity of forensic accounting to identify and investigate financial fraud
and other financial crimes is crucial because financial fraud is a real threat in today’s
complicated corporate world and can have far-reaching effects on both businesses and
individuals [21, 41]. To shield companies and customers from the negative financial
and legal repercussions of such crimes, forensic accountants play a critical role in the
detection and investigation of financial fraud [42–46]. Forensic accounting is vital
because it offers essential assistance for judicial actions involving financial issues.
In court situations, forensic accountants may be called upon to testify as an expert,
and their evaluation and interpretation of financial data can be crucial in establishing
the facts of the case and influencing the result [47, 48].

3 Big Data

3.1 The Importance of Big Data

The value of data comes from its abundance, which also coincides with the superior
ability to handle it and employ it in value-added areas [49–51]. This necessitates
the development of its infrastructure of computers and cutting-edge information and
communication technology, in addition to continuous improvement in all methods of
data governance from data privacy and security and protecting it from penetration,
with a meaningful investment in the human skills dealing with it and required to
handle it [52–56].
The so-called data industry, which includes data in all stages of dealing with it
from collection, organization, preservation, security, analysis, issuance, publication,
and marketing, is growing in an unprecedented fashion to meet the ever-increasing
data revolution [57–59]. The data revolution has also benefited many people, and
businesses and government organizations alike heavily rely on data for planning,
developing enabling policies, streamlining processes, and providing prompt access
to its beneficiaries [5, 27, 60].
Big data analysis also discloses the criminal, commercial, behavioral, or functional
tendencies of the data owners, making it a very valuable product in the context
of the knowledge-based economy. Finally, knowing that the US White House has
306 D. Kayed and A. Al-Sartawi

committed more than $ 200 million in big data projects would suffice to comprehend
the significance of big data in general [61–63].

3.2 Characteristics of Big Data

3.2.1 Volume

Every day since 2012, humans have stored more than petabytes (one trillion billion)
of data, and studies show that 90% of the data available today was created in the last
two years [60, 62–67].
Big data is typically characterized as data that, regardless of indication of size,
cannot be stored or analyzed by conventional technology and software; nevertheless,
in this case, the size is perceived in comparison to ordinary data. The amount of data
being considered, its value and potential, and whether or not it qualifies as big data
are all determined by its size [6, 68–70].
There is no single specific value that distinguishes big data from small data, but
the term “big data” is typically applied to data sets that are so large that traditional
data processing techniques cannot be used to work on or store them. Traditional
software can handle data sets of megabytes and kilobytes, while big data tools can
handle data sets of terabytes and petabytes in size [10, 71].
However, new technologies have significantly contributed to many solutions to the
need to store larger data sets [54]. As with cloud storage, it is important to mention
sharing projects or the so-called “Consortium” to solve the problems of storing and
retrieving large data sets through the solutions provided by hundreds or thousands
of computers and servers linked together [58, 72–74].

3.2.2 Velocity

It discusses the astounding rate at which data is generated and processed to meet user
demands. It can also be understood by imagining the speed with which messages
and posts are created and uploaded on social media sites. Millions of people use
e-commerce sites, blogs, and social networks, which generate continuous real-time
data streams that businesses can use to gauge consumer sentiment. The challenge
here is determining how to respond to the flood of information at the appropriate
time, as everyone wants to access data at the appropriate time [2, 17, 75].

3.2.3 Variety

Numerous types of data are included in big data sets, including tweets, Facebook
chats, text messages, status updates or videos shared with friends, comments on a
particular product or post, weather indicators and news, emails, photos, forum posts,
Forensic Accounting and Big Data a Literature Paper 307

videos, audio recordings, architectural and engineering drawings and designs, infor-
mation designs and mind maps, infographics, and many more [59, 60, 62–67, 69–76,
76–79]. Every day, more and more tools for data entry are being added, including
smartphones, geolocators, space sensors, traffic data, and information inputs for
students, employees, and workers worldwide. This makes enormous data sets more
challenging to process and maintain using a single database management tool or
by conventional approaches since they contain informational overlapping images
[49, 80, 81].
The data can be divided into three categories: semi-structured or structured data,
which is a combination of the two, and structured or unstructured data, which makes
up much of the data [46, 78, 82].

3.2.4 Value

Which is associated with smart data and refers to values deduced from the most
accurate big data available. Big data analysis was initially only used by large institu-
tions and governments due to the high costs associated with doing so. However, as
technology advanced and hardware and software became more readily available and
affordable, big data analysis began to be used by a variety of commercial enterprises,
academic institutions, and other organizations, which helped to focus these activities
on lowering costs, improving their products, and enhancing support [66].

4 The Relationship Between Forensic Accounting and Big

Data

In the contemporary world, forensic accounting and big data are two professions
that are progressively interacting. Forensic accountants are employing cutting-edge
analytical tools and techniques to filter through enormous volumes of data to detect
financial crimes and other fraudulent acts as the amount of data generated by
businesses and individuals continues to expand tremendously [31, 34, 83].
The capacity to analyze vast amounts of financial data swiftly and effectively
to spot trends and abnormalities that can point to fraudulent activity is one of the
numerous advantages of using big data in forensic accounting. This has made it easier
for forensic accountants to identify intricate financial schemes and unearth hidden
assets, enabling them to strengthen their arguments and support legal actions [61].
The use of predictive analytics is one of the main ways that forensic accoun-
tants use big data. To find trends and patterns in financial data that can be indica-
tive of fraudulent conduct, statistical models and algorithms are used. Predictive
analytics can be used, for instance, by forensic accountants to spot odd trends in a
company’s financial operations, such a rapid rise in the volume of tiny transactions
or the movement of money to accounts overseas [3, 54].
308 D. Kayed and A. Al-Sartawi

The use of data mining tools is another way forensic accountants make use of
large data. To find hidden links and patterns that might not be obvious from a cursory
study of the data, this involves utilizing specialist tools to analyze massive datasets.
Data mining can be used, for instance, by a forensic accountant to find links between
parties implicated in a financial crime, for as by locating shared bank accounts or
financial transactions [70].
Forensic accountants employ a variety of big data technologies and approaches
to aid their investigations in addition to predictive analytics and data mining. For
instance, they might employ natural language processing to examine a sizable volume
of unstructured text data, such emails or bank records, to find terms and phrases that
could be indicative of fraud. In order to find links between people or organizations
implicated in a financial crime, such as close friends or colleagues, theymay also
employ social network analysis [77, 84].

5 Conclusion

Big data analytics has demonstrated its significance in the audit process. With its
existence, the auditor can audit all customer data without any exceptions, whereas
previously, the auditor had to adopt samples in the audit process and gather proof
and cues related to those samples appropriately. This increased the time and effort
needed in the audit process and increased the cost because it required larger storage
rules to save data if all data had been audited.

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Agriculture Insurance: A Panacea
for the Development of the Agriculture
Sector in India

Bijin Philip

Abstract In many emerging nations, agriculture remains the industry that is most
crucial. Agriculture financing will contribute to feeding 9 billion people by 2050 by
facilitating the expansion of food value chains and enabling underprivileged farmers
to increase their income. Global food demand is projected to increase by 70% by
2050, necessitating annual investments of at least $80 billion [1]. To eradicate hunger,
achieve food security, and promote sustainable agriculture are the three objectives of
the second sustainable development goal (SDG2). Agricultural insurance is a useful
safeguard for achieving SDG2. For agriculture to be viable, farmers must be shielded
from natural disasters and given credit eligibility for the upcoming season. The study
examines the sector of agriculture insurance in India’s present policy initiatives. In the
current study, a content analysis technique is used to assess and analyse the viewpoints
on development and performance analysis of India’s current agricultural insurance
programmes. The researchers also suggested a plan to boost the effectiveness of the
agriculture insurance programme. To improve the insurance programme and carry
out the sustainable agriculture mission, governments and development organisations
must take a more active part in collaboration with commercial reinsurers, technology
providers, input suppliers, and financial institutions.

Keywords Agriculture insurance · PMFBY · Sustainable development goal ·

Sustainable agriculture

1 Introduction

Agriculture is a significant economic sector in many developing nations and provides

rural households with income and food security. In addition to taking into account
the country’s food requirements, the agricultural sector greatly increases overall

B. Philip (B)
Assistant Professor, Department of Management, Kristu Jayanti College Autonomous,
Tiruchirappalli, Tamil Nadu, India
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 313
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_24
314 B. Philip

exports. It provides the essential raw materials needed by many agro-based enter-
prises. Protecting farmers from agriculture’s unpredictability has always been a focus
of agricultural policy. According to the National Agriculture Policy (NAP) 2000,
despite economic and technological advancements, farmers’ livelihoods continue
to be unstable due to natural calamities and market fluctuations. The significance
of this fluctuation is shown by accounts of farmer suicides in many areas of the
country during drought years. One strategy utilised in India to protect farmers from
agricultural uncertainty is crop insurance.
The Pradhan Mantri Fasal Bima Yojana (PMFBY) is a ground-breaking initia-
tive seeks to stabilise agronomists’ incomes and boost them to espouse cutting-edge
farming practises in the event that any of the advised crops fail. The proposal recog-
nises that crop insurance needs technological improvements to increase its efficacy,
transparency, and farmer-friendliness.

2 Review of Literature

India has the largest crop insurance programme in the world, covering 25 million
farmers. Nevertheless, 95 million farmer households have been denied coverage due
to design defects, most notably those associated with delays in claims settlement
[2]. A risk management approach, agriculture insurance is difficult for the majority
of Indian farmers to get. The Indian government presented a brand-new agricultural
programme every ten years, but each program’s crop insurance was inconsistent
and ineffective due to operational faults. Jain [3] asserting that there has been a
misconception that agriculture and crop insurance are unable to generate revenue or
increase output. But it can surely help both get better. Due to several constraints and
inherent limitations, the insurance sector cannot swiftly grow in rural areas. However,
there is a essential for greater insurance to cover farm assets, the lives and health of
rural populations, as well as some specific risks that have an influence on crop and
livestock output. The private sector might effectively provide this insurance provided
several significant limitations on commercial insurers were relaxed [4].

3 Objectives of the Study

• To look into possible policy changes in relation to India’s agriculture insurance

programmes.
• To evaluate how well India’s current agricultural insurance programmes are
working.
• To design a model employing content analysis to enhance the performance of
agriculture insurance.
Agriculture Insurance: A Panacea for the Development … 315

4 Methodology for Review

The content analysis method is currently being used to examine published materials
on India’s agricultural insurance. A systematic exploration of the Scopus and Web of
Science archives was performed by means of the keywords “Agriculture Industry,”
“PMFBY,” and “crop insurance in India” to discover any works that were still acces-
sible. Secondary literature that is pertinent to the search phrase and is available
through electronic resources.

5 Results & Discussions

See Fig. 1.

5.1 Present Significance of Agriculture Insurance in India

Two important agriculture insurance programmes, PMFBY and RWBCIS, are now
in use in India. On 18th Feb 2018, the government officially embraced these

Fig. 1 Phases of agriculture insurance in India

316 B. Philip

programmes as a PPP approach, giving it significant control over the insurance

service’s business model, the amount of the subsidy, and the scope of the coverage.
Assessment of the current agriculture insurance program’s performance.
Agriculture insurance programmes have been running in India since 2016 under
the Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured Weather Based
Crop Insurance Scheme RWBCIS.
An innovative government programme in India called the Pradhan Mantri Fasal
Bima Yojana (PMFBY) attempts to stabilise farmers’ earnings and encourage them to
adopt modern farming techniques. For the effective implementation of the PMFBY,
a number of technological possibilities have been presented, including IT/ICTs, cell-
phones, digital photography, new statistical methodology, and modelling approaches.
The broad use of these technologies in crop insurance programmes across the
different agroecological regions of the country, however, requires more proof [5].
Tables 1, 2, 3, and 4 display enrollment information, farmer coverage, and statistics
on reported and settled claims for the entire state from 2018 to 2022. Although there
is space for improvement in terms of adoption among the intended stakeholders,
PMFBY has proven successful in several states. Knowledge from this article may help
this important step for farmworkers’ welfare become more generally embraced. The
efficacy and acceptance of the plan can be increased by cooperative federalism, which
entails aiming for greater engagement from the states, districts, and village-level
authorities.

Table 1 Enrolment data from 2018–2022 (Kharif season)

Year 2018 2019 2020 2021 2022
Season: Kharif
States/UTs 22 20 19 19 19
Districts 475 463 391 404 383
Insurance units 1,47,836 1,56,520 1,27,553 1,21,733 1,27,127
(Source https://pmfby.gov.in/adminStatistics/dashboardF)

Table 2 Enrolment data from 2018–2022 (Rabi season)

Year 2018 2019 2020 2021 2022
Season: Rabi
States/UTs 21 19 18 19 17
Districts 486 445 389 410 408
Insurance units 1,35,020 1,26,843 1,12,539 1,14,591 1,12,639
(Source https://pmfby.gov.in/adminStatistics/dashboard)
Agriculture Insurance: A Panacea for the Development … 317

Table 3 Farmers coverage data from 2018–2022

Coverage (Kharif)
2018 2019 2020 2021 2022
Farmers 2,16,63,395 2,00,50,883 1,68,70,111 1,50,95,028 1,53,81,333
Coverage (Rabi)
Farmers 1,46,85,273 96,60,447 1,00,07,688 98,09,987 81,54,403
(Source https://pmfby.gov.in/adminStatistics/dashboard)

PMFBY lacks insufficient state backing, an ineffective subsidy mechanism, a

cumbersome claim processing system, and an uneven benefit distribution. Crop insur-
ance shouldn’t be influenced by politics, and if PMFBY is quick, varied, and veri-
fiable [6], crop insurance will help farmers more than insurers, administrators, and
politicians.
All loanee farmers were subject to mandatory provisions under PMFBY’s supply-
side push policy, however the programme was made optional in 2020. The demand
side issues with crop insurance are disregarded by the PMFBY idea. Due to the diffi-
culty of the application process, unjustified claim reimbursement postponements,
and administrative inefficiencies—lack of technological adoption in PMFBY plan
administration—farmers are discouraged from applying for crop insurance. Due to
the inconsistency of the administrators and insurers of the PMFBY programme as
well as a lack of political commitment, farmers lack faith and trust. It was required
to look into PMFBY’s performance at various stages as a result. It was also neces-
sary to examine how well various units implemented PMFBY in order to make
improvements (Fig. 2).
Despite the country’s constant introduction of new plans, agriculture insurance
has not seen much use. Thus, expanding crop insurance coverage would result in a
substantial increase in governmental spending. It seems unlikely that the programme
will be expanded in the future to include and help more farmers unless it is prop-
erly modified to make it feasible. This calls for additional government initiatives to
create appropriate procedures and offer financial support for crop insurance. Insur-
ance services for rural areas should be presented in a way that is clear and concise.
The general insurance market is particularly appealing to the private sector for invest-
ment. This capability may be used to enable numerous general insurance companies
to provide coverage for some targets. This objective might be equated to agriculture’s
GDP contribution. Running an agriculture insurance scheme and completing other
development initiatives successfully both depend on effective governance. Opera-
tions for development suffer from poor management. It is possible to implement and
administer a variety of crop insurance-based programmes with improved control.
318 B. Philip

Table 4 PMFBY & RWBCIS Combined—State-wise business statistics as on 31.08.2021

PMFBY & RWBCIS Combined—State wise business statistics as on 31.08.2021
State/UT name Reported claims Paid claims Farmer applications benefitted (Lakh)
A & N Islands 0 − −
Andhra Pradesh 1,259.01 1,254.03 13.533
Assam 17.27 − −
Bihar − − −
Chhattisgarh 1,314.60 1,296.59 15.025
Goa 0.01 0.01 0.001
Gujarat 354.89 111.67 0.927
Haryana 932.26 927.45 5.552
Himachal Pradesh 64.6 58.01 1.505
Jammu & Kashmir − − −
Jharkhand 25.46 − −
Karnataka 1,357.79 1,215.35 6.869
Kerala 85.9 85.9 0.457
Madhya Pradesh 5,905.48 5,811.75 30.546
Maharashtra 6,755.92 6,747.05 87.895
Manipur 1.14 1.14 0.032
Meghalaya 0.18 0.18 0.005
Odisha 1,177.91 1,139.48 12.078
Puducherry 7.16 − −
Rajasthan 4,920.44 4,920.31 25.574
Sikkim − − −
Tamil Nadu 1,090.13 1,056.84 13.213
Telangana 402.28 − −
Tripura 0.81 0.8 0.077
Uttar Pradesh 1,116.75 1,092.74 9.343
Uttarakhand 103.18 103.17 0.949
West Bengal − − −
Grand total 26,893 25,822 223.6
(Source https://pmfby.gov.in/adminStatistics/dashboard)
Agriculture Insurance: A Panacea for the Development … 319

Fig. 2 Model representing improving the efficiency of agriculture insurance

6 Conclusion

In many emerging countries, agriculture is still the most major industry. Agriculture
financing will contribute to the feeding of 9 billion people by 2050 by facilitating the
expansion of food value chains and enabling poor farmers to increase their wealth.
Global food demand is projected to increase by 70% by 2050, necessitating annual
investments of at least $80 billion [1]. However, the agriculture industry was badly
influenced by different uncertainties. These dangers not only put the stability and
security of the world’s food supply in jeopardy, but they also have the potential to
ruin livelihoods, disrupt value networks, and even threaten macroeconomic stability.
Agricultural insurance is a useful defense against these dangers. By shifting
climate risk to the private sector, it reduces the budget volatility of expenditures
connected to agriculture, increases budgetary interplanetary during disbelief times,
and encourages the expansion of the agriculture segment, which has the potential to
create jobs. Additionally, there may be less chance for financial fraud and corrup-
tion [7]. However, in order for farm insurance to grow and become sustainable,
there must be government involvement due to market imperfections and information
asymmetries [8, 9]. A major and ambitious programme called PMFBY was created
to safeguard farmers’ steady income in the event of agricultural unpredictability. It
is one of the most important experiments ever carried out since it may aid millions
of small, poor farmers.
A useful risk management tool, the RWBCIS provides greater protection at afford-
able premium charges [10]. Due to the challenges of weather data-related issues,
RWBCIS was not successfully implemented. To address these issues, a modern scien-
tific method for creating high-resolution secondary data was created, and the current
design of WBCIS Products was modified in accordance with sound agronomic prin-
ciples [11]. The maturing of the agricultural insurance system is a complex and
varied dynamic that, depending on the time, may display progressive, regressive, or
stationary features. It is governed by a set of standards and benchmarks, which have
the power to alter its components, subsystems, and structure. To grow and promote
our agriculture industry, the federal and state governments must work together.
320 B. Philip

References

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iculture-finance
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bima yojana (PMFBY). FIIB Business Review 9(4), 249–255 (2020)
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to the internet of ideas: The role of artificial intelligence. EAMMIS 2022. Lecture notes in
networks and systems, vol. 557. Springer, Cham (2023)
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willingness to pay for Rwbcis: determinants and empirical evidences from Jammu and Kashmir,
India. (2022)
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based crop insurance for risk management in agriculture. J. Agrometeorol. 22(2), 101–108
(2020)
The Impacts of COVID-19
on the Jordanian Economy: Evidence
from the Middle East

Mahmoud Al-Kofahi, Faraj Alfawareh, Aws Al-Okaily,

Abdalmuttaleb Al-Sartawi , Manaf Al-Okaily, and Hamza Alqudah

Abstract The main objective of this study is to investigate the effects of COVID-19
on a developing nation, namely Jordan. The study conducted an extensive exami-
nation of the effects of COVID-19 on the country’s gross domestic product, infla-
tion, unemployment, poverty, and the stock market through the adoption of a desk
research study method, with data collected from government websites, international
websites, online statistics, international and locally published reports, as well as
from previous studies. Based on the findings, the crisis of the COVID-19 pandemic
has brought about significant economic and financial changes in Jordan. It nega-
tively affected the gross domestic product, and employment in the country, triggered
panic buying, discrepancies in domestic production and distribution, and import
restrictions, resulting in inflationary economic pressure that was compounded by
headline inflation. Additionally, the COVID-19 pandemic has significantly impacted
the Amman Stock Exchange as well as the macroeconomic aspects; based on the
findings, poverty in the country may be worsened by the pandemic, which represents
a novel challenge in light of the type and quality of life in Jordan. Hence, the govern-
ment of Jordan has been using measures through varying strategies for short-term
adaptation and long-run survival. Correspondingly, this study has several implica-
tions for policymakers who are concerned with building a robust economy in the face
of the pandemic. To the best of the authors’ knowledge, this is a pioneering work

M. Al-Kofahi · H. Alqudah
Faculty of Administrative and Financial Sciences, Irbid National University, Irbid, Jordan
e-mail: [email protected]
F. Alfawareh
School of Economics, Finance and Banking, Universiti Utara Malaysia, Changlun, Malaysia
A. Al-Okaily
Graduate School of Business, Universiti Sains Malaysia, 11800 Penang, Malaysia
A. Al-Sartawi (B)
Ahlia University, Manama, Bahrain
e-mail: [email protected]
M. Al-Okaily
School of Business, Jadara University 733, Irbid, Jordan

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 321
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_25
322 M. Al-Kofahi et al.

that examines the impacts of COVID-19 on the economy of Jordan, thus, providing
an enriching insight into the awareness of COVID-19 impacts on the economic
development of Jordan.

Keywords COVID-19 · Jordanian economy · Jordan · Amman stock exchange

1 Introduction

The World Health Organization (WHO) declared the emergence of the COVID-19
outbreak in Central China in late December 2019, after which it proceeded to spread
to 216 countries, resulting in 400 million cases and 5.7 million deaths globally as
of 1st February 2022 [1]. Due to the extensive and ongoing COVID-19 pandemic
transmission worldwide, considerable challenges have arisen in the healthcare and
economies of different countries [2]. Additionally, the COVID-19 pandemic has been
proven to be the worst humanitarian crisis since World War II and the economic
crisis since the 1930s Great Depression [3, 4]. Moreover, there has been a significant
impact of the pandemic on the global value chains (GVCs), the network of domestic
production, trade, and services, which eventually affects the whole growth of the
nation. COVID-19 has triggered an economic crisis that is distinct from prior crises
[5], considering the scope and magnitude of the adverse effects on demand and supply,
leading to growth degradation that is compounded by economic restrictions [6].
In the context of Jordan, the Jordanian economy would face the likelihood of
losses because of the pandemic, as the output gap is approximated to be 3.5% lower
than the real potential [7]. Along with this is the pandemic’s major impact on the
stock market indices’ performance around the globe. Accordingly, [8] has argued
that the stock market fluctuations have stemmed from the investors’ concerns and
their pessimistic outlook on the future, whereby the pandemic has incurred market
losses. Notably, the pandemic’s contagion effect on the global stock markets has been
experienced in every country, including Jordan’s Amman Stock Exchange (ASE),
whereby regulated markets for trading securities have been affected by COVID-19.
Such losses have worsened since the financial crisis in 2008 and the Arab Spring in
2011 [9–12].
Correspondingly, many studies have delved into the coronavirus literature to
improve general insights into the effects of COVID-19 on the different aspects of
the economy in developed literature [13–19]. However, few studies have focused on
the coronavirus literature in developing markets; they focus mainly on the specific
sector such as tourism and sports [19, 20], the mining sector [21], the healthcare
sector [22], the oil sector [14], and sustainable energy transitions [23]. In Jordan,
most studies have focused on the effects of COVID-19 on small and medium-sized
enterprises [24–26]. Thus, this study derives its motivation from studies that have
focused on the impact of COVID-19 on the economy of Jordan [27, 28]. To address
this issue, the study aims to fill the gap by examining the COVID-19 effects on the
economy of Jordan during the COVID-19 period. Consequently, the gaps highlight
The Impacts of COVID-19 on the Jordanian Economy: Evidence … 323

the necessity to answer the main research question, “What is the extent of the impact
of COVID-19 on the Jordanian economy?”. Along this line, the study is motivated
to examine the effects of COVID-19 on the Jordanian economy as it is essential to
understand the economic outcomes of the outbreak and the subsequent shutdown,
considering information on the topic plays a key role in decision-making processes
such as the economic policies of Jordan during the COVID-19 period. The current
situation offers the researchers an opportunity to study the influence of COVID-19
on the economy of Jordan.
This research will add to the literature in the following ways, first, the study’s
findings are expected to contribute to understanding the COVID-19 effects on the
economy of Jordan and pave the way towards extending the literature in different
ways, the first of which is the exploration of the effects of COVID-19 on the economy
and stock market of a Middle Eastern country, specifically that of Jordan. Second,
the researchers contribute to the exponentially growing literature on the effects of
COVID-19 on economic activity [13, 29] and financial markets [30–32]. Third,
the current paper extends previous empirical studies on COVID-19 effects on the
economy of Jordan [27, 33]. Fourth, this study is a guideline for future studies
concerning COVID-19 on the economy of Jordan, boosting studies in the area.
Finally, the study also has implications for policymakers, financial regulators, and
economic experts in Jordan to enhance economic recovery during the crisis as well
as provide a deep insight for authorities to formulate agendas for enhancing the
confidence of investors and attract local and foreign investment to Jordan.
Accordingly, the remaining parts of the paper have the following parts and
contents: Section two contains a brief background on COVID-19 and Section three
provides an overview of Jordan. This is followed by literature that is related to
the topic, the study’s adopted research methodology, and the effects of COVID-19
on the economy of Jordan. The last two sections present the related policies that
are adopted by the Jordanian government and the ASE to contain COVID-19, the
suggested policies for the government, and the conclusion, respectively.

2 COVID-19 Brief Background

The ultimate comparison between COVID-19 and prior pandemics, such as the Asian
highly Pathogenic Avian Influenza (H5N1), Severe Acute Respiratory Syndrome
(SARS), Swine Flu, Middle East Respiratory Syndrome (MERS), and Ebola (see
Fig. 1), is too premature to be determined. Nevertheless, COVID-19 is considered to
be the third major outbreak of a novel coronavirus in the twenty-first century, after
SARS (2003) and MERS (2012) [35]. More importantly, COVID-19 which was first
reported in Wuhan in December 2019 was only declared to be a pandemic in March
2020.
Following the declaration of the COVID-19 pandemic, a few months later 100,000
COVID-19 cases were reported around the globe, and in March the number of cases
had doubled [1], an increase that occurred in the face of the adoption of several
324 M. Al-Kofahi et al.

Fig. 1 Pandemics in modern history. Source World Health Organization [1]

measures, including social distancing (physical distancing), telework, shutdowns of

schools and universities, cities quarantine, sports event cancellations, festivals, and
other public gatherings.
Furthermore, the pandemic has led to a heightened number of deaths and has
led to a decrease in economic, financial markets, and social activities worldwide.
Notably, the adverse effects have been minimized by the ICT advances, enabling
people to work from home and sustain economic activity and connectivity among
people [35–40].

3 Jordan Overview

Jordan is a country that is characterized by a low-resource base, with a GDP per

capita that is ranked 110th among the countries in the world [7]. Such a low ranking
is reflective of the unequal distribution of the economy in Jordan among the citizens
and the influx of refugees into the country. This is evident by the data showing that
15.7% of the population and 78% of the Syrian population in the country live under
the poverty line even prior to the COVID-19 pandemic [41]. Moreover, there is little
economic leeway to deal with the pandemic in a country where public debt is equaled
to 92.4% of the GDP of the country as of 2019 [41]. The economy of Jordan was also
unprepared for the closing of borders, and thus, there have been significant incurred
losses [42].
The Impacts of COVID-19 on the Jordanian Economy: Evidence … 325

3.1 Jordan’s Covid-19 Outbreak

Jordan, similar to other countries, is on unfamiliar ground when it comes to the

pandemic challenges. The government realized the pandemic’s critical health chal-
lenge earlier on and had adopted measures; the first confirmed case in the country
was reported on the 2nd of March 2020, from a male youth returning from his trip to
Italy [27]. By the end of May 2020, Jordan had reported 7881 cases of COVID-19
and by February 14, 2022, the country’s Covid-19 cases had reached 1.47 million,
with an accompanying 13,508 reported fatalities [43].

3.2 Healthcare System Response in Jordan

Healthcare capacity in Jordan has been a considerable challenge in the country

[44]. According to WHO’s ranking, Jordan’s healthcare system is one of the worst-
prepared during the pandemic, with Jordanian hospitals having 1.4 beds per 1000
population members (constituting around half of the world average) [42].
Similar to other countries, Jordan has been currently reporting a high number of
COVID-19 cases, which has urged the government to implement martial law, which
has led to a national curfew on the 21st of March, 2020. Following the first reported
COVID-19 case in Jordan (see Fig. 2), extensive contact tracing was implemented
with contact screening and mandatory hospital admission of laboratory-confirmed
patients. This was conducted along with a nightly curfew and a strict country lock-
down sealing the country’s borders on the 21st of March, 2020. The country passed
a Royal Decree passing the National Defense Law implementation. Such measures
were adopted at the initial pandemic stages, reducing the spread of the virus and its
effect on public health [44].

4 Literature Review

During the pandemic, the rising challenges and the effects on the economy have
to be understood to assist risk management and policymakers in decision-making,
which in turn would stabilize and develop a robust economy and the well-being of
the citizens. However, because of limited research on the topic of pandemic’s impact
on the global economy, a comparison can be made to the natural disasters in the past
that had affected the financial systems of the world.
Along this line of study, [46] have developed a theoretical model to investigate
the banking sector stability in the joint Malaria-AIDS prevalence. The study
showed the banking sector had collapsed and the eventual increase in the pandemic
occurred. Also, according to [47], the approximated national losses in the national
U.S. economy may arise in case of an influenza-related pandemic outbreak. The
326 M. Al-Kofahi et al.

Fig. 2 Daily cases graph. Source Johns Hopkins University[45]

study encompassed several fatalities from the pandemic and estimated the expected
number of related deaths to be 720,000 annually whereby the annual losses incurred
reached $500 million. Added to this, [48] looked into the possible impact of COVID-
19 mortality and economic activity through the comparison of the pandemic to the
Great Influenza Pandemic (1918–1920). A parallel evaluation of the economic GDP
declines heightened consumption, and fatalities, decreased realized real returns
on stocks, and short-term government bills brought on by the Great Influenza
Pandemic, to the Covid-19 to obtain lessons. The study reached the conclusion
that the present COVID-19 situation that brought on a decline in stock prices,
high stock-prices volatility, mitigated rates of interest, and real economic activity
contractions are common outcomes calling for timely and effective responses. The
COVID-19 pandemic has impacted the financial markets of countries and led to a
crucial risk level, causing a huge magnitude of losses among investors in a short
period of time [31].
Moreover, the aggregate and firm level stock returns during the real-time pandemic
were the topic that was explored in the USA; [19] study has indicated that changes
in the COVID-19 trajectory infections are useful in predicting real-time US stock
returns and that unexpected doubling of projected infections can predict a next-day
aggregate U.S. market value decrease of 4–11%, which indicates the possibility
of rebounding equity markets even in the pandemic period. In a related study, the
frequency of the influenza pandemic’s effects on the South African insurance industry
was the direction taken by [49]. Based on their study’s conclusion, the South African
economy would incur R1.1billion claims from a mild pandemic and R55 billion
claims from a severe one. In Saudi Arabia, [50] examined the way SMEs tackle the
required changes in their market survival strategy during the COVID-19 pandemic.
The conclusion showed that the Saudi government has demonstrated efforts and
The Impacts of COVID-19 on the Jordanian Economy: Evidence … 327

appropriated stimulus packages to maintain employment among SMEs. Many of the

enterprises were satisfied with what the government gave as proclaimed by the Saudi
government.
The above review of the literature shows that many of the undertaken studies are
linked to the pandemic and that their examined determinants have commonalities,
albeit their adopted methodologies that are varied, and only a few have concentrated
on the effect of the pandemic on the countries’ economies. Evidence shows that
past studies have not tackled this study’s topic scope and thus, keeping this into
consideration, the authors proceeded to examine the effects of COVID-19 on the
economy of Jordan.

5 Methodology

This study adopted the methodology of [51–54]. Accordingly, the study mainly
included a number of statistics obtained from a review of reports published by inter-
national agencies (i.e., the World Bank, the World Health Organization, the Organi-
zation for Economic Cooperation and Development, and the International Monetary
Fund) and Jordanian agencies (e.g., government websites, local documents, and local
newspaper). In addition, the study has employed keywords that are relevant to the
topic by focusing on a review of prior studies, determining economic key indicators
such as GDP, inflation, unemployment, poverty, the ASE market, the COVID-19
outbreak, and the Jordanian economy. Therefore, following the identification of the
needed documents, the authors reviewed their contents to determine what to include
and exclude based on their relevance to the study.

6 Discussion of Results

Globally, communities, businesses and organizations have experienced the impact

of the COVID-19 pandemic, which eventually affected the financial markets. To
compound the chaos further, governments’ response and lockdowns have disrupted
the activities of the economy, reducing goods production, implementing quarantines
and self-isolation policies, which in turn have led to decreased demand, consump-
tion, and use of services and products. On the 1st of February 2022, 400 million
confirmed cases were reported on a global level, with 5.7 million fatalities based on
WHO publications. Consequently, COVID-19 has led to an international economic
downturn because of adopted measures causing a depression that is akin to that of the
1930s. The causes behind the two crises may differ, with the recovery of the current
one expected to be quicker than that of the past albeit uncertainties abound as to how
long the recession brought on by the current pandemic will last and the aftermath in
the medium-term. These uncertainties include how businesses will rebound from the
328 M. Al-Kofahi et al.

lockdown and the possibility of the secondary waves that would force governments
to implement new lockdown measures.
However, there have been several outlooks of the global economy constituting
for the COVID-19 effects on the GDP, with the International Monetary Fund [IMF],
World Bank, and OECD expecting global GDP to contract in 2020 by 3.0–7.5% and
an increase in the global GDP in 2021 by 2.8–5.8% [4, 7]. Based on the forecast report
of the IMF, half a billion people could face poverty because of the pandemic while
the International Food Policy Research Institute (IFPRI) estimated a contraction of
the economy in 2021 that would result in people, approximately 140 million, to live
in poverty, resulting in increased food insecurity level in many countries worldwide
[55, 56].
In sum, the COVID-19 has damaged countries’ economies, and this is particu-
larly true for emerging economies around the world, with the effects of the pandemic
experienced more in small open economies, like that of Jordan in different ways.
First, this may influence economic sentiment and mitigate both investments and
consumption levels. Second, the restrictions imposed by the government have mini-
mized economic activities. Third, international trade and financial markets have been
affected, as a result of which global developments have digressed. Additionally, the
pandemic has affected public finances to a long-term extent, hand in hand with
the increase in public indebtedness. The primary effects originate from decreased
economic activity, minimized tax incomes, and measures that aim to compensate
for losses to the economy and those directed towards stimulating the economy to
its rebound path. Due to the importance of foreign trade and the well-contained
pandemic, it can be argued that international trade and financial markets’ effects will
take over the domestic pandemic and the actions of the Jordanian government. The
question thus arises as to how the pandemic could affect the economy of Jordan. In
this work, the extended literature on the COVID-19 pandemic economic effects and
the analysis of such impacts on the economy of Jordan are delved into.

6.1 GDP

Jordan is a country blessed with a low resource base, ranking 110 in the world based on
GDP per capita [42]. Such a low ranking may be attributed to the country’s unequally
distributed economy, with economic activities slowing down in 2020. Figure 3 from
the Department of Statistics [57] shows that supply growth has been led by the service
sector, with nominal contributions from the industrial and agricultural sectors. The
economic growth of Jordan has experienced the negative effects of the pandemic,
with GDP decreasing to −1.5% by the end of 2020. The real GDP showed an increase
of 2.7% in 2021, subject to the recovery in the post-pandemic global economy [57].
The forecast of GDP growth in Jordan is expected to be 2.8% in 2022, but over
the medium-term, growth is expected to remain low if Jordan’s structural issues and
economic challenges are not quickly and extensively addressed. Major challenges
The Impacts of COVID-19 on the Jordanian Economy: Evidence … 329

2.7 2.8

2 2.1 1.96
1.9

2016 2017 2018 2019 2020 2021 2022f

-1.5

Fig. 3 GDP growth percentage. Source Department of Statistics [57]. Notes f = forecast

and issues to the future outlook include a long economic decline in activities because
of the imposed lockdowns on the domestic level.

6.2 Inflation

Goods and services prices are affected by internal and external shocks, and with
the extensive proliferation of COVID-19 throughout the world, the general level of
prices is expected to increase all over the globe, which would contribute to inflated
economic pressure [58]. This holds true for Jordan, which was taken by surprise
by the pandemic, and left unprepared to face the ensuing global economic chaos.
Also, in comparison to other industrialized nations, the economy of Jordan is highly
sensitive, with over 87% of the caloric intake and 93% of the energy consumption
of the country dependent on imports, the same case holds for clothing, automotive,
and electronics. Thus, the current economic situation in Jordan has added to the
inflation occurrence in many ways; the immediate of which is the panic buying
among consumers, in expectation of the lockdowns in the country. Panic buying has
developed a huge excess market demand, which has not been stabilized by the market
mechanism. Figure 4 shows an increase in inflation from 0.40% in 2020, to 1.35%
in 2021, with only a 1.5 expected increase in 2022 during implemented monetary
policies and the slow COVID-19 brought on demands.

6.3 Unemployment

The report issued by the International Labor Organization describes the COVID-19
pandemic as the worst global crisis following the one brought on by World War II.
With half of the globe under lockdown, a loss of 195 million full-time jobs equating
to 6.7% of global working hours are lost [3]. The economy of Jordan appears to be
330 M. Al-Kofahi et al.

1.50
1.35

0.80

0.40

2019 2020 2021 2022f

Fig. 4 Inflation rate percentage. Source Department of Statistics [57]. Notes f = forecast

in low-growth equilibrium with a weak labor market and high structural unemploy-
ment. Based on the Department of Statistics [57] report, the pandemic has adversely
affected an already weak job market, with the rate of unemployment reaching 24.7%
in the 2020 fourth quarter. According to the Jordan Economic Forum [59], the unem-
ployment rate is expected to reach 24.8% in the final 2021 quarter and thus, based on
these forecasts, it is expected that the rate of unemployment in the country will reach
25.3% in 2022 because of the effect of the pandemic, driving local and international
lockdowns to mitigate supply and demand. Nevertheless, the annual jobs provided by
the economy of Jordan, a number from 30–40 thousand in comparison to the demand
for jobs that reach 100,000 every year. Figure 5 indicates that in the past years, the
unemployment rate in Jordan has shown a dramatic increase from 2015 up until
2021, with losses expected to continue in the following year (2022). Still another
issue that may influence the unemployment rate is the crowding-out effect of undoc-
umented migrants, whereby the country depends on migrant workers from Syria,
Southeast Asia, and Egypt [60], the majority of whom are working in agriculture,
textiles, domestic work, and construction. Most of such workers are undocumented,
estimated by the Labor Ministry to be several hundred thousand.

30.0%

25.0% 24.7% 24.8% 25.3%

20.0% 19.1%
18.3% 18.6%
15.0% 15.3%
13.0%
10.0%

5.0%

0.0%
2015 2016 2017 2018 2019 2020 2021 2022f

Fig. 5 The unemployment rate. Source Department of Statistics [57]. Notes f = forecast
The Impacts of COVID-19 on the Jordanian Economy: Evidence … 331

6.4 Poverty

The current COVID-19 pandemic has transformed quickly from a health crisis to a
global economic one with recessions forecasted by several international agencies by
2021, because of which, extreme poverty will arise all over the globe [4]. The virus
has permeated all the countries in the world leading to the mobilization of billions
of dollars to support enterprises, their workers, and families [61]. In the EU and
the US, large-scale support packages have been launched and International financial
and development institutions declared their inclination to support developing nations
with limited financial resources to address and contain the COVID-19 pandemic and
the ongoing effects of the same on the economy.
According to related literature [58, 62], in the worst-case scenario, a contrac-
tion of 20% is expected, with poor people (people living under the poverty line)
expected to increase by half a billion. Based on the additional number of poor people
throughout the regions, the majority of the world’s poor will be comprised of the
Middle East, East Asia, South Asia, and Sub-Saharan African regions. More specif-
ically, the poverty rate in Jordan’s citizen-population is expected to increase to reach
38%.
Furthermore, the social protection level needed for the complete offset of income
losses among poor households has the likelihood to be prohibitive, particularly as
government revenues have fallen due to a lack of economic activities. Hence, the
opening of the economy at a gradual pace would be critical for steering clear of
permanent job losses and an increasingly poor population throughout the country.
The economy re-opening and related support from the government to the sectors
may also pave the way for new opportunities for a sustainable transformation of the
economy. On the other hand, economic depression would ensure, with skyrocketing
unemployment rates and massive life losses, with millions driven to live under the
poverty line.

6.5 ASE Market

Mobilization of capital and provision of secondary markets to investors and finan-

cial institutions through buying and selling securities have played a major role in
stock markets [9, 63, 64, 72]. A liquid stock market arises when large transac-
tions are conducted with negligible effects on the securities prices. The COVID-19
pandemic has brought about the collapse of the stock markets in March 2020, leading
to most stock indices registering their highest one-day falls, and major companies
experiencing over 80% of their share prices falling within a mere few days [65].
It appears that the pandemic has the likelihood of causing bankruptcy among
major brands in many industries with lockdowns imposed and consumers following
the stay-at-home measures [66]. This is reflected by the enormous financial pres-
sure that is experienced by major U.S. firms such as Sears, Neiman Marcus, JC
332 M. Al-Kofahi et al.

Penny, Hertz, and J. Crew. This is also reflected in the travel industry when in 2020,
80% of hotel rooms have remained empty, airlines cut their workforce by 90%, and
tourist destinations remained stagnant and unprofitable [66]. Moreover, public activ-
ities including expos, conferences, sporting events, and large gatherings, including
cultural galleries, and museums have remained closed and empty. Lastly, major car,
truck, and electronic industries have also remained closed.
In effect, the COVID-19 pandemic has led to global financial unrest, with stock
markets collapsing in most of the developing nations [11, 58, 64]. This held true for
the Amman Stock Exchange in Jordan whose first half of 2020 had only reached 416
million (JD) in volume, lower than that of the previous year (668 million); several
Jordanian firms are faced with bankruptcy.

6.5.1 ASE Price Index Weighted

A dramatic decrease in the ASE price index weighted was experienced in the COVID-
19 pandemic, with a notable 1657 points as of 26th November 2020, in comparison
to 1808 points in the previous year. It can therefore be stated that the economy of
Jordan has been significantly affected by the pandemic [67]. Prior to the pandemic,
the Jordanian economy had already experienced adverse effects from the global
financial crisis and the Arab Spring, and it appears that the COVID-19 pandemic has
added to the shock, making it impossible for the Jordanian stock market to recover.

6.5.2 Market Capitalization of ASE

Based on the statistics in Fig. 6, the market capitalization on each Jordanian major
exchange was at JD15.5 billion in 2019, falling to JD12.9 billion in 2020, with a
continued decrease to JD1.4 billion in 2021. It is thus understandable that with every
strike of the COVID-19 pandemic, the market shrinks with uncertainties and risks,
leading to crashing world markets- the extent of which that has not been experienced
since the Global Financial Crisis of 2008, as such the Jordanian market is not an
exception. Thus, the Dow global market sank by 6%, indicating the highest drop
since March 2020 and the S&P500 experienced a decline of 3.5% in June 2020 [68].
Essentially, the pandemic sentiments have been unleashed upon foreign and domestic
investors and have been reflected in the stock market. It is expected that following
the pandemic, business and economic normalcy will ensue, after which the stock
market will rebound.
The Impacts of COVID-19 on the Jordanian Economy: Evidence … 333

18,00,00,00,000
16,00,00,00,000 16,80,55,50,801 16,92,33,65,131
15,52,33,95,121
14,00,00,00,000
12,91,73,96,121
12,00,00,00,000 11,50,16,75,682
10,00,00,00,000
8,00,00,00,000
6,00,00,00,000
4,00,00,00,000
2,00,00,00,000
0
2018 2019 2020 2021 2022

Fig. 6 Market capitalization of ASE (JD Billion). Source: ASE website [67]

7 The Economy Recovery Policies in Jordan During

the Covid-19 Pandemic

Globally, the pandemic has brought overwhelming economic consequences for every
country. The entire society is affected, leading to dramatic changes in businesses and
the behavior of consumers [66]. Great progress has been made in Jordan for economic
reformation, but remaining challenges have yet to be settled. The ongoing impacts of
COVID-19, along with the regional conflicts and the influx of Syrian refugees into
Jordan, are the current challenges that the country is facing [4, 71]. This has urged
the government to implement several measures to boost the economy and mitigate
the effects of the pandemic on businesses and their employees, which include the
following:
1. The government has appropriated two major funds to help enterprises face risks–
the first is managed by the government, which is gathered from entities and
individuals’ donations, while the other is managed by business leaders and is
referred to as Himmat Watan Fund (Nation’s Efforts) that is gathered from the
private sector donations. Additionally, the Central Bank of Jordan established
a fund for struggling SMEs to request soft loans or low-interest loans from
the Jordan Loan Guarantee Corporation (loan guarantor). SMEs that address the
loans are not allowed to let go of employees during the loan duration [62, 78, 79].
2. In March 2020, the International Monetary Fund’s Executive Board approved an
initiative of a $1.3 billion Extended Fund Facility to minimize the virus’s effects
on the struggling sectors and individuals in the economy [69].
3. From 3rd March 2020 onwards, the Central Bank of Jordan dropped interest rates
by 0.5 points (from 4–3.5%), and from 16th March 2020 onwards, by 1 point
(from 3.5–2.5%), enabling the rescheduling of loans by banks particularly among
virus-ridded sectors at no cost till the end of 2020 [70]. The cash reserve require-
ment was also reduced for banks by 2% (7–5%) for the release of additional
liquidity amounting to JD550 million.
334 M. Al-Kofahi et al.

4. The government of Jordan has delayed the collection of sales tax from the local
sectors and enterprises, particularly for those who are dealing with food supply
and healthcare until the goods are sold, as opposed to upon contract signing
[73–77].
5. Other daily works have not been halted by ASE with emergency plans still
ongoing for remote work prior to the closing and equipping the technical infras-
tructure that is required for launching such works. In addition, ASE depart-
ments have been mandated to follow steps for ongoing remote work and have
been updated with the relevant plans and strategies, in terms of the market
developments and the trends in the local and international arena [80–84].

8 Suggested Policies for the Jordanian Government (What

Can the Jordanian Government Do?)

Like governments all over the world, the government of Jordan has proclaimed
several measures for the prevention of total collapse. While the government has been
adopting measures to mitigate the damage that has been wrought by COVID-19, they
are not sufficient solutions [85–89]. Hence, the following guidelines are suggested
to further minimize the negative effects of the pandemic on the economy of Jordan
in the form of in-exhaustive measures that would stimulate economic growth:
1. Revival of consumption can be brought about through tax cuts on businesses
and goods. In addition, income-tax reductions raise the disposable income of
employees, thus encouraging them to spend.
2. Due to the seemingly insurmountable magnitude of the COVID-19 effects, the
measures to contain it by the Jordanian government have formed a vulnerable
macroeconomic situation, and with the decrease in tax revenue that is related to
the lockdown, the government of Jordan needs to mobilize additional resources
or search for other sources to restore and maximize the revenues to address the
pandemic.
3. Encourage investment in modern infrastructure, research and development (R &
D), as well as assistance for small and medium-sized enterprises (SMEs) (e.g.,
direct loans; loan guarantees). The aim is to maintain competitiveness and provide
a new basis for development while also taking advantage of the downturn to
start working on numerous long-term goals, such as lowering unemployment,
increasing GDP, and growing investment.
4. Cutting interest rates makes borrowing cheaper and increases the disposable
income of companies and households, leading to higher spending. In addition,
the government should increase healthcare services and testing facilities for
COVID-19.
The Impacts of COVID-19 on the Jordanian Economy: Evidence … 335

9 Conclusion

This work presented an enriching insight into promoting awareness of the effects of
COVID-19 on the economy of Jordan with statistical figures and theoretical under-
pinnings. The study made use of indicators of the economy, including GDP, infla-
tion, unemployment, poverty, the ASE Index, and market capitalization in the ASE
Market. Based on the findings, COVID-19 has had and is still having a significant
effect on the economy of Jordan. Thus, for the economy of the country to recover,
economic policies need to be adopted at the national level. The government should
plan for the long and short-term in addressing and resolving the crisis.”. Thereby, this
study recommends that policymakers conduct clear debates concerning alternatives,
provide instances of creative solutions to respond to the pandemic, and transition to a
sustainable, resilient, and equitable future economy. It is suggested that the govern-
ment promotes a positive environment for both local and foreign investments to
reboot the growth of the economy, and policies should be adopted that direct towards
the economic activities of businesses for economic revival. Consequently, the govern-
ment of Jordan should carry out extensive planning for enhancing the economy by
enabling businesses to operate more efficiently so that the adverse impact of the
pandemic on the long-term economy of the country is mitigated, along with the level
of employment and income losses, and eventually, poverty.
Despite the contributions of this study and its findings, it has its limitations,
the first of which is the fact that it is just a preliminary study, which requires a
follow-up examination at varying levels of oversight of the impact of the pandemic,
on the economy of Jordan. Another limitation relates to the major determinants of
the economy of Jordan; thus, it is suggested that future studies focus on specific
economic sectors such as the industrial and service sectors in Jordan. They may
also focus their concentration on the direct effect of COVID-19 on the Jordanian
enterprises’ performance. Finally, studies can delve into the effects of COVID-19
on other developing countries’ stock markets and provide a global picture of the
aggregate results.

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Innovation and Creativity an Important
Ingredient in the Future Growth
and Sustainability of SMEs

Saad Darwish , Vannie Nadoo , and Umair Ahmed

Abstract SMEs are the lifeblood that is essential to any country or nation. SMEs
throughout the world add to a country’s GDP, stimulate a country’s economy, and
contribute to its prosperity and future sustainability. The importance of SMEs can
never be undervalued by a country’s government and leadership as they form the
backbone in providing a steady stream of employment to many people in the commu-
nity. However, like all evolving environments, SMEs’ is part of a complex macro-
environment that is dynamic and constantly changing. SMEs must keep abreast of
the changes in technology to grow and remain sustainable. In times of the COVID-
19 pandemic, an important lesson for SMEs is that they needed to move to digital
platforms to be sustainable. Since, information technology improved psychological
empowerment as well as organizational performance, this can assist organizations in
increasing psychological well-being among employees while also increasing organi-
zational efficiency, allowing them to achieve greater levels of success in their respec-
tive fields of endeavor. The results of this study corroborated previous research that
has pointed to the potential benefits of digital transformation in terms of enhancing
organizational outcomes. In contrast, innovation possibilities failed to have any effect
on the performance of the companies in question in the study. A plausible cause might
be the kind, nature, and sector of the inquiry, which would urge that further tests be
performed before the findings can be generalized. Notably, in Bahrain’s SMEs, inno-
vation prospects were found to be promising in terms of organizational performance
and psychological empowerment of workers, among other things.

Keywords Innovation · Organizational performance · Psychological

empowerment · SMEs

S. Darwish (B)
Kingdom University Bahrain, Riffa, Bahrain
e-mail: [email protected]
V. Nadoo
University of KwaZulu-Natal, Durban, South Africa
e-mail: [email protected]
U. Ahmed
Arab Open University, Aali, Bahrain

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 341
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_26
342 S. Darwish et al.

1 Introduction

1.1 Research Gaps

There are gaps in the adaption of technology by SME’s in Bahrain. Another gap in
the study is that SME owners have challenges adapting innovation and creativity to
their business. This can lead to poor growth in the business. Possible business failure
can also occur if SMEs are not up to date with new technology and provide creative
and innovative ways to service their customers and clients.

1.2 Research Design

The study follows a quantitative approach where a survey was conducted. A closed-
ended questionnaire was used to collect information from Bahrain SME owners on
how they adapt innovation and creativity into their business by embracing the new
technology. The questionnaire was developed using a 5-Point Likert scale. The popu-
lation of the study were SME owners in Bahrain. The researchers used convenient
sampling. The sample was chosen from 50 SMEs’s registered in the Department of
Industry, Commerce, and Tourism. Data from the study was analysed, and descrip-
tive and inferential statistics will be put forward and discussed in this paper. In the
study the average variance, composite reliability scores, and loading of the items that
measured reliability and validity will also be included in the discussion of results.

1.3 Literature Review and Hypotheses Development

SME’s in Bahrain has an important role to play in the continued sustainability of

the country’s economic wellbeing and success. For SMEs to keep abreast of tech-
nological changes and remain viable and lucrative in an industry, they must digi-
tally transform their business operations. This in turn contributes favorably to their
overall efficiencies thus improving SME performance. [5, 25] argues that due to
globalization and the quickly evolving technical environment, the fourth industrial
revolution has made the business environment more complex. Owners of SMEs
must always stay up to date with changes in the technical environment. For SMEs
to thrive, expand and survive in in the raging era of technology entrepreneurs must
concentrate on creativity and innovation to stay competitive in their relevant business
sectors. Digitization of SMEs can become their tool in maintaining their competitive
advantage in the industry within which they operate. Westerman et al. [38] posit that
successful digital transformation entails altering businesses so as to take advantages
of digital technologies and in due course attain a competitive edge. To improve perfor-
mance SME’s need to adopt technology that can increase their overall efficiencies
Innovation and Creativity an Important Ingredient in the Future Growth … 343

and improve their profits margins. Aligning their strategies towards catering to their
customers’ needs is imperative. Since customers engage in online shopping especially
during the COVID-19 pandemic meant small businesses needed to adopt technolo-
gies into their business operations. Dobbelstein and Naidoo [13] argues that because
the fear of contracting the virus while shopping, is a major worry among millennials,
it is necessary for marketers to make available additional online shopping options in
the techno-savvy market segment. SME’s need to therefore provide their customers
in Bahrain with online shopping options. This would develop a new market segment
(online shoppers) and maintain the profit margins during the pandemic. Zwingina
and Opusunju [42] argue that SME performance measures have been defined in terms
of sales level financial, production, and market indicators. If technology is used to
enhance these areas, the SME’s performance will also be improved.
Based on the aforementioned discussion, we formulated Hypothesis 1.
H1: There is a positive relationship between information technology use and
organizational performance in SMEs
Entrepreneurial actions are linked to an entrepreneurial spirit that is related to a
determination to achieve business goals, acceptance of knowledge acquisition and
effective learning, exploration of growth opportunities, and willingness to take risks
to affect business competitiveness [4]. If SME owners and managers want to improve
knowledge management practices and innovation activities in their firms, they should
focus on supporting staff training, creating suitable working conditions, and building
a supportive corporate culture [7].
Innovation techniques have a significant positive impact on SME success. Idea
generation supports both formal and informal processes of innovation. Both internal
and external SME barriers are a source of ideas. The culture of a SME makes it
easier to invest in innovative concepts. For instance, SMEs with formal innovation
processes exhibit a higher risk-taking mindset than SMEs with informal innovation
processes [42]. The capacity of SMEs to generate new products and manage new
business processes that add value will also determine how quickly they adopt inno-
vation [3–5]. The concept of Innovative Work Behaviour (IWB) entails the use of
alternative methods of reasoning, a constant search for improvements, the pursuit
of novel methods for carrying out tasks, the exploration of novel technologies, the
application of various work strategies and methods, and the provision of resources
to enable the realization of new ideas [40]. Traditional business models are being
replaced with flexible business models that are knowledge-based, quick to adapt, and
able to react in real time to customer preferences. When the effects of Industry 4.0 on
the business world are examined, it is noted that manufacturing and manufacturing
processes become more practical, the supply chain is better, the cost of infrastruc-
ture and energy is lower, less human resource is needed, qualified manpower is
more abundant, and income and profit levels are increased [35]. According to [7,
8] in order for knowledge management to have an impact on the performance of
small and medium-sized enterprises (SMEs), it is necessary for innovation to act
as an intermediary factor. Knowledge management consists of various components,
including strategies and policies, knowledge acquisition, organizational culture, and
344 S. Darwish et al.

employee training [3, 37]. It has been discovered that strategies and policies, knowl-
edge acquisition, and organizational culture have an influence on innovation, while
training does not directly affect innovation. [23] posit that for SMEs to be sustainable
and successful they need to have a good social network. These can be in connec-
tion with networks that have been established outside of the firm such as research
institutions, government agencies, competitors, suppliers, customers, and any other
potential organization.
After considering the aforementioned discussion, Hypothesis 2 was formulated.
H2: There is a positive relationship between innovation atmosphere and
organizational performance in SMEs
In terms of product, process, organizational, administrative, managerial system, as
well as marketing innovation, innovation has been categorized [42]. SMEs frequently
carry out marketing innovations by creating and putting into practice improved
approaches for product, price, and promotion [1]. Thus, incorporating client needs
and ideas into the innovation process is essential for successful innovation [7]. SMEs
are prepared to take part in cutting-edge activities that advance their technology.
According to [39], SMEs also work to construct control mechanisms in a participa-
tory manner and engage in the creation of open and successful innovation strategies.
Online software, according to [20] can make creating billing and payment papers
simple. As posited by [6, 7], inventory is the periodic and ongoing observation of
inventories with the goal of determining average selling and buying prices. In order
to assure that goods will be available, it also provides information about the stock
of popular items. Social media has become a popular way to communicate with
clients and get their input right away. For instance, SMEs strongly favour the use of
WhatsApp and, to a lesser extent, Twitter and Facebook in the food industry, notably
the restaurant business [29]. According to the studies of [42], innovation affects the
performance of SME. Product development promotes strategic marketing. Further-
more, the adoption of cutting-edge marketing technologies can influence SME perfor-
mance [14]. Networking setup and capabilities are introduced by [30]. According
to their definition, networking capacity is the capacity to access resources within
a network by means of relationships. They went on to say that these talents also
include the ability to coordinate tasks, maintain connections, understand partners,
communicate internally, and form new partnerships. However, they define network
configuration as the kind of connections made by the ties between the players. These
typically include networking with business partners and customers. Further sugges-
tions regarding the impact of network configuration and capabilities on creativity and
how network capability affects SME performance were given by [30]. According
to [28] argues that previous research have looked at technologies on the whole
and have discovered a number of elements that affect an organization’s decision
to embrace information and communications technologies (ICTs). These factors can
be grouped into the following: organizational characteristics (such as the size and
nature of the firm), historical performance, concerns regarding privacy and security
(such as uncertainties about internet security as well as legal issues), resistance to
change, financial limitation, exorbitant nature of computers and network, shortage
Innovation and Creativity an Important Ingredient in the Future Growth … 345

of qualified workers, limited understanding of necessary technology, limitations in

infrastructure, marketing challenges, competition, locating trustworthy technology
management consultants and suppliers, establishing guidelines for suitable hard-
ware and software, as well as the adoption of ICT and e-commerce through support
programs for digital transformation.
On the basis of the aforementioned discussion, we constructed Hypothesis 3.
H3: There is a positive relationship between innovation opportunities and
organizational performance in SMEs
Digital transformation can play an instrumental role in harnessing several strengths
among employees. [38] posit that successful digital transformation is about changing
businesses to leverage digital technologies and ultimately attaining competitive
outcomes. We assert that the availability of technological tools and resources to
focus on innovation can help boost the employees‘ cognitive resourcefulness, thus
predicting psychological empowerment. The authors argue that such prospects would
help businesses to enable their employees to experience the freedom to be creative
and innovative which would lead to harnessing their beliefs about being empowered
individuals. Though not much has been investigated in this regard, a few scholarly
traces can be noted. First, following the findings of [15] findings, we assert that
providing robust information technology use, innovation platforms, and innovation
opportunities can serve as prospects for employee empowerment which can nourish
their psychological resources. Second, in their recent study, [21] also underlined that
an innovative organizational climate can boost employees’ psychological empow-
erment, which further aids to promising outcomes. Innovation entities have been
reported instrumental in improving employees’ work behaviors which ultimately
results in harnessing organizational performance outcomes. Thus, we hypothesize
that information technology use, innovation atmosphere, and innovation opportuni-
ties will be positively related to employees‘ psychological empowerment. Hence, we
test the following:
H4: There is a positive relationship between information technology use and
psychological empowerment

H5: There is a positive relationship between innovation atmosphere and

psychological empowerment

H6: There is a positive relationship between innovation opportunities and

psychological empowerment
Scholars have indicated how psychological empowerment can benefit organizational
performance prospects [9]. Individual psychological wellbeing can harness s sense
of commitment and dedication towards the work and organization [27], thus boosting
organizational performance. Accordingly, scholars have also argued that harnessing
psychological empowerment can help employees show a greater level of organiza-
tional citizenship behavior [3], which can be referred to as a significant contributor
towards enhancing the results of an organization. In parallel, a prominent study has
346 S. Darwish et al.

also indicated how psychological empowerment can result in performance conse-

quences ([2]. Thus we assert that psychological empowerment will play an instru-
mental role in enabling employees to boost their contribution towards organizational
performance. Therefore we tested the following.
H7: There is a positive relationship between psychological empowerment and
organizational performance in SMEs
There are many drivers of innovation. The improvement of innovative capabilities in
SMEs and ultimately performance is influenced by the internal business environment
[1, 5, 6]. If staff within the SME are driven by physiological empowerment, then this
will have a positive bearing on the innovative atmosphere generated within the firm.
This ripple effect will further drive excellent returns in organization performance.
Past studies established that psychological empowerment plays an important role
in nourishing employees’ innovative work behavior [1–6, 24]. Employees will expe-
rience a sense of meaning if they believe their work is vital, which will motivate them
to take initiative and be more creative at work [9]. When highly competent individ-
uals in SMEs are confident in their knowledge and abilities to come up with ideas
and put those ideas into practice at work. They take more time to pinpoint and come
up with solutions to problems [19]. Self-determination is important to employees
within SME’s. Perceived autonomy grants employees increased chances to explore
and test their fresh ideas and is positively related to innovative behavior [33, 42].
On the basis of discussion above, we came up with the following.
H8: Psychological empowerment mediates the relationship between innovation
atmosphere and organizational performance in SMEs
From a definition given by the European Commission (EC), Industry 4.0 consists of
several emerging and innovative technologies (EC, 2015).
The utilization of ICT enables the digitization of information and the integration of
systems throughout all stages of product creation and usage, encompassing logistics,
supply, and internal and external company operations.
Intelligent systems leverage ICTs to effectively control or monitor mechanisms.
These systems may incorporate embedded sensors, intelligent robots capable of self-
configuration to accommodate specific product requirements, or 3D printing devices.
Internetworking, encompassing wireless and internet technologies, facilitate
the interconnection of machines, work products, systems, and individuals. This
connectivity extends to the manufacturing plant as well as suppliers and distributors.
The application of simulation, modeling, and virtualization plays a pivotal role in
product design and the creation of manufacturing processes.
Analysis and exploitation of big data occur either directly on the factory
floor, or through cloud computing resources (such as database, analytics, artificial
intelligence, networking, amongst others).
Digital assistance systems such as intelligent aid systems, augmented reality tools
(intended to enhance the both the real and virtual world), and robots, are developed
to support the cognitive abilities of staffs.
Innovation and Creativity an Important Ingredient in the Future Growth … 347

Within the SME, if staff is driven by high levels of physiological empower-

ment then this will filter through positively in them taking active initiatives in
innovation opportunities that can improve the firm’s organizational performance.
Psychological empowerment is a motivational concept that consists of four scopes
(meaning, self-determination, competence, and impact) about individual orientation
[33]. Employees with similar value as their organization, are likely to intensify their
involvement in the job and augment their innovative behavior [32]. Recently, “mean-
ing” was well-thought out to be the standard of work on the basis of the interpretation
of a person about a job [21]. It is how a person perceives his job to important [18].
On the basis of the aforementioned, we hypothesized the following:
H9: Psychological empowerment mediates the relationship innovation oppor-
tunities and organizational performance in SMEs
Nambisan et al. [26] argue that digital technologies have fundamentally reshaped
business processes, products, and services, as well as inter-firm relationships, greatly
reducing the difficulty and costs of resource shifting. The following are ways in which
SME’s can be digitally transformed:
1. To identify who will be responsible for what, the management must request a
data-based digital transformation. SMEs with requirements and needs analysis
are able to create quantifiable goals with clarity. The management can examine
the issues around digitalization, the potential contributions of new technology,
and potential new business models. After that, they can provide training and
benchmarking to assist SMEs.
2. In order to digitally transform operations, small and medium-sized enter-
prises (SMEs) must embrace a culture of learning. This entails having skilled
employees, providing training for current staff, identifying necessary abilities and
skills, and addressing any skill gaps. It is also important to consider hiring indi-
viduals with digital expertise, such as IT specialists and socioeconomic support
professionals.
3. SMEs should develop a clear roadmap detailing their business objectives to aid
in digital transformation. These objectives should be founded on the digital
transformation process, and span a range of factors including time, money,
space, and quality. They involve tasks like creating a new digital strategy for
SMEs, examining the current business model, figuring out what customers want,
assessing digital capabilities and expectations, setting goals, building competen-
cies, compiling best practices for digital transformation, looking into different
options for using information technology and digital business models, assessing
progress, creating a digital value network, and getting customer feedback.
4. Raising awareness about digital technology and fostering a supportive atmo-
sphere It can also assist in establishing obvious communications between
entrepreneurs and IT specialists as regards expectations and deliverables so as to
avoid dishonesty [23].
348 S. Darwish et al.

5. Seeking guidance from experts in SME support, innovation labs, and research
institutions for successful digital transformation, would be of tremendous benefits
to SMEs.
6. Governments and stakeholders like Trade Associations and Chambers should
support SMEs in their digital transformation, aiding in requirements analysis
and accessing assistance [6].

If staff in SMEs are easily adapting to new technology usage within the firm’s
business processes, then psychological empowerment amongst these staff will be
high and can positively impact the firm’s overall success and business performance.
According to empirical research, competency positively correlates with a number of
employment outcomes, such as job involvement [11], creative performance [41] etc.
Numerous employment outcomes have been studied in relation to self-determination.
According to research, work satisfaction, organizational commitment, and innovative
performance [31, 33], have been discovered to be favorably correlated with job
performance [34]. Impact, then, refers to a person’s perception of their ability to shape
professional outcomes. Research in this area has discovered a favorable correlation
between impact and other outcomes.
On the basis of the aforementioned discussion, we assumed the following.
H10: Psychological empowerment mediates the relationship between informa-
tion technology use and organizational performance in SMEs

2 Methodology

Structural equation modelling using Smart PLS 3.0 was deployed for the purpose
data analysis. PLS-SEM has gained much appreciation due to its strong predictive
nature. Therein, two step approach was deployed.
Assessment of Measurement Model
For the assessment of the measurement model, the algorithm was applied through
Smart PLS3. In the assessment of the measurement model, current research assessed
the reliability and validity of the research construct. For reliability and validity assess-
ment, current research checked for average variance, composite reliability scores, and
loading of the items. [16] stated that validity is achieved when there are composite
reliability scores of 0.70 and above. Convergent validity can be achieved when AVE
is 0.50 and above [10] and item loading is 0.50 and above. Table 1 represents current
research results about loading, composite reliability, and average variance extract.
Results stated in Table 1 show that current research has achieved sufficient reliability
and validity.
Innovation and Creativity an Important Ingredient in the Future Growth … 349

Table 1 Assessment of
Construct Loading CR
reliability and validity
AVE
Information technology use 0.923 0.750
ITU1 0.809
ITU2 0.899
ITU3 0.863
ITU4 0.889
Innovation atmosphere 0.965 0.824
IA1 0.934
IA2 0.942
IA3 0.944
IA4 0.936
IA5 0.904
IA6 0.774
Innovation opportunities 0.919 0.739
IO1 0.808
IO2 0.910
IO3 0.890
IO4 0.826
0.896 0.553
OP1 0.677
OP2 0.684
OP3 0.745
OP4 0.792
OP5 0.760
OP6 0.781
OP7 0.761
Psychological empowerment 0.892 0.547
PE1 0.523
PE2 0.684
PE3 0.699
PE4 0.834
PE5 0.789
PE6 0.813
PE7 0.786
350 S. Darwish et al.

Table 2 represents the square root of AVE which is used to assess the discriminant
validity in the research. The square root of the AVE approach is known as [16] criteria
to assess discriminant validity. Results depicted in Table 2 show that current research
shows an adequate level of discriminant validity in the model.
Besides the square root of AVE, current research also checked HTMT inference
recommended in [17]. Recommended range of HTMT is as below HTMT0.85 or
HTMT0.90. In the results of the current study, all HTMT values were within the
threshold of HTMT0.9. Results regarding HTMT values are presented in Table 3.
Variance in endogenous variables has also been assessed in current research. Vari-
ance in endogenous variables was assessed by checking R2 values. Results regarding
R2 are presented in Table 4. The current study found 69% variance in organizational
performance, and 66.4% variance in psychological empowerment was observed due
to predictor variables.
Besides variance, the effect of each independent variable on the dependent variable
was also checked in current research through effect size f2. [12] recommended the
effect size values effect size of 0.02 is known as low, 0.15 treated as medium, and
0.35 known as strong. Results regarding effect size are stated in Table 5. The highest

Table 2 Square root of AVE

ITU IA IO OP PE
IT use 0.866
Innovation atmosphere 0.568 0.908
Innovation opportunity 0.609 0.518 0.860
Organization performance 0.663 0.533 0.791 0.744
Psychological empowerment 0.697 0.640 0.761 0.707 0.740
All bold values show square root of Ave

Table 3 HTMT criteria

ITU IA IO OP PE
IT use ==
Innovation atm 0.613 ==
Innovation opp 0.689 0.562 ==
Organization perf 0.750 0.584 0.887 ==
Psychological emp 0.793 0.703 0.814 0.795 ==

Table 4 R-Square values R2

Construct R2 Adjusted R2
Organizational performance 0.690 0.684
Psychological empowerment 0.664 0.659
Innovation and Creativity an Important Ingredient in the Future Growth … 351

(0.423) effect was shown from innovation opportunity on organizational performance

and the low effect (0.003) was shown from innovation atmosphere (Fig. 1).
Assessment of Structural Model
Current research also assessed the structural model through bootstrapping in which
path co-efficient and testing of hypothesis were assessed. Out of 10 hypotheses, six
direct and one indirect hypothesis were accepted. One direct and 2 indirect hypotheses
were found insignificant and were rejected.
The hypothesis proposed between information technology (ITU) use and organi-
zational performance was measured and the current study found (β = 0.207, t value
3.587, p-value 0.000) based on the current research findings hypothesis was showing
positive significant results so, therefore, the hypothesis was accepted. Similarly, the

Fig. 1 Measurement model (PLS-Algorithm).Sample

Table 5 Effect size (f2)

Construct OP PE Effect
ITU 0.065 0.155 Low on OP, medium on PE
IA 0.003 0.128 Low on OP, medium on PE
IO 0.423 0.268 Strong on OP, medium on PE
PE 0.026 − Low
352 S. Darwish et al.

hypothesis between ITU and psychological empowerment also found positive signif-
icant results (β = 0.310, t value 5.342, p-value 0.000) based on findings hypothesis
was accepted. While the hypothesis between innovation atmosphere (IA) and organi-
zational performance was found insignificant (β = 0.040, t value 0.775 p-value 0.438)
so hypothesis between IA and OP was rejected. Apart from this, hypothesis between
innovation opportunity (IO) and OP (β = 0.533, t value 9.881, p-value 0.000), IO
and psychological empowerment (PE) (β = 0.392, t value 6.799, p-value 0.000),
PE and OP (β = 0.154, t value 2.079 p-value 0.038) were found positive signifi-
cant and were accepted. Moreover, results of structural model assessment regarding
hypothesis testing are mentioned in Table 6 and Fig. 2.
Assessment of structural model during indirect hypothesis testing (mediation)
found positive significant results of mediation by psychological empowerment
between information technology use and organizational performance (β = 0.048,
t value 1.989, p-value 0.047) hence hypothesis ITU·PE·OP was accepted, psycho-
logical empowerment insignificantly mediated the relationship between innovation
atmosphere and organizational performance (β= 0.040, t value 1.939, p-value 0.053)
hypothesis was rejected due to higher p-value than the threshold. Similarly, psycho-
logical empowerment was also proved as an insignificant mediator between the rela-
tionship of innovation opportunity and organizational performance (β = 0.061, t
value 1.878, p-value 0.060) based on insignificant results in hypothesis IO·PE·OP
was rejected.

Fig. 2 Structural model (Bootstrapping)

Innovation and Creativity an Important Ingredient in the Future Growth … 353

Table 6 Assessment of structural model

Path Beta SD T value P value Decision
ITU·OP 0.207 0.058 3.587 0.000 Accepted
IA·OP 0.040 0.052 0.775 0.438 Rejected
IO·OP 0.533 0.054 9.881 0.000 Accepted
IA·PE 0.261 0.057 4.563 0.000 Accepted
ITU·PE 0.310 0.058 5.342 0.000 Accepted
IO·PE 0.392 0.058 6.799 0.000 Accepted
PE·OP 0.154 0.074 2.079 0.038 Accepted
ITU·PE·OP 0.048 0.024 1.989 0.047 Accepted
IA·PE·OP 0.040 0.021 1.939 0.053 Rejected
IO·PE·OP 0.061 0.032 1.878 0.060 Rejected

3 Discussion

The study has attempted to address several empirical gaps by exploring how the infor-
mation technology use, innovation atmosphere, innovation opportunities, psycho-
logical empowerment, and organizational performance interact in a mediated model
in SMEs. Information technology positively enhanced psychological empowerment
as well as organizational performance thus indicating that the use of information
technology can help organizations to bring more psychological well-being among
employees and also help bring more efficiency in the organizations to further their
performance. The findings support prior studies [38], which indicated digital trans-
formation’s benefit in improving organizational outcomes. In comparison innovation
opportunities failed to pose any influence on organizational performance. A plau-
sible reason could be the type, nature, and sector of the investigation thus, suggesting
further tests before generalization of the results. Notably, innovation opportunities
were seemed to be promising in organizational performance and employees’ psycho-
logical empowerment in the SMEs in Bahrain. This indicates that SMEs providing
employees with innovation opportunities help them to enrich their psychological self
and the way they work to predict organizational performance. The findings confirm
that innovation influences SME performance [42].
About mediation, psychological empowerment mediated the relationship between
information technology use and organizational performance. This indicates that
employees who were provided with resources about information technology use were
able to enhance their psychological empowerment that enabled them to bring better
performance prospects to boost organizational performance. Furthermore, employee
psychological empowerment also worked effectively in predicting organizational
performance which confirms the assertions of [36]. Surprisingly, contrary to our
assertions, psychological empowerment did not mediate the association of innovation
atmosphere and innovation opportunities with organizational performance.
354 S. Darwish et al.

Implications for Theory and Practice

“Innovation” and “Entrepreneurship” are often used interchangeably in today’s
global community. It’s common for people to assume they mean the same thing,
but it would be a terrible mistake. Even though they have a familiar concept, innova-
tion is a fresh idea or solution using one’s creativity, thanks to technological advances,
components can now do things they couldn’t do previously. Every society relies on
innovation, and those who excel at it have the potential to be enormously wealthy.
Both notions are necessary for the survival and growth of small and medium-sized
businesses (SMEs).
Risk-taking, visionary, and a limited tolerance for bureaucracy are all essential
for small businesses. Financial, personal, or professional risk-taking is common in
small businesses. While SMEs are more inclined to take business risks, innova-
tors are more likely to take risks that challenge an idea. A creative thinker can bring
together unrelated problems or concepts from several fields through effective connec-
tions. SMEs and innovators are both necessary for a company to remain competitive.
Even if entrepreneurs know what choices need to be made, innovative thinkers know
precisely how to put those choices into action to achieve a particular goal.
On the other hand, SMEs use innovation to bring their goals and ideas to life.
Thanks to this societal innovation, people can now do things they couldn’t before.
Small and medium-sized enterprises (SMEs) seize possibilities to profit from inno-
vation. They create enterprises and advocate for the advancement of technology.
Outstanding SMEs make more money than great inventors, and this is because
progress is dependent on SMEs.
If our young people are enterprising and take chances, we want them to have a
healthy sense of their worth grounded in reality. In other cases, however, this isn’t
always the case, which can have highly adverse psychological effects on children and
adolescents. A lack of entrepreneurialism and innovation in these companies may
result from being an SME trainer, but simply being a wage earner when you’ve never
been a business owner. No matter what, being an entrepreneur is not the same as being
an inventor. They would probably make better decisions and be more successful at
starting a business by adhering to this idea. Even though less attractive.
Limitations and Scope for Future Studies
The innovation process, which includes processes like idea generation, concept devel-
opment, and idea execution, is the effect an organization’s operational process has on
its capacity for innovation. The employees of an organization majorly implement this
innovation process. When given autonomy and power, employees are seen to operate
more creatively because they are allowed to invent in their own workplace. However,
this is viewed as a significant limiting factor in an organization because the level of
freedom will have a significant impact on the person and they may require support
rather than individual independence and loneliness. In comparison to a small firm,
there is little to no monitoring and observation of every individual in a huge orga-
nization. Large firms are able to give their employees freedom and personal space
because they have the resources and ability to take risks, but this is not achievable in
Innovation and Creativity an Important Ingredient in the Future Growth … 355

small organizations. Smaller businesses strive to reduce costs as much as they can,
therefore occasionally offer support and assistance. Therefore, it is the management
style’s guidance, support and leadership to ensure that the operational process is
fruitful and whether the employees are integrating the innovation process. Proper
implementation of a good guidance system will help prevent such a factor limiting
the resourcefulness or innovative ability of an organization besides, organizational
structure and organizational culture. An organization’s degree of functionality and
formality mainly depends on its structure. The structure in either way affects the
processes’ working, thinking and channels. The type as well as the nature of the
work are frequently dictated by the organizational structure. It has been observed
that an employee working alone can only make a little contribution to an organiza-
tion’s innovation process, whereas an employee team may gather and manage the
organization’s whole innovation process. The concept of organizational structure,
when discussed in relation to innovation, refers to the components of the structure
that influence or modify the level of innovativeness within an organization. It goes
beyond the simple arrangement of company departments. The effectiveness of these
teams largely depends on the organization’s culture and management style, which can
potentially restrict the organization’s ability to innovate. The organizational culture
represents the way in which it affects a company’s inclination and capacity to inno-
vate and create. Consequently, in larger organizations, the structure and culture are
designed to facilitate activities and projects carried out by large groups and teams.
Due to the abundance of resources, larger organizations divide their employees into
different groups, whereas smaller organizations typically have one team working on a
single project at a time due to limited resources and staff. In contrast, larger organiza-
tions undertake multiple activities simultaneously, with teams constantly managing,
discussing, and regulating these activities. To overcome this limitation, organiza-
tions can foster a culture of collaboration and teamwork to prevent a slowdown in
the innovation process.
Additional issues with technology and knowledge management It is well recog-
nized that technology indirectly has a significant impact on employees through
knowledge management. ICT is viewed as the general mechanism of information
transfer. Technology aids in the collection of knowledge and the creation of a reposi-
tory, allowing or preventing employees from accessing it. The ability to use these tools
or resources is what encourages or inhibits innovation. Lack of appropriate technical
tools, a lack of experience, etc. all negatively impact the innovation process. Small
and medium-sized businesses have limited resources and try to make the most of what
they have, whereas large organizations have ample IT assistance and produce vast
amounts of knowledge and resources. The technology resources in larger organiza-
tions. Resources like virtual reality, artificial intelligence, and group work software
have a significant impact on an organization’s capacity for innovation. Therefore,
having the technology available, managing it properly, and having the knowledge
of it all assist prevent any delays in the creation process. Environmental barriers
are similar. The external and internal environments are crucial barriers in any kind
of organization. Because negativity and unpleasant interactions will sap managers’
356 S. Darwish et al.

energy and the organization’s interaction, preventing it from concentrating on inno-

vative ideas, the good communications and feedback from an organization’s external
environment helps with the innovation process.
Additionally, there are roadblocks that prevent innovation, such as governmental
structures, laws, and suppliers. Similar to small and medium sized organizations,
huge organizations are far more affected by external influences. Large organizations
have a lot of regulations and restrictions that must always be followed, which slows
down the innovation process. Large organizations are so preoccupied with adhering to
external requirements that they are unable to concentrate inwardly on the unimportant
flashes of originality and innovation. In smaller organizations, there is ample space for
creative thinking, whereas in large organizations like Apple, they have established
coordinated systems and resources due to their significant revenue and employee
support. This enables them to have the freedom to pursue creativity and innovative
ideas. Therefore, it is crucial for organizations to create an integrated structure that
ensures the creative process is not hindered by the organization’s size and scale.

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The Mediating Effect
of the Organizational Commitment
on the Association Between Employees’
Empowerment and the Quality
of Municipal Services in Jordan

Mohammad M. Taamneh, Reema Matarneh, and Manaf Al-Okaily

Abstract This study investigates the impact of employee empowerment on the

quality of municipal services by testing the effect of organizational commitment
as a possible mediator variable. A questionnaire was used to collect data from the
study sample, which consisted of 304 employees who occupy managerial and super-
visory positions in great municipalities in Jordan. The study revealed a positive,
statistically significant effect of empowering employees to raise the quality of munic-
ipal services. According to the study’s findings, decision-making participation had
the highest impact on service quality improvement, followed by training, motiva-
tion, and teamwork quality; delegation came in last. Moreover, results indicated that
organizational commitment partially mediates the relationship between employee
empowerment and the quality of municipal services.

Keywords Empowerment · Service quality · Mediation analysis · Organizational

commitment · Municipalities

1 Introduction

In modern organizations, a focus on human resources is one of the most successful

organizational initiatives. Because of the critical nature of this aspect, it acts as
the cornerstone of all public and private organizations. These organizations place a
premium on developing and educating human resources, developing their compe-
tencies, providing adequate authority, involving people in decision-making, and
fostering trust between employees and management. This is intended to promote
organizational efficiency and effectiveness, as well as individual and institutional
performance, which will eventually improve the quality of services offered to

M. M. Taamneh · R. Matarneh · M. Al-Okaily (B)

School of Business, Jadara University 733, Irbid, Jordan
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 359
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_27
360 M. M. Taamneh et al.

customers. Numerous studies have shown decisively that empowerment promotes

the most effective use of human resources and high performance, strengthens the
value and meaning of work for employees, increases employee motivation, and
enhances employees’ feeling of responsibility. Perhaps the most significant advan-
tages of embracing the idea and practice of empowerment are an increase in produc-
tivity, a decrease in turnover, an increase in the quality of goods and services, and a
competitive advantage [1, 2].
Municipalities have been entrusted with additional responsibilities and powers
that formerly mainly belonged to the central government, and they have developed
into a pillar of economic, social, and political growth in several countries. However,
several studies undertaken in the local government context indicated a significant
deficiency in the quality of municipal services in Jordan across a range of sectors,
including health, hygiene, roads, parks, and urban planning [3]. These factors led
to people’s discontent and disappointment, which may have contributed to their
reluctance to support those localities [4, 5].
Organizational commitment has gained considerable attention in psychology and
human resource management, intending to reach high performance through employee
commitment [6]. Organizational commitment instills a strong feeling of responsi-
bility for the business and motivates employees to continue engaged, increase produc-
tivity, and demonstrate service-oriented behaviors and organizational commitment
and the quality of municipal services. However, if such studies are limited to the
public sector, they are almost non-existent in municipalities. Many municipalities
tend to approach empowerment with caution and mistrust, believing that it will
deprive the administration of its authority and ability to manage, owing to a lack of
awareness of the significant contribution of empowerment in improving performance
and service quality [7–9]. As a result, this study attempts to fill this void by shedding
light on the impact of empowerment on the quality of municipal services by prop-
erly understanding the model of the Relationship between the empowerment and the
quality of municipal services in the context of an organization commitment as an
intermediating variable. This paper complements the efforts of the Royal Committee
to Modernize the Political System, which concluded its work in late October 2021,
and strengthens recommended legislation linked to the development of local govern-
ment, including municipalities [10–12]. This research contributes theoretically and
practically to elucidating the notion of empowerment and its benefits; moreover, it
assists the decision maker in executing the study’s recommendations. The study’s
primary goal is to identify the effect of employee empowerment on the quality of
municipal services and the effect of perceived organizational commitment on the
Relationship between empowerment and service quality [2–14]. Numerous Western
scholars have highlighted staff empowerment as a primary strategy for administrative
reform and development. Arab studies are rather restricted in this regard since they
do not analyze the Relationship between empowerment and its impact.
The Mediating Effect of the Organizational Commitment … 361

2 Literature Review and Hypotheses Development

2.1 Employees’ Empowerment and Quality of Municipal

Services

Scholars have defined the term "employee empowerment" in a variety of ways.

Majority of them agree that empowerment entails delegating specific task-related
behaviors to employees. Employee empowerment is concerned with establishing
trust, motivating employees, and involving them in decision-making [10]. According
to [11], empowerment focuses on establishing trust, motivation, and decision-making
participation. Empowerment is a new organizational method and set of skills aimed
at enabling individuals to carry out corporate operations independently and without
direct management interference [12]. Additionally, empowerment means equipping
employees with the tools and work environment thinking. Rather than that, it frees
the individual from overbearing control and restrictive instructions and develops trust
between necessary for professional and efficient performance [15]. Empowerment
is a fluid strategy that is not predicated on rigid rules that stifle innovation and
independent the employee and top management [2–15]. Among the most widely
accepted definitions of empowerment is that it is a collection of factors and conditions
that enable employees to be given increased authority to make decisions and share
authority with senior management by fostering mutual trust between them, thereby
improving organizational performance [2]. Numerous scholars have demonstrated
that a properly employed empowerment idea helps to an organization’s effectiveness
in accomplishing its vision and objectives [14]. Additionally, empowerment boosts
employees’ understanding of their organizations’ goals and demands, as well as their
feeling of self-control to do their jobs to the utmost [15].
Tamneh et al. [17] stressed the empowered individual’s self-efficacy and internal
drive for effectively and skillfully performing duties without management scrutiny.
Furthermore, the empowered person is totally confident in his or her competence and
believes in his or her ability to innovate and perform well on his or her own [18].
There are numerous perspectives on the dimensions of empowerment, depending on
the researcher’s perspective on the concept, but this study chose a set of dimensions
that encompassed the primary aspects of employee empowerment, as represented by
delegation of authority, training, employee motivation, work teams, and participation
in decision-making [5–22]. Aws et al. [21] defined service quality as a measure
of how well the service level delivered matches customer expectations. Taamneh
Mohammad et al. [2] indicated that hospitals can improve customer satisfaction and
loyalty through efficient operations, employee engagement, and service quality. Al-
Okaily et al. [22] indicated that service quality is customers decision based on their
realistic experience with the product/service, measured by customer requests.
362 M. M. Taamneh et al.

The term “service quality” refers to the extent to which the level of service
delivered matches consumer expectations [23]. Lee [2] assert that firms may boost
customer satisfaction and loyalty by concentrating on operational effectiveness,
employee engagement, and service quality. According to [22], the quality of service
is decided by the customer’s actual experience with the product/service, as measured
by client needs.
Municipalities offer critical services, the majority of which cannot be delayed,
which necessitates the availability of authority. However, there is no unanimity on the
characteristics and antecedents of citizen-perceived service quality. As a result, there
is no agreement on the optimal method for determining and measuring service quality
[24, 18]. Parasuraman et al. devised a SERVQUAL technique for determining service
quality satisfaction and authorization for personnel to provide these services in a
timely way. Additionally, municipal services must be of high quality, consistent with
residents’ expectations and the promises made by mayors and elected officials alike
[25, 26]. The quality of services in local government sector has been the subject of
numerous studies because this matter is important for the sustainability of municipal
sector.
SERVQUAL is a concept that is based on an investigation of the gap
between customer expectations and perceived service quality. According to various
academics, there were five aspects of service quality: (1) Tangibles: quality of mate-
rials, equipment, and personnel appearance; (2) Reliability: capacity to provide the
expected service consistently and precisely; (3) Responsiveness: desire to assist
clients and give timely service. (4) Assurance: Employees’ knowledge and civility,
as well as their capacity to inspire trust and confidence; and (5) empathy: The firm’s
caring, customized attention to its customers [24–26, 28]. Numerous scholars have
claimed that one of the most critical aspects affecting job performance and service
quality is employees’ ability and willingness to work. As a result, organizations strive
to boost performance by creating an adequate work environment and empowering
their staff, ensuring that they deliver high-quality services [29, 30, 32–35].
Numerous applied research has examined the link between empowerment and
service quality. The study revealed a statistically significant correlation between
employee empowerment and municipal service quality. [36, 37]. Likewise, [38] high-
lighted the need of delegating, motivating, and training staff to improve the quality
of municipal services. In this regard, a study conducted by [39] on a sample of three
municipalities in the Emirate of Abu Dhabi revealed that employee engagement in
decision-making has a beneficial influence on the quality of municipal services. To
ascertain the influence of empowerment strategies on the quality of services in the
insurance industry, [1] performed research on the effect of empowerment on the
quality of services in insurance businesses, which found that empowerment plays
a beneficial role in service quality. Al-Okaily et al. [30] stressed the critical nature
of developing and disseminating a quality culture to enhance the quality of bank’s
services. The study revealed that administrative empowerment has an influence on
the bank’s service quality. Based on the above we propose the following hypothesis:
The Mediating Effect of the Organizational Commitment … 363

H1: Employee empowerment positively affects the quality of municipal services.

The following sub-hypotheses may be developed for this main hypothesis based on
the empowerment components outlined above:
H1.1. Authority delegation positively affects the quality of municipal services.
H1.2. Training positively affects the quality of municipal services.
H1.3. Participation in decision-making positively affects the quality of municipal
services.
H1.4. Motivation positively affects the quality of municipal services.
H1.5. Teamwork positively affects the quality of municipal services.

2.2 Mediation Role of Organizational Commitment

O’Reilly defined organizational commitment in [37] as a person’s psychological

connection to his organization, which reflects the extent to which people absorb or
accept the organization’s features or ideas. Employee empowerment is crucial for
firms seeking to increase earnings, improve customer service, and maintain labor
stability [40]. Many scholars agree that there are three major types of commitment:
(1) effectiveness commitment, which occurs when an employee desires to be a part
of the organization and that desire emerges from inside the employee; (2) contin-
uation commitment, which occurs when employees feel a need to be a part of the
organization; and (3) normative commitment, which occurs when employees under-
stand that organization members should be part of the organization [37]. Within this
conceptual framework and according to [37], there are three characteristics that have
a significant impact on determining an individual’s organizational commitment: a
strong belief in accepting goals, a willingness to put forth the maximum effort for
the benefit of the organization, and a desire to stay in the organization.
According to [6], organizational commitment has received considerable interest
in the fields of psychology and human resource management. They claimed that
to attain high performance, an employee’s commitment, loyalty, and conviction to
the organization’s values must be shown, which favorably effects his work perfor-
mance. In terms of the importance of organizational commitment, several scholars
have indicated that it inspires a strong feeling of duty in the person, which results in
increased performance and satisfaction. Additional advantages of employee commit-
ment include higher productivity and demonstrating service-oriented behaviors that
contribute to service quality [9]. Organizational commitment in all three dimen-
sions (emotional, continuous, and normative) has been shown to have a negative
effect on the intention to leave work and to play a significant role in reducing
negative phenomena, increasing motivation for achievement, and maintaining high-
quality services for organizations [6]. Bany Mohammed et al. [41] research in the
364 M. M. Taamneh et al.

banking sector shown a clear and significant influence of organizational commit-

ment on increasing the quality of banking service in Jordanian commercial banks.
Numerous research have proven a favorable correlation between the affective element
of commitment and the quality of service [32, 33, 42–44, 46]. In contrast to previous
research, Brown et al. [6], discovered that affective commitment had no discernible
influence on service quality. Although committed employees are believed to work
harder for a firm than those who are not committed [45], research has yielded mixed
results with regard to the Relationship between organizational commitment and
performance. Some researchers have established a positive relationship between the
two [24, 44], some see no relationship at all [5], while some have surprisingly even
established a negative relationship [6]. There are hardly any studies in the literature
which investigate the Relationship of the continuance and normative commitment of
employees with service quality.
Indeed, numerous studies have discovered positive associations between orga-
nizational commitment and employee behaviors such as increased effort expended
on tasks, increased employee retention, improved work attendance, increased desire
to engage in organizational citizenship behaviour, and improved service delivery
quality [42]. After conducting a review of the administrative literature pertinent to
this study’s topic, the researchers discovered a dearth of research in the munic-
ipal sector. However, the administrative logic surrounding the role of organizational
commitment as a mediator between empowerment and service quality variables led
the researchers to confidently develop the following hypothesis:
H2: Organizational commitment mediates the effect of employee empowerment on
municipal service quality.

3 Methodology

The proposed hypotheses were tested quantitatively. This technique enables statis-
tical validation of the conceptual model and its variables. A ques-
tionnaire was developed to elicit data from respondents and ascer-
tain their impressions of real employee empowerment, service quality, and orga-
nizational commitment in Jordan’s major municipalities. Four compo-
nents comprised the questionnaire. The first segment discussed demographic char-
acteristics such as gender, age, educational achievement, tenure, and job title. The
second section covered the respondent’s perceptions of employee empowerment
in five dimensions (five items each), making a total of 25 items, all of which were
adopted from various studies in this field [5, 18, 26, 43]. The third section covered
the service quality delivered by major municipalities in Jordan measured according
to their five dimensions: tangibility (4 items), reliability (5 items), responsiveness
(4 items), assurance (4 items), & empathy (4 items). The fourth section covered
organizational commitment, measured according to three dimensions: normative,
continuous, and affective with a total of 12 items (4 items for each dimension), all
of which were adopted from study conducted by [44].
The Mediating Effect of the Organizational Commitment … 365

The research population is made up entirely of personnel in Jordan’s main munic-

ipalities who occupy leadership and supervisory posi-
tions such as (director, deputy/assistant director, department head, divi-
sion head, and head of office) in Irbid, Mafraq, Ajloun, and Jerash.
This set of employees was chosen because they are the most qualified to eval-
uate the availability of research variables in municipalities. Therefore, the study popu-
lation, which also serves as the research sample, is anticipated to be about 555 indi-
viduals. According to [45], the optimum sample size for this population is 300 respon-
dents, or 55% of the population. However, our sample included 555 people, all of
whom are directors, deputy directors, or department heads. We chose a convenience
sample of participants based on their accessibility and availability. 555 question-
naires were circulated; 330 questionnaires were retrieved; and after removing invalid
questions, a total of 304 questionnaires were available for further assessment.
The data was examined, formatted, and arranged using SPSS software. Demo-
graphic variables have been subjected to frequency testing. The standard deviation
and mean for all items were determined using descriptive statistics. The Cronbach’s
coefficient alpha was utilized to determine the tool’s internal consistency’s stability.
Additionally, the AMOS software was utilized to investigate the structural equation
models. Additionally, this tool was utilized to do proper statistical analyses to answer
questions and test hypotheses. While simple regression analysis was used to test the
first main hypothesis and its five branches, path analysis utilizing the AMOS program
was used to test the second main hypothesis.
The descriptive statistics for the demographic factors are shown in Table 1.
According to the table, over 78% of our participants were male, and 39% have a
bachelor’s degree. Additionally, the table indicates that 62.1% of participants are
under the age of 39, indicating that most respondents would be classified as young
professionals. Additionally, about 65.2% of participants had less than fifteen years
of experience, while participants with more than fifteen years of professional expe-
rience account for just 34.9% of the sample. Finally, the table indicates that almost
half (52.3%) of respondents hold the post of head of department.
The mean and standard deviation are shown in Table 2 as descriptive statistics for
the underlying variables. The correlation matrix is shown in the Table 3. According to
Table 2, participants stated that their organizations perform well in terms of employee
empowerment and achieve high levels of service quality across the board.

4 Results and Discussion

To assess the validity of the first hypothesis, we performed regression analysis to

determine the effect of employee empowerment on the quality of municipal services.
The following table summarizes the outcome.
As shown in Table 4, the regression coefficient is 0.862, which is statistically
significant because it is less than (0.5); this indicates that the employee empowerment
variable can account for a 74.2% change in the quality of municipal services, and
366 M. M. Taamneh et al.

Table 1 The demographical descriptive statistics, (Note N = 403)

Variable name Category Frequency Percent
Gender Male 237 78.0
Female 67 22.0
Age Less than 30 years 84 27.6
30-less than 40 years 105 34.5
40-less than 50 years 115 37.8
Education Diploma 42 13.8
Bachelor’s 119 39.1
Graduate 143 47.0
No. of years of services Less than 5 years 28 9.2
5-less than 10 years 75 24.7
10-less than15 years 95 31.3
15 years and above 106 34.9
Job title Director 43 14.2
Deputy Director 43 14.2
Head of Department 218 71.6

Table 2 The descriptive statistics of the underlining variables

Grade rank Dimension Mean SD Evaluation degree
1 Delegation 4.33 0.598 High
2 Teamwork 4.22 0.693 High
3 Participation 4.20 0.826 High
4 Training 4.10 0.845 High
5 Motivation 4.05 0.956 High
Employees’ empowerment 4.18 0.695 High
1 Empathy 4.30 0.665 High
2 Tangibility 4.29 0.718 High
3 Assurance 4.20 0.756 High
4 Reliability 4.19 0.694 High
5 Responsiveness 4.18 0.763 High
Overall service quality 4.23 0.656 High

the correlation coefficient is 0.862, indicating that there is a positive relationship

between employee empowerment and municipal service quality. As a result, the
initial principal hypothesis was accepted and verified. This finding is consistent with
the findings of [39, 32]which suggested that service quality is dependent on employee
empowerment, as empowered employees can provide higher-quality services. It is
worth noting that the employee who is empowered by his or her organization improves
Table 3 The correlation matrix
Variables 1 2 3 4 5 6 7 8 9 10
Delegation (1) 1
Teamwork (2) 0.825** 1
Training (3) 0.749** 0.909** 1
Motivation (4) 0.700** 0.894** 0.907** 1
Participation (5) 0.784** 0.885** 0.86** 0.991** 1
Tangibility (6) 0.703** 0.780** 0.731** 0.810** 0.635** 1
Reliability (7) 0.689** 0.638** 0.640** 0.722** 0.627** 0.650** 1
The Mediating Effect of the Organizational Commitment …

Responsiveness (8) 0.677** 0.640** 0.630** 0.618** 0.713** 0.633** 0.710** 1

Assurance (9) 0.650** 0.630** 0.611** 0.623** 0.610** 0.605** 0.722** 0.712** 1
Empathy (10) 0.655** 0.640** 0.612** 0.590** 0.622** 0.619** 0.690** 0.615** 0.619** 1
367
368 M. M. Taamneh et al.

Table 4 Regression analysis of the impact of dimensions of employees’ empowerment on service

quality
Variable R R2 Non-standard parameter T value F value Sig.
B Standard error
Empowerment 0.0862 0.0742 0.0813 0.028 29.499 870.196 0.000

Table 5 Impact of empowerment dimensions on the quality of municipal services based on

regression analysis
Empowerment of R R2 Non-standard T value F value Sig.
variable parameter
B Standard
error
Delegation 0.619 0.384 0.680 0.050 13.708 187.913 0.000
Training 0.808 0.653 0.627 0.026 23.842 568.429 0.000
Participation in 0.814 0.663 0.647 0.027 24.376 594.197 0.000
Decision making
Motivation 0.794 0.630 0.544 0.024 22.675 514.159 0.000
Teamwork 0.737 0.543 0.698 0.037 18.956 359.345 0.000

his or her ability to carry out his or her obligations and tasks effectively in terms of
size, accuracy, speed, and quality.
The study examined each dimension of employee empowerment in depth to deter-
mine its impact on the quality of municipal services and to determine which dimen-
sion was most relevant. As shown in Table 5, the study discovered a favorable effect
of employee empowerment on service quality across all dimensions, which corre-
sponded to the findings of another study [39]. According to the study’s findings,
decision-making participation had the highest impact on service quality improve-
ment, followed by training, motivation, and teamwork quality; delegation came in
last.
To test the second hypothesis, “Organizational commitment mediates the relation-
ship between employee empowerment and municipal service quality,” path analysis
in conjunction with AMOS software was utilized, as shown in Table 6 and Fig. 1.
According to Table 6, the computed value of Chi2 is (0.000), which is statisti-
cally significant at the (a0.01) level. The Goodness of Fit Index (GFI) obtained a

Table 6 The results of the path analysis of organizational commitment as a mediator variable
between empowerment and quality of service
Chi2 GFI CFI Sig. Direct effects Indirect effects Path T Sig.
0.000 1.000 1.000 0.000 EE-EC 0.827 0.856 First 25.610 0.000
EE-SQ 0.477 Second 29.499 0.000
EC-SQ 0.464 Third 29.201 0.000
The Mediating Effect of the Organizational Commitment … 369

Fig. 1 Path analysis of organizational commitment as a mediating variable

value of (1.000), indicating a degree of complete fit; also, the comparative Fit index
reached a value of (1.000). Additionally, the table demonstrates that when organiza-
tional commitment is included as a moderating variable in the Relationship between
employee empowerment and municipal service quality, the direct impact of service
quality (first path) is increased to 0.827 while remaining statistically significant at
the level (a < 0.01). Employee empowerment had a direct influence on the quality
of municipal services (second path) of 0.477, which is statistically significant. The
direct effect of organizational commitment on the quality of municipal service (third
path) was 0.464, which is statistically significant. Thus, the conditions required for a
mediating effect have been met [33, 34]. As a result of the foregoing, it can be inferred
that organizational commitment has a statistically significant effect as a mediating
variable in the link between employee empowerment and municipal service quality
by partial mediation. As a result, the hypothesis that organizational commitment
mediates the association between empowerment and municipal service quality may
be accepted.

5 Research Implications

Municipalities are essential to attain a range of administrative, political, economic,

social, and development goals, which can only be done with human resources
equipped with the necessary knowledge, skills, and authority [42]. Based on the
findings of this study, which indicate that employee empowerment improves the
370 M. M. Taamneh et al.

quality of municipal services, it is recommended to municipal administrations and

decision makers in all local government units in Jordan to continue empowering
their employees through delegation and training, as well as providing opportuni-
ties for participation in decision-making. In this regard, it is recommended that the
Ministry of Local Administration establish a training institute dedicated to the educa-
tion and development of local government employees. Researchers believe that poli-
cymakers should seek to improve the salaries and wages of municipal employees
and to make them comparable to those of their peers in other public sector orga-
nizations to sustain municipal employees’ organizational commitment. While it is
true that the study’s findings indicated a high level of organizational commitment
on the part of employees, we must keep in mind that the study’s sample included
individuals in leadership positions and those earning relatively high incomes. The
study advises that individuals in leadership and supervisory roles look out for their
subordinates and address their needs and aspirations through the use of incentive,
encouragement, and delegation techniques. The researchers argue that by developing
the meanings of role models and excellent morals, municipal mayors create an oppor-
tunity for employees to emulate them. This approach is the most effective method
for changing and transforming employees’ attitudes about job quality, productivity,
and a sustained commitment to high performance.

6 Limitations and Future Research

In general, this study will contribute to the existing of knowledge by proposing and
constructing a framework for the Relationship between employee empowerment and
municipal service quality. Additionally, this framework contributes to a theoretical
understanding of the role and impact of organizational commitment in the relation-
ship between employee empowerment and municipal service quality. According to
this cognitive framework, researchers will get an understanding of the concepts and
components of the study variables, which will aid them in developing additional vari-
ables or applying them to a different context. The current study demonstrated that
employee empowerment has a beneficial effect on municipal service quality; addi-
tionally, the mediating variable is critical in explaining the Relationship between
employee empowerment and municipal service quality. No research is without limi-
tations. The study, however, is limited to First category (Great) municipalities. As
such, researchers are invited to duplicate the study on Jordan’s second and third tier
municipalities to make the findings more generalizable. The researchers recommend
that future research use other mediating variables such as level of satisfaction or job
affiliation.
The researcher neglected to specify the demographic features of the sample of
studies, knowing that they are important variables for this study. The paper examined
the level of job satisfaction for males and females (gender effect) of faculty members.
The result of the study showed that there are no differences between males and
The Mediating Effect of the Organizational Commitment … 371

females. However, the small size of the study population and its sample makes the
issue of generalizing gender discrimination difficult. The researcher used simple
statistical tools, but they are suitable for the study.

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The Importance and Trends of Digital
Economy During COVID 19 Crisis: UAE
Case

Myriam Aloulou

Abstract The digital economy is a key driver of economic development that has
profoundly altered the public’s way of life. Technology has played an important
role in our well-being, and it is likely to present more opportunities in the future,
particularly during the COVID-19 pandemic. As the “Internet of Things,” artificial
intelligence (AI), virtual reality, blockchain, self-driving cars, and other technologies
advance, the digital economy will become more important. It offers some advantages
like information through reviews, forums that help making decision about goods and
services, security through online payment and global presence since the product or
service is available anytime and anywhere. The goal of this study is to showcase the
importance, challenges and trends of digital economy and its impact on the economic
development and employment during Covid19 crisis in the UAE. The study also
explores how innovations can improve people’s quality of life around the globe and
how technology and digitalization can be used to create prosperous smart economies
in the post-pandemic period.

Keywords Digital economy · Covid 19 · Technology · Economic growth

1 Introduction

The digital economy incorporates the economic value generated by modern digital
technology [1]. Kirton, identifies the new information and communication tech-
nology (ICT) as the primary driver of economic structure optimization [2]. In addi-
tion to signaling the beginning of the fourth industrial revolution, the digital economy
will be the primary driver of future national development [3, 4].
Digital information technology, such as the Internet, cloud computing, big data,
block-chain, and artificial intelligence, was the driver for the digital economy. For
example, the rise of mobile Internet allowed people all over the world to buy and

M. Aloulou (B)
Liwa College, Abu Dhabi, United Arab Emirates
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 375
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_28
376 M. Aloulou

provide at the same time goods and services, promoting social [5]. Today’s key
sources and stores of value are information, data, and technology. With one of the
highest FTTH (fibre to the house) penetration rates in the world (95.7% of homes), the
UAE has already laid the groundwork for the digital economy. In terms of launching
and constructing 5G networks, the UAE came in first among Arab nations and third
overall, according to “The Connectivity Index” [6].
To digitally revolutionize vertical industries, boost efficiency, and create new
opportunities, the UAE has embraced 5G. The original 5G-powered applications
have been brought to regional sectors, new 5G ecosystems have been established
[7]. Furthermore, during the COVID-19 pandemic (from 2020 till 2022), the digital
economy was very beneficial: The Internet has enabled home-confined employees
to work from home and students were able to attend classes though online educa-
tion platforms. QR codes and big data have enabled governments to determine the
itineraries of infected people [8].
Pradhan et al., 2019; stated that the digital economy has also delivered the begin-
ning of the fourth industrial revolution 4.0 and become the main future development
path of countries in the world [9].
The UAE Digital Economy Strategy announced in April 2022 that the country
aims to double the contribution of the digital economy to its GDP from 9.7 to 19.4%
within the next decade.
The UAE leads the rest of the globe in the digital economy thanks to its forward-
thinking planning and policies. Additionally, it offers creative business solutions that
have been successfully implemented and are fruitful results of these tactics. These
businesses offer a solution for our post-pandemic environment since they are durable
and long-lasting.

2 Impact of Digital Economy on Employment

Contemporary organizations are seeking competent employees who possess excep-

tional technical training and can adjust to dynamic circumstances [10]. The European
Commission and the Organization for Economic Co-operation and Development
have highlighted the crucial importance of developing the right skills to get the most
benefit from digital economy [11]. Companies must develop employees’ direction
and staff to cope with technological revolution [12]. Also, several reports show how
getting the right digital skills can lead to job opportunities, how workers can prepare
for the digital transformation by doing certain things to learn or improve their digital
skills [13, 14].
Through the development and deployment of digital technology, the workforce
became well-trained, more high-tech and manufacturing focused. Further studies
demonstrate that enhancing industrial structure and human capital stock has a positive
impact on the digital economy’s growth and the employment structure [15].
The Importance and Trends of Digital Economy During COVID 19 … 377

3 Why Digital Economy is Important?

During COVID 19 era from 2020 till 2022, Digital Technology has demonstrated its
strengths: it enabled mitigation of the economic impact by enabling firms to interact
with customers digitally, ensured the continuity of the operations using remote
working arrangements, and resolved logistical obstacles brought on by disruptions
occurred to global supply chains. In the post-pandemic period, digital technology
will continue to play a crucial role in enhancing the competitiveness and resilience
of enterprises around the world. Governments should provide regulatory, financial,
and advising support for firms, particularly MSMEs (micro, small, and medium-
sized enterprises) that still lack digital competence, to speed up the efforts related to
economy digitalization. This may entail assisting businesses with advice and grants
towards digitalization [16].

3.1 Economic Recovery from COVID-19 Depends on Digital

Transformation

During the time after the pandemic in UAE, digital technologies will continue playing
a key role in making businesses more competitive and resilient. To speed up digital
transformation, governments can offer more regulatory, financial, and consulting
help to companies, especially micro, small, and medium-sized businesses (MSMEs)
that don’t have digital skills. This can include giving digitalization grants and advice
to companies, as well as making it easier for people to get to high-speed Internet and
broadband infrastructure.

3.2 E-Commerce Will Increase MSMEs’ Access

to International Markets

The pandemic has had a big effect on how people act and has led to more online
sales around the world. This is a big chance for MSMEs because they can now deal
internationally at much lower costs than they could before. But there are some things
that keep companies from using e-commerce. Most of the time, regulations and costs
stand in the way of MSMEs.
Some of these are high costs for moving goods across borders, strict buyer protec-
tion laws in foreign countries, and high customs duties on online foreign trades.
Governments can help MSMEs deal with these problems in several ways, such as by
giving grants for e-commerce and exports and giving training on foreign laws.
378 M. Aloulou

4 Challenges of Computing Digital Economy

Since the popularity of digital products and services rises and new digital inter-
mediary platforms emerge, the quality of many crucial economic indicators might
decrease if statistical organizations fail to address these challenges.
The first one is aggregate expenditure, which means people can buy videos, music,
fashion, and electronics online from anywhere in the world. This has major effects
on the Consumer Price Index, foreign trade, and household spending.
Second, people buy more and produce more. Most governments limited produc-
tion to real estate and agriculture. In the transportation services, food and lodging,
and cultural and entertainment industries, households are key producers (e.g., Uber
drivers, Airbnb hosts, and YouTubers). Household output growth affects economic
and labor market measurement.
Third, Amazon, Airbnb, eBay, and Uber have emerged from the digital economy.
These digital platforms provide financial services that must be classified and reported
in our national accounts and new business models are becoming prevalent and
dominating particularly the concept of “Industry 4.0” [17] (Fig. 1).
Fourth, the digital economy is forcing accountants to develop methodologies on
how to define and measure intellectual property. There are still doubt that most
companies today are capturing sales data, but the databases and the investment made
in generating these Sales are not being adequately captured.
Fifth, the digital economy is altering the payment methods for goods and services
since it brings changes in money. The emergence and growth of cryptocurrencies,

Fig. 1 Industry 4.0 framework and contributing digital technologies [18]

The Importance and Trends of Digital Economy During COVID 19 … 379

stable coins, and Central Bank Digital Currencies (CBDC) raise numerous regulatory
and security concerns and will result in a major transformation of financial industry.
As the economy digitalizes, additional information from the households and
digital intermediary platforms (such e-commerce platforms) will need to be consid-
ered building reliable economic data to be used in the statistical system.

5 Major Trends in the Digital Economy

5.1 The Importance of Internet in Times of Crisis

Connectivity plays a crucial role. Many citizens must attempt to sustain productivity
while engaging in social isolation during the COVID-19 health emergency. Due
to teleworking and confinement measures, demand for broadband communication
services has increased.
The UAE already has the best foundation for the digital economy success: It has
one of the world’s deepest FTTH (fiber to the home) penetration rates, reaching
95.7% of homes across the UAE. Between November 2021 and November 2022, the
internet exchange point production remains constant at 2 in UAE and the domestic
bandwidth production increases by 13% from 251 to 284 G (Fig. 2).

Fig. 2 Ranking by size of some of the largest IXPs (excluding those in North America) [19]. Note
This chart excludes IXPs from the USA, and only shows those exchanges which publish traffic data
on their website
380 M. Aloulou

Fig. 3 % who use the internet [22]

5.2 Gaps in Technology and Internet Usage Remain

Even if Internet coverage is reaching saturation in some countries, gaps persist both
between countries and between different groups/regions within countries. there are
still discrepancies between men and women, people with different levels of income,
people of different ages, people of different educational attainment, and between
those living in rural or urban areas [20]. These gaps were especially noticeable during
times of crisis (COVID-19 pandemic), they affected how different groups were able to
continue to work or were able to maintain contact with the world outside their homes.
While younger generations are more likely to use the Internet, older generations still
have time to catch up [21].
Some Arab countries have seen internet penetration rates of 90% or more since
2013. The United Arab Emirates (UAE) has the highest rate of internet penetration
comparing to Egypt (53% points), Jordan (41% points), Lebanon (36% points), and
Tunisia (27% points) (Fig. 3).

5.3 Managing Increasing Digital Threats

The COVID-19 pandemic has expedited the worldwide transition towards digital
online economy. It increased the importance of safeguarding users’ data and digital
content against viruses, cyber-attacks, and fraud. Building users’ and merchants’
confidence in the safety and security of online spaces is essential to the success of this
The Importance and Trends of Digital Economy During COVID 19 … 381

transition. Although the regularity of cyber-attacks differs by country, the necessity

of keeping networks secure is growing everywhere. This is especially true during
times of crisis, when people’s access to the internet for work and communication is
vital to the survival of many industries.
The percentage of websites with critical flaws has decreased during the past five
years (Fig. 4).
The market for cyber security in the UAE is projected to expand rapidly over
the next few years. The rising prevalence of cyber risks in businesses is a key factor
boosting growth in the UAE cyber security industry. The market is predicting growth
because of the rising importance of securing sensitive information from viruses and
ransomware.
Moreover, innovations in technology, such as the next-generation security solu-
tions and the integrated security solutions, and the merge of new technologies such
the Artificial intelligence AI and the Internet of Things IoT.
According to Emirates news agency (WAM) report: The UAE moved in the 2020
Global Cybersecurity Index 33 places to fifth. This was mainly thanks to the increase

Fig. 4 Websites by vulnerability severity [23]

382 M. Aloulou

Fig. 5 UAE cyber security market size by region [24]

of awareness towards the importance of cyber security. This Index is published bey
the International Telecommunication Union (ITU) which is an internet and telecoms
agency belonging to the United Nations. It ranks 193 countries based on their commit-
ment towards cybersecurity. The performance of each single country is measured in
five categories: legal, technical, organizational, capacity building, and cooperation
(Fig. 5).

6 Indicators for Measuring Key Aspects of the Digital

Economy

The Digital Economy presented indicators organized into three “themes” that
addressed the most important parts of the Digital Economy: Empowering Society,
Infrastructure, Technology Adoption, and Innovation.

6.1 Infrastructure

This theme focuses on physical, service, and security infrastructure indicators that
support the Digital Economy. It examines mobile and fixed network access, the
growth of the next generation access (NGA) network, the dynamics of household as
well as business adoption, the infrastructure for the IoT (Internet of things) and the
secure server infrastructure. Infrastructure development is a key factor in how easy
The Importance and Trends of Digital Economy During COVID 19 … 383

it is for people and businesses to get access to and use technology. Because of this,
it needs to be carefully measured to create the best conditions for investing in both
real and intangible assets.

6.2 Empowering Society

In a relatively brief period, the use of digital technologies has improved the livelihoods
and well-being of people in addition to its economic impact. Digital technologies
allow more people than ever to access government services and encourage civic
participation [25].
Listed below are indicators that demonstrate how the Digital Economy is altering
the lives of people, their access to and use of digital technologies, and their capacity
to realize their maximum potential. It includes indicators on Internet usage, such as
online interactions with the government, as well as indicators on the gender disparity
in Digital Economy participation [26].

6.3 Innovation and Technology Adoption

The digital transformation has the potential to drive the economic growth and social
prosperity through enhanced productivity, broader access to markets, and more
diverse product offerings. As a result, keeping tabs on the spread of innovative and
potentially disruptive technology is a good idea [27]. Policymaking in related fields,
including skill development, benefits from this as well.

7 Conclusion

This paper discussed different parts of the digital economy, as well as how they have
changed over time. The digital economy revolves around the IT/ICT sector We distin-
guish broader deployment of digital technologies in existing businesses, viewing
them as part of the broader “digitalized economy” Measuring the digital economy is
complicated by poor data quality, indeterminate boundaries, pricing related issues,
and the invisibility of a substantial amount of digital activity. According to this defi-
nition, the digital economy accounts for about 3% of worldwide employment and
5% of global GDP. There is a large gap between countries in terms of the possibil-
ities, challenges, and best-practice interventions needed to fully achieve the digital
economy’s potential to bring about significant development outcomes.
Digital services provided by the UAE government have varying degrees of quality
between emirates and cities. However, there are three main opportunities for improve-
ment: designing services around user needs; developing open-data led services in
384 M. Aloulou

partnership with the private sector; and creating comprehensive “one-stop shop”
portals that incorporate all core services in a single site and app.
The diversification of the UAE economy and the nature of accessible jobs will be
profoundly affected by the proliferation of digital services, from e-commerce apps to
government portals. Employees with digital and CS skills will become increasingly
valuable. This would help the government increase efficiency and public satisfaction
while also allowing the private sector to sell digital services across the region. The
United Arab Emirates has the resources and political will to seize the opportunity
presented by the rise of the digital economy.

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Enhancing the Security of Sensitive Data
in Cloud Using Enhanced Cryptographic
Scheme
Roshan Kumar Gupta , Hemraj Shobharam Lamkuche ,
and Suneel Prasad

Abstract Cloud computing is powerful evolving on-demand computer system

resources technology, As the technologies are increasing day by day the problems
associated with them would also increase. Cloud security is one of the major concerns
in today. Cloud is useful for the storage of data and need not be managed by the direct
users or owner of the data. Data are not be saved in the physical device of the user
but in a third-party cloud storage. The major issue with cloud computing is the lack
of trust on the security. The purpose of study is to enhance and ensure the security
of sensitive data in cloud using enhanced encryption scheme. In this paper, cryp-
tography is proposed as a method of protecting sensitive data by various tools and
techniques. The cryptography algorithm used in the proposed methodology are AES,
SAL, Blowfish and CSL algorithms and a through a comparative analysis the most
effective and secured algorithm is suggested. In proposed methodology information
transmitted with confidentially, without any breach or any alteration in data, infor-
mation is transferred in secured way that only the authorized person is able to process
or receive the data.

Keywords Cloud computing · Encryption · Block cipher · Cyber security ·

Cryptography

R. K. Gupta (B)
Accenture, Pune, India
e-mail: [email protected]
H. S. Lamkuche
School of Computing Science and Engineering, VIT Bhopal University, Kothrikalan,
Sehore 466114, Madhya Pradesh, India
S. Prasad
Symbiosis Centre for Information Technology, Pune, Maharashtra, India
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 387
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_29
388 R. K. Gupta et al.

1 Introduction

Cloud Computing this word was first given by professor John McCarthy in 1961, at
that time the it was viewed just as a small thing like telephone. Later it was realized
that it was not just like a telephone system it is greater than that what people have
thought at that time. A huge transformation to business & IT, data storage, services
and its computing power can be used to provide third party uses and can be made
available to all the business and customers [1]. It is present at the core of all the
important technologies like Internet of Things (IoT), automation, Machine learning,
Big data, Mobile Internet. As the technologies are increasing day by day the problems
associated with them would also increase. Security is one of the major concerns in
today generation. There are advantages as well as disadvantages associated with the
use of Cloud. The Foremost concern with Cloud Computing is Privacy, where the
data is stored to another party it privacy is the major concern today [2, 3]. Let’s
assume for the moment that we have stuff in the cloud that someone could access.
Concerns include law enforcement’s easy access to data on organization servers. Data
can be stolen even if the supplier is protecting it. Second, hackers can steal your data
without your knowledge. They can simply sell our data to competitors and blackmail
victims into exchanging cryptocurrency to decrypt encrypted information. Finally,
bot attackers use botnets for DDOS attacks. DDOS blackmail is rising in some
nations. DDOS assaults are the biggest cloud safety risk. DDOS attacks overload
system resources with fake traffic. DDOS attacks block network traffic to end users.
DDOS attacks are hard to stop because attacker requests look like user requests [4].
Cryptography is the most powerful tool for securing information. This scheme
improves the information is transmitted with confidentially, without any breach or
any altered should happen. In this method the information is transferred in secured
way that only the authorized person is able to process or receive the data. Symmetric
key cryptography (also known as secret key cryptography) and asymmetric encryp-
tion are the two main types of cryptography [2, 5]. To encrypt and decode data, secret
key employs a single key. Two keys are used in symmetric encryption. Encryption
is performed using the first key, the public key, and decryption is performed using
the public key. In Symmetric, the key size and length are often lower, but in Asym-
metric, they are typically greater. Asymmetric deals with nontrivial mathematical
computations, modular arithmetic functions, and large numbers, whereas symmetric
deals with XOR, OR, NOT, and so on. Algorithms based on symmetric is 100 times
faster than asymmetric and also provide confidentiality and Integrity. So, based on
time complexity and space complexity we have different types of algorithm like
AES, RSA, Blowfish, CSL based on different parameter [5–8]. The RSA algorithm
is the based-on public-key cryptosystem. The Advanced Encryption Standard (AES)
is also a symmetric block cipher, government want to protect information so they use
different hardware and software. Blowfish is another symmetric block cipher with a
configurable length key starting at 32 bits and operates on 64 bits [5, 6].
Hybrid clouds are two or more clouds consisting of (private and public). They
typically remain distinctive organizations, but are joined together and provide the
Enhancing the Security of Sensitive Data in Cloud Using Enhanced … 389

value of several models of implementation. In Hybrid cloud, we can leverage bene-

fits of third-party cloud provider in either partially or fully manner. Hybrid cloud
increases the cloud computing flexibility. In this we can use public cloud along with
private cloud. When the demands of businesses fluctuate then the ability to seam-
lessly scale them on premises infrastructure to handle any overflow that do not allow
both third-party data centers have access to all their data [9]. For simple and non-
sensitive computational functions, companies achieve the simplicity and computing
ability of the public cloud. The data can be easily accessed from any point and from
place and can be deployed on it.

2 Literature Review

The authors proposed an RSA as the solution. In RSA algorithm the there are steps
of key generation, encryption and decryption. This is a secure communication as
the private keys are only known by the individuals but the public key is circulated.
The public key can only be decrypted by the private key of the same individual.
Hence only the intended receiver can decrypt the file, hence keeping the communi-
cation confidential. The drawbacks are also discussed as there are flaws in the RSA
encryption. The RSA algorithm has the drawback of having a fake public key which
can cause issues while decrypting the message. The generation of key can be very
complex and the security is not very high. If anyone who gets to know the private
key of the sender or the receiver can open message speed is also problem in the
RSA algorithm. The research paper outline limited control granted to the users over
their data builds an anxiety that it is not secure and it can be accessed and modified
by an external attacker [1]. To ensure the integrity of the data, the user can resort
to a Third-Party Auditor (TPA) for an auditing. But to keep the data confidential
for the TPA the paper proposes two encryption methods, MD5 and AES [10]. This
provides the benefit that the TPA can audit the data without knowing the contents of
the data and preserving data privacy. They can act as an intermediary between the
user and the cloud provider. The data can be stored in multiple cloud to increase the
availability. The proposed system is efficient in minimizing the time taken by AES
algorithm to encrypt the data and transferring it from the client to the CSP using
MD5 algorithm. The drawback of the system is the time taken to encrypt the file,
upload, key generation increases with the increase in the file size. The rate of false
positive and false negative is lower than the existing system but has the possibility of
raising a false alarm in modified and unmodified file. This paper used the concept of
multi-cloud for the purpose of security. This provides a web service level agreement
framework, SLA monitoring and enforcement in SOA [11–17].
Sensitive data and key applications demand more security. This study uses RSA
and Magic Square Algorithm to protect data-in-transit to and from cloud providers.
The suggested system encrypts data and only the owner has the key, ensuring data
secrecy. Encryption secures and preserves cloud data. RSA + magic square is secure.
Encryption and decryption speed up and secure file transmission. However, this
390 R. K. Gupta et al.

model requires a lot of memory for a tiny amount of data. This model just encrypts
text [15, 16]. The authors have a combined algorithm is used coma RSA encryption
algorithm is used for protecting the data from any breach by secured communication
and encryption and decryption and For digital signatures and to protect data from
unauthorized access, the MD5 algorithm is used [17–19]. The hybrid approach is
better than any other cypher method yet it lacks in throughput because when the data
increases the time taken for encryption also increases [5, 20].
The author suggested several cryptographic methods to improve cloud data secu-
rity and reliability, as well as comparisons of these methods depending on different
criteria. Cryptography algorithms encode text, audio, images, and videos to ensure
confidentiality, integrity, and availability [21, 22]. RSA, Digital Signature, Diffie
Hellman, AES, and DES cryptographic algorithms and authentication methods solve
cloud computing security challenges [5, 23]. To protect privacy, security, trust, and
government surveillance, there are important standards to follow. High-security
symmetric and asymmetric cryptography with key exchange is utilised [1, 24].
Kerberos authentication is used to protect data exchange and storage via trusted
third parties [24–26]. The TDES requires less space having three keys of 56 bits
and it is used effectively to safeguard data against various attacks. Analyzing these
cryptographic algorithms, it is concluded that TDES is strong and better technique
of encrypting personal data instead of acquiring larger space than DES [19–23]. A
new algorithm has been proposed to maintain security within the cloud by providing
integrity to the users’ identities and within this algorithm, RC5 and AES symmetric
algorithms have been applied together to enhance high level of security, complexity
of cipher text against the attackers and the speed of computing process. It also elim-
inates the problems found in the encryption process. This algorithm that found to be
the best among others by adding other encryption techniques, includes three stages:
Key expansion, Data encryption and Data decryption [27, 28]. The author proposed
SAL algorithm which uses 64-bit blocks with a 64-bit to 128-bit key size. SAL is
based on a small compact s-box embedded with composite filed arithmetic (CFA)
technology to decrease hardware consumption on field-programmable gate array
(FPGA) boards. It accepts 64-bit plaintext input as well as a 64-bit plaintext key size
[8, 26].

3 Proposed Methodology

Cryptography is a method of protecting sensitive data by various tools and tech-

niques. It provides confidentiality as a basic security service to keep sensitive infor-
mation hidden from unauthorized users and maintains privacy using various algo-
rithms which will be discussed later in the paper. Components of cryptosystem are
as follows.
Enhancing the Security of Sensitive Data in Cloud Using Enhanced … 391

1. Plain text: Initial mode of data to be secured during transmission and storage.
2. Cipher text: After encryption, cipher text is generated which is an unreadable
form of plaintext.
3. Encryption Algorithm: It is a mathematical process of converting plaintext to
cipher text.
4. Decryption Algorithm: The reverse operation of the encryption algorithm is
done, transforming cipher text to plaintext.
5. Secret Key: a secret shared between sender and receiver.
In the area of cloud protection, the Encryption Algorithm plays a significant role.
In the cloud world, several algorithms are available for use in protecting user data.
Hybrid Encryption Scheme is an approach for transmitting data securely over the
internet. This is done by encrypting the data into cipher text when the sender sends
some data and then it is decrypted back to plain text at the receiver’s end. The hybrid
encryption scheme consists of four phases.
First of all, initial original or plain text is converted into cipher text by mono alpha-
betic substitution. In this method to produce cipher text using encryption methods
like Caesar Cipher, each time a plaintext symbol appears, it is replaced by a cipher
text symbol. For such a cipher, the key is a correspondence table or a feature from
which the correspondence is determined. It used set replacement over the message
as a whole.
In the second phase, transposition is used for conversion into cipher text. It takes
the converted cipher text in the previous step and reverses the order of the letters or
shifted according to a standard scheme, such that the text of the cipher represents
a plain text permutation. can be keyless as well as keyed. The third phase of the
scheme is focused on compression of data. This is done by breaking down the text
into blocks of two characters and then each block is encoded with a single character
through computation. In the fourth phase, the character encoded is then replaced by
a value using mathematical encryption functions and its ASCII Value (Fig. 1).
The proposed algorithm is a one-of-a-kind Feistel structure that combines the
F and H functions to form the Round Function. It enables to make cryptographic
implementation easier. The structure basically takes Plain Text as the input. The
input is broken down into blocks of 64 bit and then it splits into 32 bits each. Further
14 rounds are performed on the 32bit block to be converted into 64-bit cipher text.
The Feistel structure of the algorithm consists of matrices of substitution boxes and
for each cycle of the Feistel network, there are 18 32-bit P-arrays utilized for key
expansion. The Key is used as an input to the F function, and the output of the F
function is used as an input to the H function, which rapidly generates the output.
The encryption and decryption algorithm are given below:
392 R. K. Gupta et al.

Fig. 1 Proposed system for securing information

CSL Encryption Algorithm

The input if 64-bit (X) Plaintext.
Divide X into two 32-bits splits: XL, XR.
For i = 1 to 14:
XL = XL XOR P[i].
XR = XR XOR (P[i] XOR F[i]).
XL = XL XOR H (XR).
Switch XL and XR.
End for.
Switch XL and XR (undo the last swap).
XL = XL XOR P [15]
XR = XR XOR P [16]
Switch XL and XR.
XL = XL XOR P [17]
XR = XR XOR P [18]
Re-combine XL and XR.
Enhancing the Security of Sensitive Data in Cloud Using Enhanced … 393

Finally, 64bit cipher Text is generated.

CSL Decryption Algorithm:
The input if 64-bit (X) Plaintext.
Divide X into two 32-bits splits: XL, XR.
XL = XL XOR P [18]
XR = XR XOR P [17]
Switch XL and XR.
XL = XL XOR P [16]
XR = XR XOR P [15]
For i = 14 to 1:
XR = XR XOR H (XL).
XL = XL XOR (P[i] XOR F[XR]).
XR = XR XOR P[i].
Switch XL and XR (undo the last swap) End for.
Re-combine XL and XR. Finally, 64bit original Plain Text is generated.
The SAL is a lightweight cipher of 64-bit block that operates on Feistel context that
takes input as the plaintext of 64-bit and key size for 64-bit ciphertext to be produced.
By increasing the number of rounds of the Feistel SAL network, the key size may
be increased from 64 to 128 bits. SAL’s structure of Feistel works for 14 rounds
and S-box with composite field arithmetic is used at the same time, A function that
is superimposed with a special new feature. The function of Inverter H. Different
mathematical processes, such as permutation and replacement, the XOR process,
key manipulation, and the role of an inverter, are included in each Feistel round of
functions. The additional two 32-bit keys are used as a primary network towards the
conclusion of the Feistel 14 round, so that the more complicated ciphertext created
SAL. There are four levels to the lightweight encryption algorithm: Initialization
Layer, P-box layer, S-box layer, and Feistel structure. For encryption schemes we
have proposed SAL algorithm which provides more security to the application. When
data is transfer using this application, it uses more than one algorithm to encrypt input
files given by a mobile application. While practically doing and noting the time taken
by all the algorithms to encrypt the input files ranging from 500 kb to 1 MB, we found
SAL is a lightweight 64-bit block cipher that operates on Feistel. It is a feasible and
standard algorithm to protect data from being compromised. Hence, we can make
use of SAL algorithm to encrypt files before transmitting it over internet.
394 R. K. Gupta et al.

Cryptographic techniques are easier to be implemented on SAL algorithm

consisting of F function and H function. SAL decryption algorithm is a reverse
engineering process that takes input as a cipher text [8]. It processes the cipher text
and create original plain text of data given to mobile application. We have practically
noted the time taken to decrypt the cipher text by algorithms like AES, Blowfish,
CSL and SAL conclude that SAL took less time to decrypt the files to get the infor-
mation. It reduces the chance of information being modified or interrupted at the
time of transferring, maintaining the data security. Considering this SAL algorithm
is a better option.

4 Results and Findings

The data is obtained after giving the input to mobile application which is designed for
encryption and decryption for different algorithms. We have taken input is 6 different
files of type types (i.e. txt, jpg, png, doc, pdf, mp3) of different file size as shown in
Table 1. ranging from (500KB to 1MB). For each input file we have noted time taken
to encrypt and decrypt the respective file in Millisecond (ms). It has been observed
that time taken to decrypt is less then then time taken to encrypt.
Blowfish is symmetric key block cipher, above data is obtained after giving the
input to mobile application which is designed for encryption and decryption for
different algorithms. We have taken input is 6 different files of type types (i.e. txt, jpg,
png, doc, pdf, mp3) of different file size as shown in Table 1. ranging from (500KB
to 1MB). For each input file we have noted time taken to encrypt and decrypt the
respective file in Millisecond (ms). It has been observed that time taken to decrypt
is less then then time taken to encrypt.
CSL is hybrid encryption and decryption method as it uses more than one algo-
rithm to encrypt and decrypt which provides more security while transmitting data,
above data is obtained after giving the input to mobile application which is designed
for encryption and decryption for different algorithms. We have taken input is 6
different files of type types (i.e. txt, jpg, png, doc, pdf, mp3) of different file size as
shown in Table 2. ranging from (500 KB to 1 MB). For each input file we have noted

Table 1 Execution time (Blowfish Cryptosystem)

SN File name File type File size (KB) Time taken to encrypt Time taken to decrypt
(ms) (ms)
1 sample_txt .txt 170.0576 647.79 481.427
2 sample_jpg .jpg 542.1689 1740.233 1533.312
3 sample_png .png 500.582 1620.03 1412.739
4 sample_doc .doc 1013 3253.106 2865.567
5 sample_pdf .pdf 1017.731 3234.821 2859.43
6 sample_mp3 .mp3 746.2656 2387.886 2111.88
Enhancing the Security of Sensitive Data in Cloud Using Enhanced … 395

Table 2 Execution time (CSL cryptosystem)

SN File Name File type File size (KB) Time taken to encrypt Time taken to decrypt
(ms) (ms)
1 sample_txt .txt 170.0576 1140.69 980.8125
2 sample_jpg .jpg 542.1689 1138.47 1056.5101
3 sample_png .png 500.582 1107.4 1029.832
4 sample_doc .doc 1013 1180.39 1131.7053
5 sample_pdf .pdf 1017.731 1238.98 1116.8694
6 sample_mp3 .mp3 746.2656 1143.03 1068.637

Table 3 Comparative analysis of various cryptographic algorithm (Encryption file size)

SN File name File type File size (KB) AES Blowfish CSL SAL
1 sample_txt .txt 170.0576 1341.98 647.79 1140.69 939.39
2 sample_jpg .jpg 542.1689 1339.37 1740.233 1138.47 937.56
3 sample_png .png 500.582 1302.82 1620.03 1107.4 911.97
4 sample_doc .doc 1013 1388.69 3253.106 1180.39 972.08
5 sample_pdf .pdf 1017.731 1457.62 3234.821 1238.98 1020.33
6 sample_mp3 .mp3 746.2656 1344.73 2387.886 1143.03 941.31

Table 4 Comparative analysis of various cryptographic algorithm (Decryption file size)

SN File name File type File size AES Blowfish CSL SAL
(KB)
1 sample_txt .txt 170.0576 1153.89 481.42 980.81 865.42
2 sample_ .jpg 542.1689 1242.95 1533.31 1056.51 932.21
jpg
3 sample_ .png 500.582 1211.56 1412.73 1029.83 908.67
png
4 sample_ .doc 1013 1331.41 2865.56 1131.70 998.56
doc
5 sample_ .pdf 1017.731 1313.96 2859.43 1116.86 985.47
pdf
6 sample_ .mp3 746.2656 1257.22 2111.88 1068.63 942.91
mp3

time taken to encrypt and decrypt the respective file in Millisecond (ms). It has been
observed that time taken to decrypt is less then then time taken to encrypt. Similarly,
Tables 3 and 4 shows comparative analysis of various cryptographic algorithm with
execution time for encryption and decryption respectively.
396 R. K. Gupta et al.

The above data is obtained after giving the input to mobile application which
is designed for encryption and decryption for different algorithms (AES, Blowfish,
CSL and SAL) We have taken input is 6 different files of type types (i.e. txt, jpg,
png, doc, pdf, mp3) of different file size as shown in Table 1 ranging from (500 KB
to 1 MB). For each input file we have noted time taken to decrypt the respective file
in Millisecond (ms). From above table of decryption, we can say that for sample.txt
file of file size 170.0576 KB blowfish took less time 481.427 ms and after SAL took
865.42275 ms and CSL took 980.8125 ms to decrypt. When tried to decrypt image
file (i.e. sample_jpg.jpg) of size 542.1689 KB, SAL took less time i.e. 908.67525
ms as compared to AES and Blowfish. Similarly, for image of png type and size of
500.582 KB SAL took less time 998.5635 ms. While decrypting sample_doc of size
1013 KB here also SAL took less time 985.473 ms as compared to AES and Blowfish.
Similarly, for sample_pdf and sample_mp3 files of 1017.731 KB and 746.2656 KB
again SAL took less time 985.473 ms and 942.915 ms over AES and Blowfish. From
above observation we can clearly say that to decrypt data SAL algorithm would be
better choice as it takes less time and as it uses more than one algorithm which
increases the security.
The below data shown in Table 5 is obtained after giving the input to mobile
application which is designed for encryption and decryption for different algorithms
(AES, Blowfish, SAL and CSL) We have taken input is 5 different image files of
type different dimension and of 300 dpi and of different file size as shown below.
ranging from (500 KB to 800 KB). For each input file we have noted time taken to
encrypt the respective file in Millisecond (MS). From above table of encryption, we
can say time taken to encrypt image files SAL takes less time as compared to AES,
CSL and Blowfish. From above observation we can clearly say that to encrypt data
SAL algorithm would be better choice as it takes less time and its uses more than
one algorithm which increases the security, before transferring files over any internet
medium we can use SAL algorithm to encrypt files.

5 Conclusion

Enhancing the security of sensitive data in cloud has been trending research topic
different encryption & decryption algorithm are used to protect data in cloud we are
us using enhanced encryption scheme to secure data in cloud. The study analyzed
the time taken for different algorithms to decrypt and encrypt files of different types
and sizes in a mobile application. The results showed that the SAL algorithm took
less time compared to AES, Blowfish, and CSL algorithms for both encryption and
decryption, making it a better choice for enhancing security when transferring files
over the internet medium.
Enhancing the Security of Sensitive Data in Cloud Using Enhanced … 397

Table 5 Encryption of images using various cryptographic algorithms

Image Dimension Resolution File size AES Blowfish SAL CSL
in pixel (dpi) (KB)
1400 × 300 794.99 1332.42 2529.50 999.32 1132.56
1400

3000 × 300 678.37 1357.69 2192.35 1018.27 1154.04

3000

3000 × 300 700.44 1354.38 2218.50 1015.78 1151.22

3000

3000 × 300 550.7197 1321.05 1793.771 990.78 1122.89

3000

3000 × 300 729.77 1341.96 2325.35 1006.47 1140.67

3000
398 R. K. Gupta et al.

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Female Influencers: Examining Bahraini
Social Media’s Portrayal of Female
Subjectivity

Layla Faisal Alhalwachi

Abstract The study explores the representation of female subjectivity on social

media, highlighting the significant impact that these women’s images have on the
gendered narratives and discourses that saturate the public sphere. The study focuses
on the patterns of femininity portrayed by female influencers and the relationships
they could form with their followers. It emphasizes how these popular personal-
ities embody post-feminism’s core values of self-realization, independence, and
empowerment after introducing the notion of post-feminism’s sensitivity. Finally,
it depicted two of Bahrain’s most well-known social media influencers, Rubi Rahim,
and Manal, are examined, emphasizing how well they can serve as examples of
successful female digital businesses. The goal of the analysis is to demonstrate
how these media personae offer an ambivalent representation of female subjectivity
because, on the one hand, they highlight women’s capacity to assert themselves as
ambitious, competently. They treat women as autonomous, free-choice subjects (as
postfeminist culture dictates), but they also use the drive for female self-fulfillment
for marketing purposes, turning it into a self-branding instrument.

Keywords Gender · Social media · Patterns of femininity · Female influencers ·

Feminism · Followers · Kingdom of Bahrain

1 Introduction

The epidemic brought on by the Covid-19 virus’s spread has significantly impacted
the social, economic, and cultural landscape in a rapidly changing environment.
Altering social dynamics, resulting in significant changes to how participants define
their identities as well as how they interact and build meaningful social bonds. In
some respects, the lockdown period has made the overlap between physical and

L. F. Alhalwachi (B)
Bahrain Polytechnic, Bahrain, Saudi Arabia
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 401
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_30
402 L. F. Alhalwachi

online space—which distinguishes modern society and blurs the lines between the
two dimensions—even more obvious.
The movement of people in such an environment is being noted for a long time
by sociologists and communication academics, who are investigating models that
seamlessly combine the activities carried out in the two domains who are testing
interaction models that seamlessly combine the activities carried out in the two
domains.
Social players employ sociability behaviours that bind the in-person and online
dimensions together, building networks of relationships based on emotional simi-
larity, since they are driven by a logic that values the continuity of the communicative
experience over the division of identities, networks, or communication patterns [1],
they are motivated by a logic that prioritises these concepts.
Reference [2] noted how the dynamics of self-presentation and impression
management are carried out by social actors, who interact through networks that
bring together commonly distinct audiences, when she called attention to the progres-
sive “context collapse” linked to the growth of social media a few years ago. Due
to the emergence of such mechanisms, academics are paying more attention to how
people connect online to better understand the dynamics of social bonding as well
as the function those digital platforms play in the creation of fresh collective imag-
inations. The relationship between the examination of these occurrences and the
gender-related reflections is evident. Studies, as media remain a reservoir of soci-
etal models and representations that women must deal with daily the relationship
between the examination of these occurrences and the gender-related reflections is
evident. studies, as media remain a reservoir of societal models and representations
that women must deal with daily [3].
Reference [4] noted, there is currently a significant emphasis in public discourse
on the contradictory nature of gender constructions, it seems necessary to simul-
taneously question how the interactions between media and gender produce new
forms of subjectivity, imaginaries, and models of action. According to this view-
point, the dedication to the development of various female identities must reconcile
with the representations of women offered by the communication system, prompting
researchers in the fields of gender and feminist media studies to look into both the
advantages and dangers of this connection.
The rapid use of social media and digital media in general has further complicated
this situation by increasing both the number of potential role models and the surveil-
lance technologies that people, particularly women, must contend with. In a recent
article, [5] citing the findings of a survey of more than 200 young people between
the ages of 18 and 30, highlighted how the interviewees expressed the difficulty of
constantly having to live up to the normative models communicated by social media,
while also emphasizing their prescriptiveness about social roles. Young women in
particular gripe about being constantly observed by others, a perception heightened
by the features of cell phones as well as the platforms themselves, the sense of.
In fact, this process forces the girls to constantly work on themselves, their eating
habits, and their bodies to fit the social media image they present with the expectations
of others, whether it be their peer group, or the followers dispersed throughout the
Female Influencers: Examining Bahraini Social Media’s Portrayal … 403

many platforms. However, as we will see in more detail in the paragraphs that follow,
this pursuit of excellence is coupled with a strong desire for authenticity, putting
women in what [6] refer to as a gendered double bind. Not having to be either too
real or insufficiently real.
The emergence of new female subjectivities in such a media environment must
also contend with the rise in popularity of social media influencers—online celebrities
who can gather a substantial following across a range of digital channels, personal
blogs, Instagram, Tik Tok, or YouTube, for instance.
According to [7] the gendered narratives and discourses that are common in these
communities develop or duplicate standards and patterns of femininity that young
women must deal with, frequently feeling inadequate or wrong.
Considering these factors, the study seeks to investigate how female subjectivity is
created and reproduced on social media. To understand how the gendered narratives
and imaginaries put out by the most well-known female influencers in the country
are constructed between the online and offline worlds, it analyses the peculiarities
of the Italian setting. According to this viewpoint, the first section of the essay will
concentrate on the characteristics that define, in contemporary society, the media
representation of female identity, and the second section will analyse the role of
female influencers to highlight the qualities of the relationships they are able to forge
with their female audience both online and in person.
With an investigation of two of the most well-known social media influencers
in The Kingdom of Bahrain, Rubi Rahim and Manal, the article’s last portion will
examine the pattern of female subjectivity that these celebrities represent. We will try
to comprehend how these very different persons’ personal and professional histories
might serve as an illustration of the creation of the type of postmodern (and neoliberal)
femininity at the heart of gender studies reflection by doing reflection on them.

2 Media Gender Stereotypes from the Past and Present

Since the 1990s, [8] notes, gender issues have taken up more and more space in
the mediated public sphere and popular culture, but they are often addressed in a
simplistic and frequently trivial manner. Instead of highlighting its ability to shed
light on the complex power relations defining contemporary society, mainstream
media representations of feminism (and femininity) have begun to emphasize its
stylish, glamorous, and hip character.
In the discipline of gender studies, the study of femininity has been linked to
diverse political, social, and cultural interpretations of postmodernity, reflecting some
of its ideals and, in some cases, ideological inclinations. Many analyses have shown
this to be the case. [4, 8, 9] and for example, have discussed the complex ramifications
of the postfeminist model of femininity, emphasizing how in media outlets like
newspapers, magazines, television, and the internet, the tropes of freedom, choice,
and realized equality have taken the place of the conventional feminist political and
linguistic repertoire.
404 L. F. Alhalwachi

The aspect of the postfeminist approach that is most frequently criticised is

the emphasis on women as unique individuals and their ensuing detachment from
communities and social groups, which renders public feminist thinking ineffective
as a critique of inequalities and traditional patriarchal power structures. The social
image of women as it is presented in the media has been influenced by choice femi-
nism, as defined by [10]. This philosophy emphasises the freedom of individuals to
construct their own biographical paths in full autonomy, reducing the role of any
type of structural or cultural conditioning.
The term “neoliberal feminism” was used by [11] to refer to a countercultural
movement that places all the burden for managing one’s own affairs on women.
“I started to term this version of feminism neoliberal feminism, since it disavows
the socio-economic and cultural forces affecting our lives,” says the author, erasing
all allusions to collectively, social justice, and injustice from feminist discourse.
According to [12], “this feminism also helps to spawn a new feminist subject, one
who assumes complete responsibility for her own well-being and self-care.
In fact, this type of market-driven feminism, which has, unsurprisingly, found
a lot of room in the media landscape, focuses on the mechanisms for individual
empowerment and encourages women to put themselves first in order to achieve the
coveted balance between personal/affective life and professional success5. Such a
“having it all” model [13] exemplifies for young women the desire to pursue a career
without sacrificing either their femininity or their desire to have children by fusing
the ideal yet unattainable union of the successful worker and the model of the perfect
mother/homemaker. According to this strategy, women can achieve their goals by
working hard and planning their days well. This form of market-driven feminism,
which is unsurprising, has found a lot of room in.
The media environment places a strong emphasis on personal empowerment
strategies, which encourages women to put themselves first to strike the long-desired
balance between success in their personal/affective lives and their careers. Such a
“having it all” model [13] exemplifies for young women the desire to pursue a career
without sacrificing either their femininity or their desire to have children by fusing
the ideal yet unattainable union of the successful worker and the model of the perfect
mother/homemaker. This viewpoint contends that women can achieve their goals by
working hard and planning their days perfectly.
In fact, this type of market-driven feminism, which has, unsurprisingly, found
a lot of room in the media landscape, focuses on the mechanisms for individual
empowerment and encourages women to put themselves first to achieve the coveted
balance between personal/affective life and professional success. Such a “having it
all” model [13] exemplifies for young women the desire to pursue a career without
sacrificing either their femininity or their desire to have children by fusing the ideal
yet unattainable union of the successful worker and the model of the perfect mother/
homemaker. According to this strategy, women can achieve their goals by working
hard and planning their days well. This form of market-driven feminism, which is
unsurprising, has found a lot of room in.
The media environment places a strong emphasis on personal empowerment
strategies, which encourages women to put themselves first to strike the long-desired
Female Influencers: Examining Bahraini Social Media’s Portrayal … 405

balance between success in their personal/affective lives and their careers. Such a
“having it all” model [13] exemplifies for young women the desire to pursue a career
without sacrificing either their femininity or their desire to have children by fusing
the ideal yet unattainable union of the successful worker and the model of the perfect
mother/homemaker. This viewpoint contends that women can achieve their goals by
working hard and planning their days perfectly.
However, the possibility of this gender illusion becoming widely diffused, espe-
cially through media, advertising, and the internet presenting an idealized view of
womanhood that symbolically seeks to bring together (post)feminism and femininity,
while also perpetuating unrealistic feminine norms and stereotypes.
Social media, particularly on the internet, feeds similar gender norms by
portraying idealized, frequently unrepresentative pictures of women. The use of
dissimulative techniques by female influencers to project an image of accomplished
and successful women tends to give a misleading representation of female subjec-
tivity, as will be seen later; The pursuit of the ideal trifecta is still very much alive
on Instagram, as [7] point out. If, on the one hand, the rise in women’s presence in
social media culture has made many feminisms claims more well-known (some-
times turning them into trending hashtags7), On the other side, it has muddied
the urge to challenge gendered power structures and the patriarchal structure of
society and partially emptied them of their political substance. Popular feminism,
which is currently a media trend8 [14], is well aligned with neoliberal values of
self-improvement, ambition, and female entrepreneurship on the one hand, and on
the other hand, while also emphasizing individual responsibility and choice, much
like post feminism. In fact, the larger social process that forces people to deal with
gender issues appears to have an impact on it as well. By presenting a view of female
subjectivity that is strong but free of the most contentious aspects, particularly in
respect to.
The production of a gender imaginary that is somewhat depoliticized, as opposed
to the gendered power relations ingrained in social structures, is facilitated by main-
stream media and digital platforms. This image is one of a strong, adaptable woman
who also chooses the consumption sphere as the location for the exercise of her
agency.
In fact, the idea of “Girl Power” has found a home in the neoliberal media system,
or a representation of femininity that emphasizes her self-affirming and empowering
qualities while at the same time softening her desire to reform gendered power
structures in society. As girls are told that power and gender equality have already
been achieved, the depoliticized versions of Girl Power offered by the dominant
media institutions create barriers to their active citizenship and political engagement.
“By presenting a world with no need for social change, this use of the Girls Power
discourse fails to provide girls with tools to understand and challenge situations
where they expel [15]. It is obvious how such a strategy results in a difficult form of
female subjectivity.
Moreover, she is ambitious without being confrontational, reinforcing the stereo-
type that places the “happy feminist” at the epicentre of popular feminism, the exact
406 L. F. Alhalwachi

opposite of the “feminist killjoy” [16] who, in the eyes of the public, embodied the
second wave of feminism in the 1970s.
However, from our perspective, it would be incorrect to attribute the female pres-
ence on social media to a single model because digital platforms host a variety
of representations and gender models; the influencer universe itself is undoubt-
edly differentiated10, allowing users to experience various forms of recognition and
belonging through them.

3 Influencers on Social Media and Developing a Close

Relationship Among Female Viewers

The ability of users to create unique and creative material utilizing tools that allow
them to narrate their everyday lives or ideas in the first person has risen hand in hand
with the important position of social media in the communication ecosystem. In this
setting, the social media influencer has emerged as a persona capable of transferring
the renown that was initially gained on digital platforms into an offline realm. Internet
users who “acquire a relatively large following on blogs and social media through the
textual and visual narration of their lives and lifestyles, engage with their following
in digital and physical spaces, and monetize their following” are what [17] refers to
as these individuals Not having to be either too real or insufficiently real.
In such a media environment, the creation of new female subjectivities must also
contend with the rising prominence of social media influencers—online stars who
can amass a sizable following across a variety of digital platforms, such as personal
blogs, Instagram, Tik Tok, or YouTube. The gendered narratives and discourses
that are prevalent in these communities generate or replicate ideals and patterns of
femininity, which young women must contend with, frequently feeling inadequate
or wrong, as [7] illustrated.
In the past few years, their communication strategy tries to reduce the cogni-
tive and emotional barrier between consumers, therefore they select a purposefully
straightforward and casual expressive approach [18]; as they become well-known,
the communicative relationship alters, and the followers’ distance tends to increase.
The ability of influencers to engage users through the sharing of their own personal
experiences, blurring the line between the public and private spheres, and thereby
fostering the triggering of an identification mechanism is what initially makes them
popular [19]. However, some of them later develop the characteristics of true main-
stream celebrities, able to occupy the centre of the media scene and turn the notoriety
gained through likes into a real-world following [20].
This is the example of Rubi Rahim, one of the most well-known fashion influencers
in the Gulf region, who began her career while in college by uploading daily images
of her outfits on a blog and, as we shall see in more detail in the following paragraph,
has amassed nearly 30 million Instagram followers who adore her famous lifestyle.
Female Influencers: Examining Bahraini Social Media’s Portrayal … 407

It’s essential for influencers to be able to develop a close bond with their audi-
ence [21], for example, by posting content that makes people instantly recognize
themselves or that can evoke aspirational dynamics. In fact, the foundation of these
actors’ great performances is their capacity to come across as trustworthy partners
to an engaged audience, with whom they can forge a bond based on trust and showy
authenticity.
Influencers must look commercially reliable yet transparent, adopting consump-
tion decisions congruent with their own image and lifestyle, and declare themselves
as powerful advertising testimonials [22].
Focusing the investigation on the female audience and its relationship with female
influencers, it becomes clear how the emotional tie between followers and influencers,
who also utilize the account of their daily lives to create this bond, is precisely one
of familiarity and intimacy. Given that celebrities are viewed as genuine and honest,
revealing personal information in this setting fosters a unique relationship based
on trust. While it is true that disclosing information and personal experiences is
used to foster an intimacy with audiences [23], it is also obvious that this perceived
intimacy does not equate to accessibility or emulation13, as many of these glamorous
individuals lead lives that are objectively very dissimilar from those of most internet
users.
But what we want to emphasize here is how these female characters also help
to create a collective female imaginary by giving the audience who watches them
a personal interpretation of what it means to be a woman today. Influencers are
involved in a persistent identity project that swings back and forth between the
online and offline worlds. They do this by designing and projecting their self-assured,
emancipated view of women in the online world onto digital platforms.
Even though the media’s successful femininity models are rather diverse, scholars
like [12, 24] stigmatize the feminist sensibility that is prevalent in the mediascape (and
on social media) by calling it celebrity feminism or even glossy feminism. They view
the media system as a key cultural site for the re/production of normative, limited and
limiting gender and sexual identities and re/production of dominant, heteronormative
[24]. These critics view celebrity feminism as a trend that influences many people
but lacks any true political commitment.
Famous females, Hollywood actors, and well-known public figures to take a posi-
tion on specific gender problems or to formally identify as feminists 15. Reference
[7] assert that while feminism has finally gained acceptance in the public eye, it has
also evolved into an unanticipated source of social capital, or, as they put it, a “trend”
as opposed to a genuine political and intellectual position. This viewpoint alludes
to nebulous feminist ideas seem less like a sincere declaration of devotion and more
like a calculated move to improve one’s public image.
The Instagram profile is accurate. The most well-known female influence in the
world reproduces a female subjectivity that is confident, aggressive, and self-aware,
but lacks the desire to challenge hegemonic power systems that has long been asso-
ciated with female activism since the 1970s. social media is flooded with pictures of
ambitious women who are pursuing their professional ambitions without sacrificing a
fulfilling personal and emotional life. These women inspire us with their messages of
408 L. F. Alhalwachi

confidence, feminism, and self-worth without ever focusing on the structural issues
that continue to underlie gender inequality.
In 2017, a psychological understanding of femininity and a social paradigm that
holds each woman accountable are in play. Patriarchal culture masks the limita-
tions of a social framework still lacking in gender equality with the psychological
language of empowerment, choice, and self-responsibility, encouraging her to seek
for greater self-confidence by suggesting individual solutions to structural difficul-
ties. The emphasis is instead placed on women self-regulating and locating the “solu-
tions” to their problems within a newly upgraded form of confident subjectivity, as
the scholars state: “The confidence culture exculpates social, economic, and political
forces for their role in producing and maintaining inequality.
As a result, it rejects political criticism and throws the idea that the personal is
political on its head. It works by placing the blame and responsibility for all obstacles
and challenges on women themselves, despite its apparent warm and affirmative
approach to women to ’lean in” and believe in themselves [25].
The Instagram accounts of these celebrities also stand out for the almost complete
absence of any mention of a collective subject or collective political action. Instead,
the most explicit claims, which primarily centre on the idea of self-empowerment,
refer to an individual dimension and are decried as individual struggles for one’s own
affirmation of one’s freedom of choice. The general perception is that this genera-
tion of influencers does not deeply perceive the existence of a collective horizon
of meaning, continuing instead to pursue a simplified gender discourse, which is
based on individualism and personal agency, apart from the campaigns against sexual
harassment and rape culture, which began to spread virally as hashtags on social
media.
In this way, the formation of the female subject, as it is portrayed particularly on
social media, seems to be influenced by personal rather than structural or systemic
difficulties, neglecting or at the very least downplaying the importance of gender
politics in the public discourse. In this regard, it is crucial to emphasize that social
media platforms are anything but neutral and that their affordances are changing
the norms and circumstances of social interaction [26]. As a result, many users are
changing the ways in which they present their online identities.
As [27] note, many female Instagram users consciously avoid addressing femi-
nist issues that do not fit the platform’s interaction order and even refrain from
expressing political viewpoints that might cause audience members to react nega-
tively. The development of influencers’ Instagram profiles is far from unrelated
to these dynamics, particularly regarding the representation of their feminine and
feminist subjectivity.
Although unique, these young influencers’ social media personas portray strong
subjectivity and feminine figures who assert the right to use their own agentic
capacity, positioning them as role models for millions of followers. However,
according to some feminist scholars, these occurrences are mostly limited to one
area of life—consumption—as if in today’s culture, female agency can only coexist
with consumer agency.
Female Influencers: Examining Bahraini Social Media’s Portrayal … 409

According to this viewpoint, [28] notes how consumer culture has gradually
replaced traditional social institutions like family and education in the process of
producing and reproducing the category of girl as a particular type of subjectivity. In
addition, according to the scholar, the sprinkling of selective, even parent-friendly,
feminist values present in consumer culture is likely to conceal the gendered power
relations inscribed in that culture [28].
This theory holds that girls’ social power and purchasing capacity are corre-
lated, which restricts their ability to act outside of the realm of consumerism. While
[29] provides a more in-depth analysis of the relationship between female agency
and particular consumption experiences, we will only highlight how the freedom
provided by the diverse consumption patterns challenges normative femininity and
enables girls to defy gender stereotypes here. We will specifically discuss the meaning
young women attribute to their decision to tattoo their bodies. A strong means of
communication, an instrument for expressing one’s subjectivity or proclaiming one’s
freedom, can be found in the way one dresses or the type of music one listens to.
Influencers openly promote new female patterns in their capacity as cultural
producers, while also exploiting consumer decisions to reclaim their agency and
prominence in the public sphere. The active and creative role of consumers can be
highlighted if we define consumer agency, as [30] did, as the capacity to alter and play
with meanings. This places consumers at the nexus of the production and consuming
dimensions19.
In addition, consumer agency plays a significant role in identity-expressive
purchases, as noted by [33] making embodied consumption practices a tool for
creating one’s own ideal gendered identity as well.

4 Consumer Decisions Are Ultimately Just One Form

of Self-expression and Personal Freedom

Focusing the investigation on the female audience and its relationship with female
influencers, it becomes clear how the emotional tie between followers and influencers,
who also utilize the account of their daily lives to create this bond, is precisely one
of familiarity and intimacy. Given that celebrities are viewed as genuine and honest,
revealing personal information in this setting fosters a unique relationship based
on trust. While it is true that disclosing information and personal experiences is
used to foster an intimacy with audiences [23], it is also obvious that this perceived
intimacy does not equate to accessibility or emulation13, as many of these glamorous
individuals lead lives that are objectively very dissimilar from those of most internet
users.
But what we want to emphasize here is how these female characters also help
to create a collective female imaginary by giving the audience who watches them
a personal interpretation of what it means to be a woman today. Influencers are
involved in a persistent identity project that swings back and forth between the
410 L. F. Alhalwachi

online and offline worlds. They do this by designing and projecting their self-assured,
emancipated view of women in the online world onto digital platforms.
Even though the media’s successful femininity models are rather diverse, scholars
[14, 24] stigmatize the feminist sensibility that is prevalent in the mediascape (and
on social media) by calling it celebrity feminism or even glossy feminism. They
view the media system as a key cultural site for the re/production of dominant,
heteronormative, and normative gender and sexual identities [24]. These critics view
celebrity feminism as a trend that influences many people but lacks any true political
commitment.
Famous females, Hollywood actors, and well-known public figures to take a posi-
tion on specific gender problems or to formally identify as feminists15. [7] assert that
while feminism has finally gained acceptance in the public eye, it has also evolved
into an unanticipated source of social capital, or, as they put it, a “trend” as opposed to
a genuine political and intellectual position. This viewpoint alludes to nebulous femi-
nist ideas seem less like a sincere declaration of devotion and more like a calculated
move to improve one’s public image.
The Instagram profile is accurate. The most well-known female influence in the
world reproduces a confident, combative, and self-aware female subjectivity, but
without the drive to oppose hegemonic power structures that has been traditionally
linked with female activism since the 1970s. social media flooded with pictures of
ambitious women who are pursuing their professional ambitions without sacrificing a
fulfilling personal and emotional life. These women inspire us with their messages of
confidence, feminism, and self-worth without ever focusing on the structural issues
that continue to underlie gender inequality. In 2017, a psychological understanding
of femininity and a social paradigm that holds each woman accountable are in play.
Patriarchal culture masks the limitations of a social framework still lacking in
gender equality with the psychological language of empowerment, choice, and self-
responsibility, encouraging her to seek for greater self-confidence by suggesting
individual solutions to structural difficulties. As the scholar’s state: “The confidence
culture exculpates social, economic, and political forces for their role in producing
and maintaining inequality, the emphasis is instead placed on women self-regulating
and locating the “solutions” to their problems within a newly upgraded form of
confident subjectivity.
As a result, it rejects political criticism and throws the idea that the personal is
political on its head. It works by placing the blame and responsibility for all obstacles
and challenges on women themselves, despite its apparent warm and affirmative
approach to women to “lean in” and believe in themselves [25].
The Instagram accounts of these celebrities also stand out for the almost complete
absence of any mention of a collective subject or collective political action. The
most explicit statements, however, which mainly focus on the concept of self-
empowerment, allude to an individual dimension, and are criticised as being personal
fights for one’s own affirmation of one’s freedom of choice. Except for the campaigns
against sexual harassment and rape culture, which started to circulate virally as hash-
tags on social media, the general perception is that this generation of influencers does
not deeply perceive the existence of a collective horizon of meaning and instead
Female Influencers: Examining Bahraini Social Media’s Portrayal … 411

continues to pursue a simplified gender discourse that is based on individualism and

personal agency.
In this way, the formation of the female subject, as it is portrayed particularly on
social media, seems to be influenced by personal rather than structural or systemic
difficulties, neglecting or at the very least downplaying the importance of gender
politics in the public discourse. In this regard, it is crucial to emphasize that social
media platforms are anything but neutral and that their affordances are changing
the norms and circumstances of social interaction [26]. As a result, many users are
changing the ways in which they present their online identities [27].
According to [28], many female Instagram users purposefully avoid addressing
feminist problems that do not match the platform’s interaction order and even refrain
from expressing political opinions that can offend viewers. The growth of influencers’
Instagram profiles is not at all unrelated to these processes, especially in terms of
how they depict their subjectivity as feminists and women. Although unique, these
young influencers’ social media personas portray strong subjectivity and feminine
figures who assert the right to use their own agentic capacity, positioning them as role
models for millions of followers. However, according to some feminist scholars, these
occurrences are mostly limited to one area of life—consumption—as if in today’s
culture, female agency can only coexist with consumer agency.
According to this viewpoint, [29] notes how consumer culture has gradually
replaced traditional social institutions like family and education in the process of
producing and reproducing the category of girl as a particular type of subjectivity. In
addition, according to the scholar, the sprinkling of selective, even parent-friendly,
feminist values [29] present in consumer culture is likely to conceal the gendered
power relations inscribed in that culture.
This theory holds that girls’ social power and purchasing capacity are corre-
lated, which restricts their ability to act outside of the realm of consumerism. While
[30] provides a more in-depth analysis of the relationship between female agency
and particular consumption experiences, we will only highlight how the freedom
provided by the diverse consumption patterns challenges normative femininity and
enables girls to defy gender stereotypes here. We will specifically discuss the meaning
young women attribute to their decision to tattoo their bodies. A strong means of
communication, an instrument for expressing one’s subjectivity or proclaiming one’s
freedom, can be found in the way one dresses or the type of music one listens to.
Influencers openly promote new female patterns in their capacity as cultural
producers, while also exploiting consumer decisions to reclaim their agency and
prominence in the public sphere. The active and creative role of consumers can be
highlighted if we define consumer agency, as [31] did, as the capacity to alter and play
with meanings. This places consumers at the nexus of the production and consuming
dimensions.
In addition, consumer agency plays a significant role in identity-expressive
purchases, as noted [33], making embodied consumption practices a tool for creating
one’s own ideal gendered identity as well. Consumer decisions are ultimately just
one form of self-expression and personal freedom. “Top Trend Fashion” by Rubi
Rahim: The Bahraini route to female influencers.
412 L. F. Alhalwachi

It is worthwhile quickly focusing on the Italian media landscape to wrap up the

research on the female personalities that dominate social platforms and, consequently,
the ideal of femininity they establish. The most popular Italian female influencers on
social media, according to data analysis, are Rubi Rahim and Manal. The former is a
digital entrepreneur who converted discussing her buying choices and lifestyle into
a career in 2009 after starting the fashion blog “The Blonde Salad.” She has since
gained millions of followers throughout the globe with her practically live description
of her everyday life. Contrarily, Manal is a food blogger whose early popularity was
based on the posting of recipe videos.
The popularity of food blogger Manal, on the other hand, was first based on
recipe videos shared on. She swiftly became so well-known, albeit on a national
scale, on YouTube and the Instagram, then she has established her own beauty salon
and clothes boutique.
Although they represent, as we shall see, two very different types of women,
it is easy to spot some characteristics of the influencer in their online behaviour,
beginning with the tactics they employ to interact with their followers. According to
[32], social media facilitates the “relational labour” necessary to establish and main-
tain relationships with one’s own audience, boosting the emotional bond between
followers of an influencer and their followers. As we’ve already mentioned, social
celebrities frequently share basic information about their personal lives to engage
and interest fans, thus obscuring the line between their private and public lives [20].
In the end, this is a successful communication tactic that enables influencers to
maintain consistency in their relationship with followers, strengthening the sense of
intimacy and emotional closeness that is the foundation of identification processes.
In a similar vein, both influencers alternate moments of in-person meetings with
their fans in formal and informal settings with interactions mediated through digital
platforms, strengthening the sense of continuity of the communicative experience
from the online to the offline sphere: These in-person contacts complement online
interactions since influencers.
are expected to act in ways that correspond to the personas they have portrayed
on their blogs and social media.
As a result, the intimacy developed and negotiated on digital platforms is carried
over to real-world settings, creating a feedback loop that intensifies followers’
feelings of intimacy toward influencers [21].
But from our perspective, it is even more fascinating to observe how two very
connoted and distinct models of women are embodied by Italian social celebrities,
almost to the point of appearing as paradigmatic figures. For instance, Rubi Rahim is
portrayed in the media as an influential entrepreneur who knows her own capabilities
and selects her own goals without sacrificing her personal or family life, and who
strives to accomplish “the ultimate trifecta” [13].
On her social media profiles, Rubi Rahim alternates glitzy images of her profes-
sional commitments with moments of family life21, demonstrating the neoliberal
feminism concept of subjectivity that encourages women to take charge of their own
lives and hold themselves accountable for their accomplishments and failings without
recourse to calls for group action [33].
Female Influencers: Examining Bahraini Social Media’s Portrayal … 413

In fact, the influencer proposes to users a rather idealized model of a woman far
removed from reality, a model in which self-branding, individualized feminism, and
entrepreneurship as women’s empowerment appear to coincide [19]. The influencer
appears to effortlessly manage this difficult balance between the roles of testimonial
for significant brands, loving wife, and mother.
Adopting the vocabulary of individualism, autonomy, and choice entails, de facto,
changing feminism into post feminism, as [34] points out. Because of this, topics like
women’s right to privacy and dedication to gender equality—to which Rubi Rahim
refers—are negated in a generalised and normalised manner, missing in any case
those political allusions that historically characterised the struggle against gendered
structural inequities.
Although many users, mostly women, are criticizing these representations of
femininity as unrealistic, deceptive, or unattainable for those who do not have the
same financial resources as the influencer, social media can also be a tool for vehement
protests and personal attacks that, in the case of Rubi Rahim, concentrate specifically
on the updated version of the ideal of “having it all” that she proposes to the outside
world. According to [7], for these anti-fan communities, those “false” projections
of profession, family, and aesthetic perfection constitute retrograde or unfeminism
narratives and reinforce unrealistic expectations for women.
Rubi Rahim, a style icon who has managed to develop her own character over
time, seems to be fully aware of the rules of the market from a commercial standpoint,
striving to accurately produce and reproduce the model of woman that her followers
would like to be. This is typical of a successful brand. This contrasts with the language
of authenticity that permeates many influencers’ social media platforms.
Within this framework, the rhetoric of “having it all,” for which Rubi Rahim serves
as an emblem, emerges as a component of a meticulously planned, deftly handled,
and frequently renegotiated self-brand effort.
The influencer’s regular social media posts about their family life also play a
significant part in this marketing plan because they help to solidify the image of Rubi
Rahim as a multifaceted, multifaceted woman. We have watched “#Rubi_R” brand
gradually expand since the couple’s marriage to rapper Rubi and the birth of their
two children, managed as a true strategic asset capable of boosting the influencer’s
visibility and financial power.
On the other side, Manal represents a more conventional and, in some ways,
comforting feminine subjectivity.
She still serves as an example of a well-known and established woman in the
Bahraini media landscape, but she has grown immensely popular on social media by
focusing on the role of the authentic and spontaneous housewife who seraphically
shares recipes and cooking advice with followers.
Referencing her husband and their family life, as seen in the numerous photos
posted on social media, strengthens the sense of familiarity with users while also
turning the couple’s image into a salable product. In a few Instagram stories, for
instance, her husband begins cooking in their home kitchen while his wife Manal
records videos, as a typical married couple would do.
414 L. F. Alhalwachi

The millions of women who follow Manal on television and through digital media
recognize her for her genuine demeanor and communication style that is tuned to
the register of simplicity. In contrast to Rubi Rahim, who can evoke aspirational
dynamics in viewers, Manal represents a more attainable female role model that
does not try to challenge conventional gender norms or the legitimacy of power
relations. In fact, one may refer to a rather traditional media portrayal of female
subjectivity that fits into the successful framework of so-called culinary shows in
which women are typically shown in the position of mothers/wives preparing meals
for the family.
As a result of this type of media imagination, the domestic environment, and the
presence of a female figure in the kitchen reinforce the intimate relationship that has
been built with the audiences, effectively triggering a mechanism of identification
with the show’s protagonists.
While [35] was correct in stating that “gendered divisions around cooking remain
largely over place and intention in television, as in other corners of the popular
imagination: women cook at home for their family and loved ones, while men cook
in public, for pay, and mostly for (adoring) strangers,” the reality today appears to
have changed somewhat as the web and social media have started to expand the
spaces (and roles) available to women. When it comes to Manal, it is possible to
draw attention to the existence of a dual expressive register:
It is obvious that the influencer represents a successful business model because she
was able to maximize the potential of social media, and the informal tone that char-
acterizes her videos refers to a communicative choice meant to reduce the emotional
distance from the users and favor their identification. As a result, Manal offers a case
study of a woman who was successful in using her professional abilities to create a
female success narrative.

5 Discussion and Conclusion

The various patterns of femininity are constructed and made visible by the media, as
we’ve already explored. Digital platforms have doubled the spaces open to women
and made it simpler for them to access.
the locations where culture is produced. Information and communication tech-
nology can prove to be an outstanding weapon for advancing gender equality and
women’s empowerment, as the description of the goals established by the United
Nations for positive Sustainable Development emphasizes.
Social media influencers hold a more important place in this interconnected envi-
ronment because they work together to create texts and discourses that affect how
the audience perceives gender identities.
They serve the purpose of legitimizing cultural behaviors and symbols by their
public visibility, enabling internet users to express their gender subjectivity with
some degree of freedom. Since media portrayals, as we have noted, have a huge
impact on gendered narratives and discourses, the matter of the models of femininity
Female Influencers: Examining Bahraini Social Media’s Portrayal … 415

that social media send to the public remains of utmost importance. According to
this viewpoint, examining the role performed by female social media influencers
may help us to learn more about the action models that currently inspire women and
shape their collective imaginaries.
Most young women have the feeling of being inadequate on social media, as noted
by [5], among others, making it even more important to understand the mechanisms
that control the media’s development of normative gendered identities [36].
According to our analysis, social celebrities, as we have defined them, use the story
of their everyday lives to maintain the bond they have built with their audiences and to
establish themselves as reliable partners in the communicative process. This allows
them to create representations of femininity in which women can see themselves.
Consumers are more likely to mirror themselves in the ideal of women personified
by the influencer because to the discourse made possible by digital media and the
interaction’s ability for two-way communication.
Influencers have established direct lines of communication with their audiences
by fully utilizing the process of disintermediation facilitated by the growth of digital
technologies. They have also learned to manage relationships with subjects who are
more active and interconnected and who are able to naturally adapt their behavior to
the new two-way interaction modes.
According to a few academics in the field of gender and feminist media studies,
the female subjectivity portrayed on social media is primarily inspired by an ideal of
digital entrepreneurial femininity steeped in neoliberal and postfeminist ideology, a
social representation that values women’s independence, individual capabilities, and
self-empowerment [11, 12].
Although very different from one another, the two Italian influencers under exam-
ination, [36], represent this model because they both used social media in a clever
way to launch lucrative businesses that allowed them to pursue their passions for
cooking and fashion, respectively. The lines between the public and private realms
are becoming increasingly hazy because of similar corporate feminist trends that
view one’s personal life and experiences as strategic assets and transform online
interactions into a successful commercial activity [36].
However, other important factors must unavoidably be considered while analyzing
the femininity model that Manal and Rubi Rahim suggest using digital platforms,
beginning with its dominance in the collective imagination.
If it is true that the two celebrities, one dedicated to modernizing the “having it
all” woman prototype and the other to outlining the profile of the 2.0 housewife,
in some ways represent stereotyped and one-dimensional figures, it is equally clear
that they have helped to legitimize and increase the visibility of female figures in the
Italian social media landscape.
These are two guys who, via the successful use of transmedia narrative mech-
anisms [37] capable of ensuring the emotional engagement of followers, have
succeeded in asserting their own voices in the public sphere.
As is well known, using a variety of media and languages encourages audience
participation on a deeper level since they feel actively involved in the narrative that
is being developed for them across many digital platforms.
416 L. F. Alhalwachi

To better understand the mechanisms that produce female subjectivity in various

social and cultural contexts, it is crucial to emphasize the need to bolster reflection on
the social construction of gender with new analytical tools. While studying gender
representations in the media is still crucial today, it would be crucial, in our opinion,
to thoroughly examine the practices and contexts of consumption in which these
representations occur. In the end, it appears that Manal and Rubi Rahim have both
been able to provide their fans with a pattern of femininity to which they may refer,
actively contributing to the creation of those varied female imaginaries from which
very diverse women today might take inspiration.

6 Ethics Statement

According to local law and institutional standards, the study using human volun-
teers did not require ethical review or permission. In compliance with national law
and institutional standards, individuals did not need to provide written informed
permission to take part in this study.

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Does COVID-19 Have a Significant
Impact on Digital Finance? Analysis
of Indian Digital Payment System

Mohammad Irfan , Zakir Hossen Shaikh , Rohit Singh , Adel Sarea ,

and Sonali Dhimmar

Abstract The world is changing rapidly due to the spread and aftereffects of the
novel Covid-19 pandemic. It has many notable impacts on the global economy.
Maintaining physical as well as social distancing has become important these days
due to the spread of the disease. Digital payment contributes to our life to save
us from Covid-19. This paper focused on the impact of Covid-19 on the digital
economy, Independent variables include customer transactions, mobile payments,
card payments, UPI, wallets, NEFT, IMPS, and RTGS. Dependent variables are
Corona cases and Corona deaths. For the purpose of the study data from Jan 2020 to
Dec 2021 has been analyzed to run the multiple regression to find out whether the
result of Covid-19 new cases has a significant impact on mobile payment and UPI,
the other variables are insignificant. The outcome of death cases has a significant
impact on mobile payment and UPI. The digital economy is the center of today’s
economic development. This paper amplifies the adoption of a new technology of
digital payment to overcome the impact of Covid-19 throughout the world.

M. Irfan
NSB Academy Business School, Bangalore, India
e-mail: [email protected]
Z. Hossen Shaikh (B)
College of Business Administration, Department of Finance and Accounting, Kingdom
University, Riffa, Bahrain
e-mail: [email protected]
R. Singh
Department of Accounting and Economics, College of Business and Finance, Ahlia University,
Manama, Bahrain
e-mail: [email protected]
A. Sarea
The Assam Royal Global University, Surat, India
e-mail: [email protected]
S. Dhimmar
Research Scholar, SchoolofBusiness, Auro University, Surat, Gujarat, India
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 419
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_31
420 M. Irfan et al.

Keywords Covid-19 · Digital system · Indian economy

JEL Classifications D24 · E22 · E42 · F38 · L86

1 Introduction

In the course of human history, the COVID 19 pandemic is an unpredicted crisis. It has
a significant impact on economic activities. It made human life at risk. It is one of the
biggest crises even compare to the 2008 global financial crisis. The virus firstly noted
in Wuhan the city of China in December 2019 [22]. The global economic activity
disrupts due to this epidemic. The recent crisis is making unprecedented stress on indi-
viduals, governments, markets, and businesses (Economic Times, 2020). Looking at
the starting scenario of this pandemic all the nations implemented lockdowns and
close the activities, which enable large human interaction and gatherings [12]. The
pandemic lead world as a catalyst for change on social, economic, corporate as well
as personal level. At the disruption from novel Covid-19, it is clear that people do
not have any option except digitalization [20].
The Covid-19 impact on digital payment has declined in the business of airlines,
tourism, hospitality, hotels, entertainment, e- commerce (non-essentials), and restau-
rant [15]. As we witnessed that Covid-19 is a bitter toll of world economy. Even
though it has untapped opportunities in the different sectors of the economy. Glob-
ally, the work from home (WFH), online teaching, online shopping, and online meet-
ings have developed in the short scan of time. Covid-19 has accelerated the digital
financial services not only in India but also in world. National Payments Corpora-
tion of India (NPCI) has played important role in the emergence of digital payment
ecosystem in India. To launching the digital platform like, UPI, Bharat bills pay,
IMPS, ETC (Electronic Toll collection) [16]. Many people around the globe are being
forced to adopt digital things to deal with this situation. Based on Prime Minister
Narendra Modi, ‘Atmanirbhar Bharat’ Yojana government promotes the country to
build technology-driven systems (Money control, 2020). The crisis has made it very
clear that social distancing and work from home turn out to be today’s realitie [8].
The statement given by Harshil Mathur, the CEO of a payment gateway, “The lock-
down brought upon digital awareness in Tier 2 and 3 geographies as well, with bill
payments through digital channels seeing a 93% increase overall. This is in spite
of Tier 2 and 3 customers preferring to pay bills offline through Kirana shops etc.
which have now moved to digital methods of payments,” [15]. Ambarish Kenghe,
Managing Director of Google Pay stated, “The pandemic has done more to digitizing
payments in India. Because of COVID, we have seen five years of progress happen
in just five months” [14].
The Covid-19 pandemic confirmed that businesses have to continue their
operations in a challenging situation and adapting to this new digital world. India
supplements twelve new online education channel Direct to Home. The government
of India also established many programs to boost the progress of new solutions
for collaboration, video conferencing, telework, etc. (Digitalization, 2020). “The
Does COVID-19 Have a Significant Impact on Digital Finance … 421

Reserve Bank of India will soon treat all payment aggregators as regulated entities
under the Payment and Settlement Systems Act 2007 under its direct supervision,
bringing in tighter regulations for the country’s digital payment industry. The central
bank has also demanded mandatory compliance on technology and cyber-security
requirements” [14].
Digital financial services were especially helpful to humanity during the
COVID19 era and helped ensure its existence. The COVID 19 incident occurred
when the entire country was placed on complete lockdown [20]. It is true that digi-
talization will highly contribute to the development of the economy. In this paper,
we focused on the effect of the COVID-19 pandemic and digital economy evidence
from India. A key method of reducing the detrimental effects of digital finance is
through effective financial regulation, which diminishes the U-shaped relationship
between it and the digital transformation of the agriculture [13].
The study is significant because digital finance is where society wants to regularly
conduct financial transactions in the digital realm. In the Fintech sector, there are
numerous startups that are also progressing to the next level. Google Pay and PayTM
have raised awareness of Fintech and digital finance in society. QR codes are available
to pay for the services anywhere.

2 Literature Review

Digital finance positively significant affected by the Covid-19 crisis, people are ready
to do the payment digitally to avoid go to the mass places [2]. Digital payment is
accessed and utilised make it possible by the through of mobile. People are ready
to use the digital platform for the payment [3]. In recent years, many customers
already adopted payments online or through mobile applications. Still, there are
customers, those who do not wants to do the digital payment, due to lack knowledge,
and awareness of digital usage they denied to go digital.
The situation of COVID 19 willingly/unwillingly forced them to move towards
digital payments [19]. In the lockdown period, the proportion of internet users
increased from 40 to 100% compared to pre-lockdown levels. Almost all people
using online- based services to interact and communicate. The usage of services
like Zoom, Google Meet is tremendously increased. The new digitalize world force
people to work from home [10]. The lockdown period records 95% of total UPI
transactions, which includes convenience stores, supermarket, groceries, etc. Further
the 95 Banks actively participating in AePS. The application of Bhim app down-
loads is 1, 25,274. E-commerce also notices high positive trends. The word digital
money gain popularity in this new normal world. The bank currency and paper
notes term as dirty money because of virus spread assumption. “The payment and
settlement systems recorded robust growth during 2019–20, growing by 44.1% in
terms of volume on top of the expansion by 55.8% in the previous year. In terms
of value, it increased by 5.4% on top of 14.2% in the previous year, mainly due to
lower growth observed in the large value system, viz., Real Time Gross Settlement
422 M. Irfan et al.

(RTGS) system. The share of digital transactions in the total volume of non-cash
retail payments increased to 97.0% during 2019–20, up from 95.4% in the previous
year. However, the extended period of lockdown arising on account of the COVI D19
pandemic resulted in subdued economic activity and lower discretionary payments,
thereby leading to a fall in digital transactions” (RBI Report, 2020). In India, govern-
ment promote digital payment services and encourage the customer to make digital
payments [11]. “Dilip Asbe, Managing director and CEO of the National Payments
Corporation of India (NPCI) has also urged people to increase the use of digital
payments in order to make payments contactless” [16]. The government support
on digital payments system increases contactless payments. Further, it shows that
the perceived risk from Covid-19 spread and perceived usefulness of using digital
payment methods are related to each other [4, 18].
Most of the countries flattened their COVID-19 cases curve by adopting a digital
platform. It noted that it reduces the mortality rates across the globe [17]. Moreover,
digital methods are becoming the backbone of public-health response to Covid-19
crises around the globe. The digital response of millions of people advantages large
online datasets, advancements in machine learning and natural language processing,
billions of mobile phones, connected gadgets, and reasonably cheap computing
resources, contribute to economic development [6]. Further, the digital platform can
also improve human health education and communication. In many countries, the
government has collaborated with a social media platform like WhatsApp, Facebook,
and Twitter. These applications inform people and give accurate information about
the Covid-19 crisis [21]. The digital payment system help world to reduce human
touch, which ultimately decreases the spread of Covid-19 [7]. Data protection and
security became key concerns for everyone in this crisis. The digital divide is more
useful in developing countries because o f cultural and social issues [9]. The use of
digital payment methods helps in the development of the country as well as fruitful in
COVID 19 situation but at the same time assures the protection of the consumer is also
became necessary [5]. The government also monitors infected people and traces their
contacts using mobile apps, which also raised the concern of people’s privacy [1].

3 Research Methodology

3.1 Data

A strong methodology is the backbone of the research. The research methodology

includes the way the researcher gathers, evaluates, and interprets the data in the study.
The variable taken in the study are “Covid new cases, Covid death cases”, Customer
Transaction, Mobile Payments, Card Payments, UPI, wallets, NEFT, IMPS, and
RTGS. The study is secondary in nature. The data of variables obtained from “India
and collected from the Oxford Martin Programme on Global Development, which is
a collaborative database of the University of Oxford researchers and Global Change
Does COVID-19 Have a Significant Impact on Digital Finance … 423

Data Lab (Our World in Data Organisation, 2020)”. The monthly statistics of selected
digital payment gateways were collected from the RBI website (RBI Bulletin, 2020).
The period of gathered data is from Jan 2020 to Dec 2021. The collected data analyzed
with multiple regression analyses.

3.2 Model Development

The below-mentioned picture gives a more clear idea about the independent and
dependent variable used in the study. The dependent variable consists of “Covid
new cases and Covid death cases”. The independent variable includes customer
transactions, mobile payments, card payments, UPI, wallets, NEFT, IMPS, and RTGS
(Fig. 1).
Table 1, shows all the variables taken in the study. The attributes of variables are
also given which help in the customization of writing variables. The last column
in the table also gives theory judgement of correlation of various selected vari-
ables. It is drawn from the table that Corona New cases, Corona Death case, Mobile
Payments, Unified Payments Interface, National Electronic Funds Transfer, Imme-
diate Payment Service has shown a positive correlation. The Customer Transactions,
Card Payments, Wallets, Real-time gross settlement systems have shown negative
correlation.

IMPS RTGS

NEFT Cx-Txn

Cov-NC/Cov-DC

Wallets
Mob-
PMT

UPI Card-
PMT

Fig. 1 Model of digital economic and Covid-19 indicators. Source Authors estimated
424 M. Irfan et al.

Table 1 Indicators of digital economics and Covid-19

Variable symbol Variables Attribute of variables Theory judgment
Y1 Corona New cases Cov-NC Positive correlation
Y2 Corona Death case Cov-DC Positive correlation
X1 Customer Transactions Cx-Txn Negative correlation
X2 Mobile Payments Mob-PMT Positive correlation
X3 Card Payments Card-PMT Negative correlation
X4 Unified Payments Interface UPI Positive correlation
X5 Wallets Wallets Negative correlation
X6 National Electronic Funds NEFT Positive correlation
Transfer
X7 Immediate Payment IMPS Positive correlation
Service
X8 Real-time gross settlement RTGS Negative correlation
systems
Source Authors estimated

3.3 Methods

The study used “multiple linear regression equation” as follows:

Y1 =α + β1 ∗ Cx − Txn + β2 ∗ Mob − PMT

+ β3 ∗ Card − PMT + β4 ∗ UPI + β5 ∗ Wallets
+ β6 ∗ NEFT + β7 ∗ IMPS + β8 ∗ RTGS + ε (1)

Y2 =α + β1 ∗ Cx − Txn + β2 ∗ Mob − PMT

+ β3 ∗ Card − PMT + β4 ∗ UPI + β5 ∗ Wallets
+ β6 ∗ NEFT + β7 ∗ IMPS + β8 ∗ RTGS + ε (2)

Model Fit: Variables Are Set

Y1 = α + β1 ∗ Mob − PMT + β2 ∗ UPI + ε (3)

Y2 = α + β1 ∗ Mob − PMT + β2 ∗ UPI + ε (4)

For Accomplishment of the Objectives of the Study, the Following Null

Hypotheses Are Set
• H01 = Customer Transaction has no positive effect on Cov-NC/Cov-DC.
Does COVID-19 Have a Significant Impact on Digital Finance … 425

• H02 = Mobile Payment has no positive effect on Cov-NC/Cov-DC

• H03 = Card Payment has no positive effect on Cov-NC/Cov-DC
• H04 = UPI has no positive effect on Cov-NC/Cov-DC
• H05 = Wallet has no positive effect on Cov-NC/Cov-DC
• H06 = NEFT has no positive effect on Cov-NC/Cov-DC
• H07 = IMPS has no positive effect on Cov-NC/Cov-DC
• H08 = RTGS has no positive effect on Cov-NC/Cov-DC.

4 Data Analysis and Interpretation

This part of the research shows the analysis of the research. The tables reflect on the
results of the study. This section lays down the major results and analysis whether
“Covid new cases and Covid death cases” in India has a significant relation with
customer transaction, mobile payments, card payments, UPI, wallets, NEFT, IMPS
and RTGS.
Table 2, revealed that the correlation between Covid-19 indicators and digital
payment gateways. It signifies that the perfect positive correlation relationship
between variables like wallets, card payments, RTGC, and customer transaction.
The strongly positive relationship depicts between Covid-19 death cases, Covid-19
new cases along with mobile payments, UPI, NEFT, and IMPS. UPI stated that posi-
tive relationship with Covid-19 new cases- Covid-19 death cases-mobile payments,
wallets with customer transaction, NEFT shows that positive relation with customer
transaction, mobile payments, card payments, wallets. IMPS stated that positive rela-
tionship with customer transaction, mobile payments, card payments, UPI, Wallets,
NEFT.
The moderate positive relationship identified between variables are mobile
payments with customer transaction, card payments with mobile payments, UPI
with card payments, wallets with mobile payments, UPI, NEFT with UPI, IMPS
with Covid-19 new cases- Covid-19 death cases, RTGS with mobile payments. The
weak positive relationship explained between the variables of UPI with customer,
NEFT with Covid-19 new cases and Covid-19 death cases, RTGS with UPI. Further,
the Covid-19 new cases, Covid-19 death cases show a weak negative relationship
with the customer transaction, card payments, wallets, and RTGS.
Table 3, declared the relationship between dependent and independent vari-
able. The dependent variable is Covid-19 new cases and independent variables are
customer transaction, mobile payments, card payments, UPI, wallets, NEFT, IMPS
and RTGS.
Table 3, declared the value of F-count, R square, Durbin Watson statistic, Beta, T-
count and significant value. R squared (r2 ), the Coefficient of Determination. It gives
the percentage of the overall variation in y that the regression model can account for.
When r2 is 0.65, it suggests that the x-values can account for 65% of the variation in
y-values around the mean. It also displays the Durbin Watson statistic. The DW test
is the autocorrelation test in regression analysis. Here, James Durbin and Geoffrey
 426

Table 2 Correlation of digital economic and Covid-19 indicators

Variables Cov-NC Cov-DC Cx-Txn Mob-PMT Card-PMT UPI Wallets NEFT IMPS RTGS
Cov-NC 1
Cov-DC 0.97 1
Cx-Txn –0.20 −0.23 1
Mob-PMT 0.69 0.72 0.38 1
Card-PMT −0.03 −0.09 0.67 0.58 1
UPI 0.80 0.82 0.16 0.97 0.44 1
Wallets −0.02 −0.08 0.68 0.58 1.00 0.45 1
NEFT 0.16 0.12 0.92 0.68 0.73 0.50 0.73 1
IMPS 0.38 0.36 0.61 0.89 0.88 0.80 0.88 0.82 1
RTGS −0.19 −0.23 1.00 0.38 0.68 0.16 0.68 0.93 0.62 1
Source Authors estimated
M. Irfan et al.
Does COVID-19 Have a Significant Impact on Digital Finance … 427

Table 3 Covid19 new cases and digital economics indicators

Dependent Independent Beta T- Count Sign Explanation
variable variable
Covid-NC Constant 2,342,389 2.4068
CT −0.327 −1.493 0.196 NS
Mob-PMT 5.70 2.86 0.029 S
CP −0.311 −1.197 0.285 NS
UPI 11.99 3.5659 0.015 S
Wallets −0.34 −1.379 0.226 NS
NEFT −0.269 −0.973 0.375 NS
IMPS −0.479 −1.145 0.304 NS
RTGS −0.321 −1.456 0.205 NS
F-Count 11.30 0.015 S
R Square 0.65
Durbin Watson 1.94
Sources Authors estimated

Watson (Durbin-Watson Statistic) value is 1.94 suggest that there is no autocorre-

lation exist between the variables. The variable mobile payments and UPI have a
significant value of 0.029, 0.015 respectively. This value is less than the significant
level of 0.05, which indicates that the author rejects the null hypothesis for mobile
payments and UPI. The other variable customer transaction, card payments, wallets,
NEFT, IMPS, RTGS have insignificant values which are greater than 5% (H1 >
0.196), (H3 > 0.285), (H5 > 0.226), (H6 > 0.375), (H7 > 0.304), (H8 > 0.205). This
variable has values more than 0.05 significance level that revealed that authors “reject
the null hypothesis and accept the alternative hypothesis, which conclude that there
is a significant relationship” between Covid-NC with mobile payments and UPI and
there is insignificant relationship between Covid-NC with variable includes customer
transaction, card payments, wallets, NEFT, IMPS and RTGS.
Table 4, When r2 is 0.65, it suggests that the x-values can account for 65% of
the variation in y-values around the mean. The value of Durbin Watson statistic
is 1.94, which shows the positive autocorrelation between a dependent variable and
independent variable. Further, the data declared the significant P-value of the relation
between Covid-NC with the Mobile Payments and UPI. The significant value for
Mobile Payments and UPI is (H1 < 0.029), (H1 < 0.015) respectively. In table p-
value, it is less than 0.05 indicates that the author rejects the null hypothesis. This
means there is a significant relationship between Covid-NC with Mobile Payments
and UPI.
Table 5, explore the association between Covid-19 and digital indicators in regres-
sion analyses. The dependent variable is Covid-19 death cases and independent vari-
able consist of the customer transaction, mobile payments, card payments, UPI,
wallets, NEFT, IMPS and RTGS. Table 5, shows that the value of F-count, R square,
428 M. Irfan et al.

Table 4 Significant results of Covid19 new cases and digital economics indicators
Dependent Independent Beta T-Count Sign Explanation
variable variable
Covid-NC Constant 2,342,389 2.40677 0.053 Significant
Mob-PMT 5.70 2.86005 0.029 Significant
UPI 11.99 3.56587 0.015 Significant
F-Count 11.30 0.015 Significant
R Square 0.65
Durbin Watson 1.94
Sources Authors estimated

Table 5 Covid19 death cases and digital economics indicators

Dependent Independent variable Beta T−Count Sign Explanation
variable
Covid-DC Constant 1,366,702 2.78 0.03
Cx-Txn −0.30 −1.71 0.15 NS
Mob-PMT 3.00 3.35 0.02 S
Card-PMT −0.38 −2.20 0.08 NS
UPI 6.41 4.37 0.00 S
Wallets −0.39 −2.33 0.07 NS
NEFT −0.27 −1.24 0.27 NS
IMPS −0.59 −2.05 0.10 NS
RTGS −0.29 −1.63 0.16 NS
F-Count 19.10 0.00 S
R Square 0.76
Durbin Watson 1.98
Sources Authors estimated

Durbin Watson statistic, Beta, T- count and significant value. As per regression model
the Coefficient of Determination (R squared-r2 = 0.76) give the percentage of the
total variation in y. This value confirms that 76% of the variation of y-values around
the mean is explained by the x- values. Further, Durbin-Watson statistic used to find
out, there is no autocorrelation between variables. The value of DW is 1.98 to recom-
mend. It is revealed that variable mobile payments and UPI have a significant value
0.02, 0.00 respectively. In this case, rejects the null hypothesis for mobile payments
(H2) and UPI (H4) because the “p-value is less than the significant level of 0.05”.
The variable customer transaction, card payments, wallets, NEFT, IMPS, RTGS
have significant values greater than 5% (H1 > 0.15), (H3 > 0.08), (H5 > 0.07), (H6
> 0.27), (H7 > 0.10), (H8 > 0.16). This value declared that the author fails to reject
the null hypothesis because variables have values more than 0.05 significant level.
The analyses conclude that Covid-DC with mobile payments and UPI has shown a
Does COVID-19 Have a Significant Impact on Digital Finance … 429

significant relationship with each other. The variables customer transaction, mobile
payments, card payments, UPI, wallets, NEFT, IMPS and RTGS gave a result that
there is no significant relationship with Covid-DC.
Table 6, The r2 value is 0.76 which tell that “76% of the variation of y-values
around the mean is explained by the x-values”. The Durbin-Watson autocorrelation
regression model has the value of 1.98, which is called no-autocorrelation between
variables. Additionally, the Table 6 gives the significant P-value of the relationship
between dependent and independent variables. The Mobile Payments and UPI has
significant value(H1 < 0.015), (H1 < 0.004) respectively. The value is less than 0.05
declared the rejection of the null hypothesis. It concludes that Mobile Payments and
UPI has a significant relationship with Covid death cases Fig. 2.
The charts give the result of the multiple regression model. the study covered
the variables Covid new cases, Covid death cases, customer transaction, mobile
payments, card payments, UPI, wallets, NEFT, IMPS and RTGS. This chart visu-
alized that only two variable shows a significant relation with Covid-NC and
Covid-DC.

Table 6 Significant results of Covid19 death cases and digital economics indicators
Dependent Independent Beta T-Count Sign Explanation
variable variable
Covid-DC Constant 1,366,702 2.784718 0.031798 Significant
Mob-PMT 2.999807 3.346484 0.015487 Significant
UPI 6.408082 4.36986 0.00472 Significant
F-Count 19.09567 0.00472 Significant
R Square 0.760915
Durbin Watson 1.98
Sources Authors estimated

Mob-
PMT
Cov-NC
Cov-DC

UPI

Fig. 2 Model-fit of corona virus and digital economic. Sources Authors estimated
430 M. Irfan et al.

5 Conclusion

India’s digital economy is examined in the paper in light of the Covid-19 outbreak.
The variables covered for this research are customer transactions, mobile payments,
card payments, UPI, wallets, NEFT, IMPS, and RTGS. The impact of Covid-19
on variables identified by applying the statistical model of multiple regression.
According to data, it reveals that only two variables Mobile Payments and UPI have
a significant relationship with Covid-NC and Covid-DC. It concludes that usage of
mobile payments and UPI increased with increment in the Covid-19 new case as
well as death cases. The research clear on the point that the digital economy gives
positive response during Covid-19. The impact is minimal in a few digital payments
gateway, but it is positive. Finally, the result has shown the positive regression line
from mobile payments & UPI with Covid-19 new and death cases tell that due to the
spread of Covid-19, people strongly follows government rule of social distancing.
They have done all the possible work from their home through a mobile application
or with digital gadgets. At last, just like every coin has two sides, does Covid 19. On
the one side, Covid-19 pandemic disrupts the whole economy another side, it is also
true that it will lead our country people towards digital management.
This study shows how digital finance may be used to increase energy efficiency,
and it encourages policymakers to use this technology to advance ecological gover-
nance and achieve high-quality economic development. The depth of use, level of
digitalization, and scope of coverage of cities are the three main factors that determine
how digital finance affects green innovation in cities.

6 Limitations

The sufficient digital transaction data is not available on the RBI website. So,
collecting data from an authentic platform is very challenging. Yet, the informa-
tion is not sufficient to declare any conclusion. The study is limited to a short period.
The interpretation is based on one statistical method. It can be justified by using
different approaches. The Covid 19 pandemic is still going on, so the results will
vary in the future.

7 Future Implications

The digital economy is created by intellectual people. It provides ease of every process
and lots of opportunities and challenges. The Union Budget of the year 2021circulates
a soft copy of budget to parliament members. It is stat that the government of India
immensely promoting digital platforms. As a researcher, we have several areas to
focus in the digital era. The present study suggests that in the future if long-term
Does COVID-19 Have a Significant Impact on Digital Finance … 431

investigations of the Covid-19 pandemic with digital economic indicators give a

significant adequate judgment. Also, the daily digital transaction data could be giving
more accurate results. Another statistical model can be applying and compare the
analyses for a more satisfactory outcome.
The different relationship might be established, by increases the significant level
from 5 to 10%. Another important area of research is the emotional perspective of
people towards digital platforms. It is important to study sentiment of the people
regarding digital gadgets during Covid 19. The government response on digital
things during Covid 19 outbreak will be studied. The detailed elaboration on the
consequences of being digital also covers in further study. Additionally, health is
wealth—according to statement, it would be further incorporated digital platforms
impact on people health. The Covid 19 also related to the health of the people. Due to
the spread of the virus people used digital platforms but using digital platforms also
ha s its consequences regarding health. It is like a vicious circle that needs to cover
in future reserch. The Covid 19 impacted on whole education system. The children
between the age of 5 to 15 years teaching by a teacher through an online application.
It might have two effects, they are learning and become intelligent or making their
parents fool by playing games, etc.
This is a big issue that can be a important for a researcher to focus on because
the child of today will be the future of country tomorrow. The impacts on the mind
of students and teachers will be analyzed. How the education system evolved with
time is also described in further research. Moreover, in the digital economy the issue
of data piracy also arises that highlighted another great part of the research for the
safety of the digital consumer. The protection of people regarding sharing of digital
information is also very important in future work. Finally, it would end up saying
that there are lots of opportunities in the area of research. The surge of the digital era
in the situation like Covid 19 opens the gates of much new upcoming research work.
Now, it is the task of the researcher to solve the problem faced by the people in the
country.

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Literature Review for Educational Data
Mining Systems—Fahad Bin Sultan
University Case Study

Abdullah M. Barakeh , Mohammad A. Mezher , and Banan A. Alharbi

Abstract The advancement of the learning environment is significantly facilitated

by the critical role played by Educational Data Mining through its contributions of
state-of-the-art methods, techniques, and applications. The utilization of machine
learning (ML) and data mining techniques in exploring and examining educational
data has yielded valuable tools for comprehending the student learning environment
in recent times. Contemporary academic institutions operate within a context that is
marked by intense competition and intricacy. The examination of performance, the
provision of superior education, the formulation of tactics for ascertaining the apti-
tudes of learners, and the identification of future measures are among the predominant
difficulties encountered by universities. The focus of the prediction process has been
emphasized on analyzing the performance of students using a multitude of parame-
ters. This paper presents a significant contribution in the form of a newly introduced
dataset containing student performance data pertaining to the Fairbanks School of
Business and Public Administration. This dataset incorporates a range of parame-
ters, including demographic information, academic history, and performance indi-
cators. Utilizing this dataset, we conducted a comprehensive examination of FBSU
understudy performance and applied different machine learning and information
mining methods, including Support Vector Machine, Choice Woodland, Arbitrary
Timberlands, and Calculated Relapse, for classification. Our examination gives bits
of knowledge into the variables that altogether influence understudy execution, such
as socioeconomics and scholastic foundation. Our findings can inform procedures
for assessing student performance and for improving teaching and learning processes
in academic institutions.

A. M. Barakeh (B) · M. A. Mezher · B. A. Alharbi

Fahad Bin Sultan University, Tabuk, Saudi Arabia
e-mail: [email protected]
M. A. Mezher
e-mail: [email protected]
B. A. Alharbi
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 435
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_32
436 A. M. Barakeh et al.

1 Introduction

Learning Management System (LMS) for educational purposes has increased rapidly,
particularly in higher education institutions. LMSs are web applications that provide
a wide range of instruments and tools which ease and facilitate the educational
process. The tools include materials, online exams, quizzes, assignments, attendance,
and assigning grades. On the practical side, instructors can use this instrument to
furnish timely student feedback and develop proper interventions. All procedures,
functions, and steps in the e-learning system are recorded and stored automatically,
which officials could examine to assess the students’ performance. Examining and
foretelling student grades using psychometric techniques (e.g., tests) are known as
knowledge assessment methods, which theorists originally proposed as static data
analysis tools. Very developed ML models are dependent on temporal modeling or
factor analysis.
Researchers with IT and computer engineering backgrounds are concerned with
diagnosing students’ performance and their abilities to utilize those methods [11, 34].
Most of the ML methods and strategies have been utilized in developing adaptive
educational atmospheres, which look to detect students’ GPAs and impressive knowl-
edge about students’ performance. Educational data mining is an emerging spot of
study and analysis that implicates extracting styles and anomalies from educational
databases to improve learners’ awareness and abilities, educational performance,
and examination of students’ learning process. Evaluating students’ performance is
a challenging process that cannot be reduced to grading [5, 27].
The proposed causes that impact student performance at FBSU are their ability to
communicate properly with colleagues and lecturers, engagement, and collaborative
learning. Education is no longer a one-time event but a lifelong venture because
those working lives are very long and fast-changing. Therefore, people are required
to uphold learning after their graduation. This study uses deep learning algorithms
to assess learners’ progress in any scholarly setting (university, school).
In the learning analytics and educational data mining communities, part of the
student performance prediction problem has been explored in terms of the student
dropout and completion, forecast problem, which is a significant subclass issue of
the student performance prediction problem. An example of the earliest predictive
analytics applications in higher education is the course signals system at Purdue
University.
Nevertheless, educational organizations and institutions have recorded the manner
of building their models, integrating them into LMSs, and how they are executed.
Fortunately, several empirical studies were conducted in this field [2, 25–27, 33–
36] conducted a study that examined students’ click frequencies and time in the
LMS with moderate accuracy and their relations with the final course assessment.
Moreover, [3] examined student online learning behaviors and demographic infor-
mation that were extracted from the Massive Open Online Courses (MOOCs). The
researchers indicated that student clickstream actions were strongly related with
academic success.
Literature Review for Educational Data Mining Systems—Fahad Bin … 437

2 Background and Significance

2.1 Preprocessing ML

Preprocessing data for ML models is a substantial skill for any data scientist or ML
engineer. It is a procedure for transferring undeveloped plain data into structured ones.
In other words, when data is collected from several recourses, it is gathered properly
for investigation. The data format must be proper to obtain the most promising results
from the generated model in ML projects. Specific machine learning models require
specific data format such as the Random Forest (RF) method which does not identify
invalid values. As a result, to run the RF algorithm, null values must be handled in
the original unrefined data collection. Another point is that the data set should be
organized so that many ML and DL algorithms can be trained with the best selection.

2.2 Cleaning Data

The preprocessing of data is an essential aspect of each machine learning (ML)

project. Numerous statistical analyses and data visualization methods can be
employed to explore tabulated data and identify possible data cleansing procedures.
Prior to delving into more sophisticated techniques, it is imperative to execute prelim-
inary data-cleaning procedures for any machine learning (ML) undertaking. These
concepts are often underestimated by experienced machine learning practitioners
due to their apparent simplicity. Notwithstanding their significance, the failure or
production of excessively favorable performance outcomes of models should not
be overlooked. In this paper, the essential techniques for performing data-cleaning
operations will be elucidated.

2.3 Missing Data

Disparities are frequently present in empirical data. Numerous factors can contribute
to the presence of missing data, such as encompassing instances of unrecorded obser-
vational information or deliberate manipulation of data. The loss of data is of utmost
significance as numerous machine learning algorithms exhibit limited capacity in
dealing with incomplete data. The present study showcases the utilization of Python
for the effective handling of lost data in the context of machine learning.
438 A. M. Barakeh et al.

2.4 Dimensional Reduction

The process of dimensionality reduction refers to a collection of techniques that

serve to reduce the number of variables contained within a given dataset. The inclu-
sion of additional input features in a predictive modeling task tends to increase the
complexity of the model, typically recognized as the curse of dimensionality. High-
dimensional statistical analysis and dimensionality reduction methods are frequently
employed to facilitate data visualization. However, these approaches can be employed
in practical machine learning scenarios to streamline the processing of a classification
or regression dataset and enhance the suitability of a predictive model. This article
aims to elucidate the concept of dimensionality reduction in machine learning.

3 Modeling

3.1 Logistic Regression (LR)

The LR machine learning classification is a technique that is commonly employed

in predicting the probability of an event associated with a categorical dependent
variable. The dependent variable in LR is a binary variable containing data coded as
1 (yes, and success) or 0. (No, and failure). In other words, the LR model predicts
P(Y = 1) as a function of X.

3.2 Random Forest (RF)

The random forest algorithm is a type of ensemble machine learning method.

Due to its remarkable performance in diverse regression and classification predic-
tive modeling tasks, the machine learning approach in question is one of the
most prevalent and extensively employed techniques [41, 42]. Furthermore, the
process is uncomplicated in nature as it solely entails a limited number of essential
hyperparameters and optimal algorithms for personalizing said hyperparameters.

3.3 Decision Forest (DF)

A DF may be regarded as a graphical representation or layout that facilitates the

process of selecting a particular course of action or exhibiting a statistical proba-
bility in a given situation. Each branch of the decision forest embodies a prospective
decision, outcome, or response. The terminal branches of the tree depict the outcomes
stemming from a specific course of action.
Literature Review for Educational Data Mining Systems—Fahad Bin … 439

3.4 Support Vector Machine (SVM)

Support Vector Machine (SVM) is a machine learning algorithm that is guided by

supervised learning principles and has the ability to conduct classification, regres-
sion, as well as outlier detection tasks [10]. The linear Support Vector Machine
(SVM) classifier discerns between two classes via the use of a linear boundary. In
accordance with standard classification methodology, data points located on one side
will be designated as belonging to one particular class, whereas those situated on the
opposite side will be assigned to a distinct, second class. Although the statement may
appear facile, the selection of a line becomes a daunting task since there exists an
infinite array of possibilities. The present discourse pertains to the utilization of the
LSVM algorithm in a given scenario [6]. The LSVM algorithm selects a discrimi-
nant hyperplane that separates two classes while maintaining maximal distance from
the closest data points. Within the context of Support Vector Machines (SVMs), the
designation “support vector” pertains to a pair of position vectors originating from
the origin and extending toward the points composing the decision boundary.
A comparative analysis of machine learning algorithms can be conducted to deter-
mine their relative efficacy in predicting student performance outcomes. Insufficient
investigation regarding alternative methods of forecasting and crucial determinants
of academic excellence among students presents a major challenge, particularly in
the MENA region. The capacity to forecast student performance in the educational
field is significant, as it can aid in the enhancement of their academic progression by
analyzing their present standing. The implementation of a discerning framework of
educational data mining is a crucial step in the application of data mining principles
and techniques to the field of education.

4 Literature Review

The utility of the data mining technique is multifarious and extends across various
domains of the public and private sectors. Several industries employ data mining tech-
niques to extract valuable information from vast databases in order to reduce costs,
enhance research, and increase sales. Such industries include banking, medicine,
insurance, retailing, and Educational Data Mining (EDM) [14–16]. The advent
of advanced computer technology has led to simplified procedures for gathering,
retaining, and manipulating data. The utilization of data mining is prominently advan-
tageous in the discipline of educational data mining (EDM) [4, 37–40]. The field of
educational data mining is currently in the process of emerging as a discipline for the
purpose of extracting informative insights from a vast range of academic databases.
The primary objective of the application of Educational Data Mining (EDM) is
to discern patterns within educational data, with the aim of advancing educational
qualifications.
440 A. M. Barakeh et al.

Due to the study’s scope, related studies proposed methods for solving student
performance. Reference [1] discussed data analysis models like ANN farthest
first and DT classification. Reference [5] proposed Kmean clustering. Uses initial
centroids, fewer iterations, longer time between them. Reference [6] proposed a
privacy-preserving K-means clustering algorithm for distinct sites with distinct
features for a shared set of entities, over vertically partitioned data. Reference [7]
used K-means clustering to predict student achievement.
Assessment criteria for students, such as quizzes and exams, should be communi-
cated by the class adviser before the final test. This research can help lower dropout
rates and improve student performance. Reference [8] showed how data mining
can analyze and determine the significance of categorization test results. Mining
tools, including classification, clustering, association rules, and NN, can be accessed
through an open-tool that can connect or be imported from Java code. Reference [9]
Evaluated classification algorithms; Decision trees, SVM, and Naïve Bayes. Naïve
Bayes had 77% accuracy, outperforming the others. Reference [10] predicted student
performance online. SPDN was used to predict student performance in a course using
online learning records and network logs. They reported an accuracy of 73.51%.
Reference [11] propose using an online pool and student features to predict perfor-
mance. Reference [12] predicted academic achievement in higher education using
Moodle data. The study tested whether Moodle data can predict student success
in courses. Classifier 65% accurate on course data, 92.2% on passing prediction.
The initial six weeks’ data was poor, requiring an extension of collection. Refer-
ence [13], a report analyzed online data to assess the impact of digital technologies
on e-learning success. Significant indicators of achievement across courses were
identified. Students’ achievement was assessed with Social Network Analysis, K-
Means clustering, and Multiple Linear Regression. Results revealed a strong link
between performance and use of digital materials from the e-learning platform [5].
Reference [14] introduced a new approach for teaching educational data mining tech-
niques on student datasets. The researcher used data mining techniques to analyze
student data and found end semester performance. Decision trees predict program
outcomes; Association rule mining studies students’ capability were used in this
regard. These algorithms were used also to forecast and analyze performance, while
visual analytics illustrate students’ analysis. Reference [15] studied high school
student failure causes using data mining and clustering analysis. Data was split into
three clusters and analyzed to identify factors affecting student failure and relation-
ships. The survey results are presented, factoring in efforts to reduce failure causes.
Reference [16] explained the significance of predicting academic performance and
assessing students early in each semester. They utilized data mining classification
to group students by their initial course performance. The teacher can predict final
attainment using a Neuro-Fuzzy classifier on first-semester data. Reference [17]
examined how academic accomplishment could be anticipated utilizing Moodle
information from an encourage instruction environment. Educational providers are
progressively being pushed to utilize their data warehouses to improve their students’
instruction and learning comes about. A well-known source of this data is learning
administration frameworks, which permit providers to manage a virtual stage or
Literature Review for Educational Data Mining Systems—Fahad Bin … 441

region where understudies may take an interest in learning materials and exercises.
This inquiry pointed to deciding if information from the learning administration
framework Moodle can be utilized to estimate students’ scholastic accomplishment
in a mixed learning environment. All through the course, the discoveries have shown
that Moodle information made it doable to sensibly expect students’ alphabetic grades
and whether they would pass or come up short. All calculations performed altogether
better than the no-information rate on these errands, with irregular woodland giving
the foremost extraordinary execution. Be that as it may, it is basic to find out whether
an understudy is at the hazard of coming up short the course early on for common-
sense purposes. Reference [18] sought to create an integrated model for analyzing
understudy information collected from e-learning frameworks to assist instructive
teach anticipate understudy execution. The thought has been displayed already by
researchers from different viewpoints. It is frequently clarified utilizing qualities such
as understudy prompting and observing.
E-learning is frequently respected as the foremost successful advanced innova-
tion in instructive settings. Reference [19] expressed that the objective is to explore
the utilize and impact of advanced innovations on an e-learning stage. The think
about was done utilizing the Moodle learning administration framework for this
reason. The data from the e-learning stage was experimentally analyzed to distinguish
critical understudy victory measurements over numerous courses. Assess students
utilizing different strategies, counting social organize examination, K-Means clus-
tering, and numerous relapse. The discoveries illustrated a significant relationship
between students’ accomplishment and their utilization of computerized directions
materials accessible by means of the e-learning stage. This considers tried the SNA
procedure, K-Means clustering, and numerous LR within the setting of e-learning.
The discoveries demonstrated that students who come to the same or proportionate
levels of accomplishment utilized comparable instructive assets.
Besides, the results indicate that all courses indicated a solid positive relationship
between the position within the arrangement and student victory. Consequently, the
results showed that the finest understudies are within the center of the organization
measured by eigenvector centrality. Moreover, it can be illustrated that the tendency
of the analyzed information appears that the understudies with comparative execution
are within the same cluster and the concentration of the utilization of assets connects
with the accomplished scores.
The LR show represents the association between independent factors, which may
be continuous, categorical, or parallel. Foreseeing variables influencing students’
scholarly execution is basic in therapeutic education. It allows for actualizing of
strong programs to play down dropouts or falling flat grades [20]. This ponders
points to make a calculated relapse demonstrate to anticipate first-year restorative
students’ execution utilizing scholastic, mental, and word-related characteristics and
learning and self-motivation strategies. A calculated relapse show for anticipating
scholarly execution among first-year restorative understudies, unequivocally recog-
nizing people at the scholastic chance, is a productive tool that empowers strong
discoveries for appropriate decision-making. Reference [21] utilized the arbitrary
timberland to anticipate students’ execution in an E-Learning environment. After
442 A. M. Barakeh et al.

preprocessing the dataset, it was sent out to the MATLAB computer program. Code
was created to apply the RF strategy and assess its adequacy in anticipating students’
scholarly accomplishment on the dataset. The show was prepared and approved
utilizing ten times cross-validation, and after that its execution was decided to employ
a perplexity framework. The inquiry about tries to decide the Irregular Woodland
classifier’s prescient exactness. The Arbitrary Timberland algorithm achieved a fore-
cast exactness of 76.9% after experimentation. Alongside expected accuracy, the
Random Forest strategy was examined on extra measurements such as exactness,
review, and F-measure. Reference [22] examined and analyzed school students’
execution utilizing classification strategies. It appears that the arbitrary woodland
calculation has the most noteworthy execution of other calculations. The accuracy
obtained by the irregular woodland calculation is 89.23%. The creator too proposes
that clustering procedures and affiliation run the show mining may offer assistance
increment execution. Reference [23] utilized SVM for the prediction of understudy
execution. The data tests were collected from the guides and understudies straight-
forwardly, and they were fed into the framework for apportioning and classifica-
tion. We executed the rules characterized within the SVM calculation to foresee the
students’ last grades. The results were obtained and checked with the initial set of
data. Reference [24] conducted an investigation in which machine learning strategies
were utilized to figure students’ academic success in engineering courses. The input
highlights included course grades from all semesters in this study, and the output
variable was exam scores. The researchers observed that SVMs are reasonable for
foreseeing a student’s progress while multilinear regression is reasonable for deter-
mining the execution of all learners in a course. Reference [25] Utilized a decision
tree for anticipating student progress in higher education institutions. This study
points to investigate and test the method of applying the decision tree calculations
with a survey for students to look for the components that influence student success
and failure. Data mining calculations, particularly choice tree algorithms, can be the
finest arrangement for anticipating students’ performance since they provide exact
results and allow the faculty and students a clear overview of their actual perfor-
mance. Based on the model results, it can be said that a few components (traits)
can affect the accuracy of the result tree and generally understudy academic execu-
tion. The attribute evaluator calculations can discover closely related questions that
negatively or positively influence students’ progress. The survey contains numerous
insignificant questions found by the data-mining calculations. Broad data sets and the
number of attributes in the data set influence the decision tree’s accuracy. The model
can be utilized by students and academic staff to choose which questions/answers will
improve scholarly performance and move forward the success of institutions. Refer-
ence [26] adapted a new model for estimating students’ academic performance by
employing a K-Means and Choice tree algorithm to diminish dropout rates and boost
understudy execution. Reference [27] employed database frameworks and decision
tree approaches to look at students’ performance. Reference [28] found that few
graduate students have the required market skills, to use machine learning tools to
measure and improve undergraduate performance. Automation of student activities
can provide insights into academics, knowledge levels, and relationships [29].
Literature Review for Educational Data Mining Systems—Fahad Bin … 443

5 Student Performance Prediction and Classification

Accurately forecasting the academic achievement of students has emerged as a

pressing priority for the majority of educational establishments and institutions.
The aforementioned aspect is of utmost importance in facilitating students who are
deemed vulnerable to negative academic outcomes by utilizing effective interven-
tion methods. Additionally, it plays a significant role in maintaining their academic
progress, while concurrently providing them with exceptional educational prospects
and enriching the academic institution’s prestige and standing. Reference [30] study
shows the ability to train and model a small dataset with high accuracy. The
study also explores finding important patterns using visualization and clustering
methods. Various machine learning techniques were used to create a precise model for
analyzing indicators. The results proved the clustering algorithm’s skill in identifying
crucial indicators in small datasets. The study found that support vector machines and
discriminant analysis are effective for training small datasets and achieving accept-
able classification performance. Reference [31] found that student performance can
be predicted with the course and LMS data, past performance, and student characteris-
tics. Using various methods like logistic regression, SVMs, DTs, ANNs, and a Naïve
Bayes Classifier (NBC), student characteristics and past performance are analyzed
to predict at-risk students in the next course. The study used various input features
and found the NBC algorithm had 85% accuracy. Reference [32] studied student
performance classification. The technique uses trained data to label unknowns. Data
includes training and testing sets. Experts label training data for classification. Classi-
fication trains and tests a model on new data by generating equations or rules from the
training dataset using an algorithm. Apply the model to new data to identify labels
and use them on test data. Reference [33] analyzed school students’ performance
and found that the random Forrest algorithm performed the best among other tech-
niques. Random Forrest algorithm accuracy is 89.23%; clustering and association
rule mining can improve performance.

6 Methodology

This study applied supervised ML algorithms to forecast students’ academic perfor-

mance using FBSU e-learning data. It involved two stages: data preprocessing
and comparison of results. Stage 2 classified commonly used algorithms per ML
technique. Figure 1 shows the proposed methodology’s deployment framework,
consisting of the three main components.

1. Data Preprocessing: this is an essential step in the data mining process. If irrel-
evant and redundant information exists or noise and unreliable data exist in the
data samples, cause knowledge discovery during the training phase generates
unexpected results. This step removes noise words such as stemming words. The
444 A. M. Barakeh et al.

Fig. 1 The class diagram of the proposed methodology

dataset was cleansed by preprocessing the student data by applying a suitable

data mining method, thus resulting in expected knowledge.
2. Dataset: The dataset was split into a training and test set of 80%-20%, respec-
tively. The training set was used to build the models, and the test set was used to
check the accuracy.
3. Models: The algorithms used in this study were RF, SVM, DF, and LR.
The presented data in Table 1 consists of a sample extracted from the FBSU
dataset. The dataset utilized in this study was comprised of 741 student records
possessing eight unique attributes, and will henceforth be referred to as the FBSU
dataset. The students were divided into various regions of Saudi Arabia on the basis
of:
• Group A: Northern Region.
• Group B: Western Region.
• Group C: Central Region.
• Group D: Southern Region.
• Group E: Eastern Region.
All students are divided based into Saudi and non-Saudi nationals. The Test Prep
Course (FYP) considers a placement test rate of over 50 as completed. Otherwise,
Exam_score (Ex) and Grade_num (GR) are used to calculate GPA.
Data preprocessing is essential for ensuring the dataset’s quality and reliability.
It includes removing irrelevant data, handling missing fields, and modifying data as
Literature Review for Educational Data Mining Systems—Fahad Bin … 445

Table 1 Dataset sample

Gen. Et. Colleges NA. FYP GPA Ex. GR.
F D Compute Not Done 99.9 44.1 90
M B Engineer Saudi None 69.8 28 81.1
F A Business Not None 83 30.3 90.6
F C Human Saudi Done 77.2 29.6 68.9
M A Engineer Not None 80.4 23 58.8
M E Engineer Saudi Done 81.7 22.2 72.7

needed. To simplify the data set, remove irrelevant variables and analyze relevant
features based on the task and goal of data mining.
In the following steps in the dataset, there are two stages first stage training (80%)
and second-stage testing (20%) data, every model (SVM, RF, DF & LR) will receive
data from testing and training after using one model as shown in Fig. 2.

Fig. 2 The proposed model

446 A. M. Barakeh et al.

7 Results and Discussion

This section evaluates the methodology and software used in the study. First, the
preliminary experiment is evaluated with automated test cases data generation.
Second, the model is evaluated. Table 2 shows the number of null values for each
attribute in the dataset.
Figure 3 shows that the students were divided into five groups based on their
academic departments at the FBSU, which was the basis for their groupings.

Table 2 Check the null value

Feature The number of null values
Gender 0
Race/ethnicity 0
Colleges 0
Nationality 0
Test preparation course 0
High_School_Gpa 0
Exam_Score 0
Grade_Num 0

Fig. 3 Visualizing the colleges

Literature Review for Educational Data Mining Systems—Fahad Bin … 447

Regarding the nationality, the participants of the study were categorized based
on the Saudi nationality. Therefore, there were Saudi and non-Saudi students as it
depicted in Fig. 4 which shows that the majority of students at FBSU were Saudi.
In Fig. 5, the number of male and female students by location and nationality may
be further broken down.

Fig. 4 Visualizing different types of nationality

Fig. 5 Comparison of
gender versus region/
nationality
448 A. M. Barakeh et al.

Figure 6 compares student registration at the university by region, nationality, and

college, revealing the total number of enrolled students.
It is noteworthy to observe, as depicted in Fig. 7, that each student who attains a
test score exceeding 50 is successful in passing the Foundation year.
The comparison of high school GPA, placement test GPA, and overall GPA among
students who have either passed or failed is presented in Fig. 8.
The dataset was partitioned into two distinct subsets, namely training and testing,
with a ratio of 80% to 20%. Eighty percent of the data samples were allocated

Fig. 6 Comparison of region and colleges

Fig. 7 Comparison of region/nationality and test preparation course

Literature Review for Educational Data Mining Systems—Fahad Bin … 449

Fig. 8 Comparison of student results

for model training, whereas the remaining 20% were utilized for the purpose of
evaluation. Furthermore, prior to the train-test split, the dataset underwent a shuf-
fling process, which facilitates the enhancement of algorithmic performance. The
performance indicators of accuracy, precision, recall, and F1-score were evaluated
in relation to each model that was trained.
The primary objective of this study is to forecast student academic performance
through the utilization of data sourced from the Student Information System (SIS).
Machine Learning has emerged as a formidable technique for analyzing data by
leveraging cutting-edge algorithms. Following the completion of pre-processing
procedures, data summarization, and exclusion of null values, the subsequent phase
entailed the application of machine learning-based modeling on the suitably prepared
dataset. To facilitate the development of the models, the dataset was partitioned into
distinct train and test sets. The models’ performance was evaluated in an unbiased
manner by assessing them on data that was not utilized in the training process.
LR could be a machine learning classifier that’s utilized to estimate the probability
of a categorical subordinate variable. As shown in Table 3, the impact of utilizing
this methodology is as takes after.

Table 3 Logistic regression

Accuracy
Training 0.98
Testing 0.96
450 A. M. Barakeh et al.

A decision forest is a chart showing possible actions and outcomes. Tree branches
represent different choices or reactions. The tree’s far branches show the outcome of
decision-making. This is the algorithm’s output in Table 4.
SVM is a machine learning technique for classification, regression, and outlier
identification. Table 5 shows the results of the described method.
The Random Forest algorithm is a type of ensemble technique in machine
learning. With regards to classification and regression predictive modeling tasks,
it has widely been acknowledged that this machine learning method exhibits exem-
plary performance, thereby justifying its widespread adoption. Upon implementing
the procedural approach as depicted in Table 6, the pertinent outcome is attained.
As demonstrated in Table 7, all algorithms have resulted in a significant rise in
error rate. The decision forest technique, on the whole, had higher accuracy rates
than other methods.

Table 4 Decision forest

Accuracy
Training 1.0
Testing 0.99

Table 5 Support vector machine

Accuracy
Training 0.96
Testing 0.96

Table 6 Random forests

Accuracy
Training 1.0
Testing 0.98

Table 7 Overall accuracy results

Models SVM RF LR DF
Training 0.96 1 0.98 1
Testing 0.96 0.98 0.96 0.99
Literature Review for Educational Data Mining Systems—Fahad Bin … 451

8 Conclusion

Forecasting students’ performance helps improve learning and teaching. This paper
reviews prior research on the topic. To predict student success, data mining methods
analyzed secondary school GPA, placement test score, and exam GPA. Groups were
split by location and nationality (Saudi/non-Saudi). A study compared four classi-
fication approaches in statistics (logistic regression, decision tree, random forest,
and support vector machine). Overall, decision forest had the highest accuracy rates.
Several variables may impact the result tree and academic success.
The study on predicting student performance has implications for improving
teaching, but further research can build upon it. Researchers can explore addi-
tional factors and use advanced machine learning to forecast student performance.
Researchers can investigate model generalizability and effectiveness in educational
settings and improve student outcomes.

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Social Factors Affecting Customers’
Orientation to Islamic Banks

Amjad Alkhatib, Majed Alshrouf, Mohammad Shadid, Imad AlZeer,

Mousa Ajouz , Nidal Al-ramahi, and Rua Binsaddig

Abstract The study is carried out for the purpose of examining the link between
peer influence and religious motives as independent variables and bank customers’
orientation towards Islamic banks by applying the Social Influence Theory. The
questionnaires were distributed to Southern West Bank individuals using random
sampling methods. A total of 204 valid questionnaires were returned for analysis.
Also, the analytical procedure employed was partial least square analysis (PLS).
Analysis of data involved throughout southern part of West Bank of Palestine region
indicates the peer influence and religious motives have a significant positive rela-
tionship with bank customers’ orientation towards Islamic banks. The outcome from
the current study extended evidence for Islamic banks administration to maximize
bank customers’ loyalty.

Keywords Religious motives · Peer influence · Customers’ orientation · Islamic

banks · Social influence theory

1 Introduction

Islamic Banks are increasingly recognized for their significant role in modern
economies, performing essential functions that profoundly impact income distribu-
tion, economic activity, and cost levels within a country [2, 4, 12]. They are key pillars
in economic development established by current empirical studies that highlight the

A. Alkhatib · M. Alshrouf · M. Shadid · I. AlZeer · M. Ajouz

Ahliya University, Bethlehem, Palestine
e-mail: [email protected]
N. Al-ramahi
Business Faculty, Zarqa University, Zarqa 11831, Jordan
R. Binsaddig (B)
College of Business and Administration, University of Business and Technology, Jeddah, Saudi
Arabia
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 455
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_33
456 A. Alkhatib et al.

value of an efficient, effective, and high-performing financial system in fostering

economic growth, a necessity within Islamic and Arab nations [24, 34, 42].
Given these findings, it becomes clear that economic development necessitates the
engagement of all societal segments in investing in economic projects that benefit the
investors and society at large [16, 44]. This includes the creation of job opportunities,
tax contributions, and more. However, some societal groups may resist financing
through commercial banks due to religious or ideological beliefs that reject interest-
based dealings in accordance with Sharia principles [9, 38, 47, 51]. To cater to these
beliefs, many governments and economic bodies have turned towards Islamic finance,
a shift evidenced by increased international collaboration among Islamic and Arab
countries to discuss the establishment of Islamic banks [4, 9].
The First International Conference on Islamic Economics, hosted by King Abdul
Aziz University in Makkah, Saudi Arabia, in the early 1970s, catalyzed this shift. The
conference led to establishing of the first commercial Islamic bank, Dubai Islamic
Bank (DIB), in the UAE in 1974 [3]. Since then, Islamic banking and finance have
experienced rapid growth in various countries worldwide, including Turkey, Egypt,
the United Kingdom, Bahrain, Pakistan, France, Indonesia, Kuwait, and more. Over
the past several decades, the Islamic banking industry has become one of the fastest-
growing sectors globally [5–8].
Examining the situation in Palestine, it becomes evident that both commercial and
Islamic banks are relatively new entities. Following the Paris Economic Agreement,
they only began operations after establishing the Palestinian Monetary Authority
in 1995. Notably, Islamic banks have attracted considerable attention since their
inception, receiving significant support from the Monetary Authority due to their
recognized potential impact on the development of the Palestinian local economy.
This support includes a dedicated unit within the Banking Control Department to
oversee the activities of Islamic banks [33–36]. However, their market share remains
modest at only 17.6% as of 2020 according to the Association of Banks in Palestine
[28, 35].
Therefore, in Palestine, the comparatively low market share of Islamic banks
necessitates further research into the social factors influencing customers’ choice
of banking. Such investigations can provide valuable insights to help increase the
market share of Islamic banks and, consequently, their contribution to economic
development. Despite being a Muslim-majority country with customs and traditions
derived from the Islamic religion, the inclination towards Islamic banking in Palestine
remains relatively weak [16, 17, 53].
This study aims to offer both theoretical and practical contributions. Theoretically,
it explores the relationship between peer influence, religious motives, and customers’
inclination toward Islamic banks. Practically, it provides valuable guidance to Islamic
banking management in developing strategies that foster a more robust customer
orientation towards Islamic banking.
Social Factors Affecting Customers’ Orientation to Islamic Banks 457

2 Hypothesis Development and Literature Review

As illustrated in Fig. 1 below, the research model is constructed based on the social
influence model. This model posits that perceived peer influence and religious
motives can affect an individual’s orientation toward Islamic banks. Social Influ-
ence Theory pertains to the shifts in an individual’s opinions, emotions, or behaviors
under the influence of others [5, 10–15, 55].
Moreover, this study leans on religious motives as a driver of customers’ orienta-
tion. This theory provides a logical explanation for the relationship between religious
motives and customers’ orientation. Therefore, attitudes toward customers’ orienta-
tion toward Islamic banking could significantly influence customer behavior. Put
differently, customers who perceive no substantial difference between Islamic and
conventional banking may exhibit a negative inclination toward choosing Islamic
banking systems. Conversely, customers with a positive perspective of Islamic
banking will likely demonstrate a stronger orientation towards the same.
The Social Influence Theory is intertwined with the Social Learning Theory,
which traces back to notion that an individual’s behavior is shaped by their environ-
ment. Furthermore, the consequences of an individual’s behavior play a crucial role
in shaping their attitudes. The social influence revolves around how our thoughts,
behaviors, and feelings alter when in the presence of others [9].

2.1 Peer Influence and Bank Customers’ Orientation

Towards Islamic Banking

Due Islamic banking principles are often misunderstood, leading many Muslims
to perceive Islamic banks as serving only a specific Islamic sect [1, 29, 31, 41].
This perception often aligns Islamic banks with commercial banks, particularly
concerning credit extension and interest rates. This, combined with the analogous
nature of cost-plus financing from Islamic banks and interest on commercial loans,
leads to misconceptions of customer deception [22–27].
These perceptions can be attributed to the collective nature of Palestinian society
where group and peer influence significantly sway customers’ leanings toward
Islamic banks. Peers, defined as friends, relatives, and co-workers [46], significantly
impact personal preferences, values, and behaviors [50]. Reference 32] state that

Peer Influence
Orientation towards
Islamic Banks
Religious Motives or

Fig. 1 Structural model results

458 A. Alkhatib et al.

individuals under significant social influence or pressure will conform to expected

behaviors. Thus, decision-making can be influenced by others, such as family, friends,
and co-workers [11], affecting the orientation toward Islamic banking.
Existing research shows a positive correlation between peer influence and
customers’ orientation towards Islamic banks [3, 12, 30]. However, there is a lack of
studies within the Palestinian context exploring this direct impact. This study aims
to fill this gap, investigating peer influence as a critical determinant affecting the
orientation towards Islamic banks in Palestine. Hence, the current research proposes
the following:
H1 There is a positive relationship between peer influence and bank customers’
orientation’ toward Islamic banking.

2.2 Religious Motives and Bank Customers Orientation

Towards Islamic Banking

Reference [18] affirm that religion profoundly influences individuals and communi-
ties’ attitudes, behaviours, and values. Similarly, religiosity, or the level of religious
devotion, shapes cultural beliefs reflected in daily activities and ethics [19–21, 38,
52] Numerous studies support the positive influence of religiosity on the criteria
for selecting banking services [38]. Reference [40] found that Muslim consumers’
preference for Islamic banking was significantly driven by religiosity in Singapore.
This is echoed by [38, 39, 45] who identified religiosity as a primary determinant
influencing Islamic bank patronage and use of services. Reference [30] reinforced
the paramount role of religious beliefs in choosing Islamic banking.
Religious branding also significantly influences decision-making processes. For
example, the “Halal brand” is closely associated with Muslim consumers’ financial
service and product decisions [13, 48, 49]. However, [56] argue that religiosity should
not be the sole decisive factor in choosing Islamic banking. They suggest that a lack
of religious motives could decrease orientation toward Islamic banking.
Given the above discussion, while most studies identify a positive influence of
religious motives on banking choices, a minority find no significant impact. This
leads us to the following proposition:
H2 There is a positive relationship between religious motives and bank customers’
orientation towards Islamic banking.
Social Factors Affecting Customers’ Orientation to Islamic Banks 459

3 Methodology

3.1 Data Collection

The analysis for the current study was conducted at the individual level. Question-
naires were distributed to 250 consumers of Islamic banks. The data was collected
using a random convenience sampling method involving 220 consumers from the
southern West Bank, specifically the governorates of Hebron and Bethlehem. After
data cleansing and analysis, 204 viable data points were obtained, yielding a response
rate of 93%. Among the respondents, 87% were aged 30 or over, and 65% held a
graduate or postgraduate degree. Approximately 65% were employed in the public
sector, and 77% were married.

3.2 Measurement

The variables and items utilized in this quantitative study were entirely derived
from previous research. All variables were measured using a five-point Likert scale,
ranging from ‘strongly disagree’ (1) to ‘strongly agree’ (5). The orientation towards
Islamic banks was evaluated using nine items adapted from [35]. Peer influence was
gauged through six items borrowed from [25] work. Additionally, religious motives
were assessed using six items adapted from the instruments employed by [54].

4 PLS Data Analysis and Results

To investigate the study model, we employed the Partial Least Squares (PLS) method
of data analysis using the Smart PLS 4 software. Building on the foundation laid
by [26], a two-step analytical procedure was utilized to empirically assess both
the measurement model (the relationship between variables and indicators) and the
structural model (the interconnection among the variables) [2, 43].

4.1 Assessment of Measurement Model

The measurement model was evaluated using two types of validity: discriminant
and convergent. Convergent validity was assessed by examining indicator loadings,
composite reliability (CR), and average variance extracted (AVE) [16]. As outlined in
Appendix, all items had indicator loadings above 0.50, ranging from 0.664 to 0.892;
thus, one item, RM5, was excluded due to its low indicator loading. In the same
view, Table 1 shows that the AVE values spanned from 0.568 to 0.694, exceeding
460 A. Alkhatib et al.

the suggested threshold of 0.50, while CR values ranged between 0.856 to 0.931,
surpassing the recommended value of 0.70 [22, 43]. Given these results, the study
affirms the acceptance of convergent validity. The PLS-SEM Algorithm (measure-
ment model), AVE, and factor loadings of items are displayed in Fig. 2, adhering to
the aforementioned criteria.
Following the establishment of convergent validity, the analysis proceeded to
discriminate validity as per [43].The contrast was made between the square root of
the AVE and the corresponding latent variable. As depicted in Table 2, the square
roots of the AVE were higher than all respective cases outlined in the diagonal values
across each column and row [9, 34]. Consequently, this evidence suggests the correct

Table 1 Assessment of the measurement model

Variables CA Composite reliability AVE
Rho_a Rho_c
Customer Orientation (CO) 0.905 0.914 0.922 0.568
Peer Influence (PI) 0.912 0.919 0.931 0.694
Religious Motives (RM) 0.844 0.856 0.889 0.618

Fig. 2 PLS-SEM algorithm (measurement model) and factors loading of Items

Social Factors Affecting Customers’ Orientation to Islamic Banks 461

Table 2 Discriminant
Variables CO PI RM
validity analysis
Customer orientation (CO) 0.754
Peer influence (PI) 0.552 0.833
Religious motives (RM) 0.455 0.504 0.786

application of discriminant validity. Overall, the measurement models demonstrate

the satisfactory fulfillment of convergent and discriminant validity.

4.2 Assessing the Structural Model

The predictive capability of a research theory can be quantified through the R2

value, also known as the “coefficient of determination.“ This value encapsulates
the combined influence of both internal and external variables [43]. We applied the
Smart PLS algorithm function to compute this R2 value, enabling us to gauge the
proportion of variance accounted for by the exogenous variables [43]. Three of the
variables examined collectively presented an R2 value of 0.347. This indicates that
34.7% of the variance in the inclination towards Islamic banks can be explained by
factors such as peer influence and religious motives. A detailed visual representation
of the R2 results can be found in Fig. 3.
To evaluate the significance of the path coefficients (β), we employed a bootstrap-
ping function using 10,000 resamples drawn from 204 cases and applied a one-tailed
test. The path was subsequently assessed, and t-values were computed to ascertain the
veracity of the hypothesized relationship. The outcomes of this analysis can be seen
in both Fig. 3 and Table 3, which elucidate the findings from the structural model’s
examination. Our results indicate a positive relationship between peer influence (β
= 0.432; t = 6.238; p = 0.000) and religious motives (β = 0.237; t = 3.342; p =
0.000) in relation to an orientation towards Islamic banks. These findings support
the first and second hypotheses (H1 and H2).

5 Discussion

This study substantiates the pivotal role of peer influence and religious motivation
in shaping customer inclination toward Islamic banks and guiding others to them.
The outcome of the first hypothesis, which investigates the effect of peer influence
on customers’ orientation towards Islamic banks, reveals a significant positive corre-
lation. This is likely due to the communal nature of Palestinian society, which is
characterized by close-knit social relationships that shape individual decisions.
Customers perceive peer influence, coupled with their impressions of the nature
and cost of services in Islamic banks, as a compelling reason to favor these banks.
462 A. Alkhatib et al.

Fig. 3 PLS-SEM bootstrapping (structural model) beta and T-values

Table 3 Results of hypothesis testing

Hypothesis: path Path coefficient T-statistics P-value Decision
H1: Peer Influence → Costumers 0.432 6.238 0.000** Supported
Orientation
H2: Religious Motives → Costumers 0.237 3.342 0.000** Supported
Orientation
Note Significant at ** p < 0.01

They differentiate them from conventional banks based on their transaction prac-
tices. This aligns with findings from [15, 20, 32] suggesting that influences from
family, peers, friends, and co-workers sway individual decision-making. Conse-
quently, current customers serve as catalysts and motivators for potential customers to
gravitate toward Islamic banks. These findings should prompt Islamic bank manage-
ment to focus on service quality to retain their customer base and inspire peer
recommendations.
Simultaneously, this study affirms the findings of the second hypothesis related to
the impact of religious debt on orientation towards Islamic banks. It underscores that
religious convictions play a crucial role in shaping attitudes towards using Islamic
Social Factors Affecting Customers’ Orientation to Islamic Banks 463

banks and endorsing them to others. This is mainly due to the strong influence of
religious beliefs on customer behavior and their life decisions in Islamic banks.
Furthermore, customers are proficient in differentiating between conventional and
Islamic banks based on their compliance or non-compliance with Islamic law. This
indicates that the primary incentive for switching to Islamic banks is the “Halal”
branding or product offerings rather than the potential monetary gains. Therefore,
the role of religion in transforming people’s economic and social values is greatly
accentuated.
Conversely, the general preference is to avoid Islamic and conventional banks
due to religious beliefs, a unique understanding of banking services, and a perceived
inability to differentiate between traditional and Islamic banking services.

6 Conclusion

Though Islamic banks in Palestine are relatively nascent compared to neighboring

countries, the challenge of orienting clients towards Islamic banking services is
a crucial growth factor. It also aids in meeting the sustainability requirements of
these banks. The present study assesses the impact of peer influence and religious
motivations on customers’ attitudes toward Islamic banks.
Islamic banks have the potential to significantly expand their customer base and
subsequently amplify their revenue streams. This is particularly true in the context of
the recent revolutions in FinTech and smartphone technology, which offer unprece-
dented opportunities for customer engagement and service delivery [7, 37]. However,
this potential is constrained by various factors, including those examined in this study.
Broadly, our research findings suggest a positive correlation between peer influence,
religious motivations, and customer orientation toward Islamic banks.
It was observed that positive perceptions of Islamic banks among their customers
significantly sway their inclination towards these institutions, mainly due to the inter-
connected social fabric of Palestinian society. Consequently, the study advocates for
Islamic banks to collaborate with prominent religious leaders who endorse the legiti-
macy of Islamic banking transactions. This collaboration would aid in elucidating the
compatibility of these transactions with Islamic law, thus reinforcing their religious
validity.
Furthermore, this study proposes that Islamic banks can play a more effective
role in swaying customers towards their services by enhancing their offerings, inau-
gurating new branches, and underscoring the Islamic legitimacy of their banking
transactions. Islamic banks may overcome potential barriers and enhance customer
engagement and trust by implementing these measures.
464 A. Alkhatib et al.

6.1 Limitations and Further Research

The present study has determined that religiosity significantly influences the deci-
sions of Islamic bank clients in Palestine. However, these findings cannot be univer-
sally applied due to the unique social dynamics of Palestinian society. As alluded to
earlier, Palestinian society is deeply interconnected, with members significantly influ-
enced by each other’s viewpoints. This interconnectedness can occasionally hinder
some customers’ orientation toward Islamic banks, mainly due to the influence of
religious discourse propagated by certain Islamic groups and parties. These groups
argue that heightened religiosity can hinder the transition toward Islamic banking
services.
Looking forward, future research could consider additional variables such as the
public image of Islamic banks and the level of trust customers place in them. By
exploring these areas, we can better understand customer attitudes toward Islamic
banks and devise effective growth and acquisition strategies.

Appendix

Constructs and Related Measurement Items Loadings

Customers Orientation towards Islamic Banks (CO)
CO1 Islamic banks provide ATMs 0.742
CO2 The services of Islamic banks are characterized by the 0.800
speedy completion of transactions for their customers
CO3 Islamic banks provide automatic check deposit 0.819
service
CO4 The employees of Islamic banks treat customers with 0.776
kindness and respect
CO5 Islamic banks do not take additional interest 0.664
(commissions) on their services
CO6 The Sharia Supervisory Board of Islamic Banks has 0.688
efficiency and honesty
CO7 Islamic banks give profits on savings accounts 0.775
CO8 Islamic banks are located in geographically 0.775
uncrowded places where they are easily accessible
CO9 Islamic banks allow their customers to conduct 0.729
financial transactions over the Internet
Peer Influence (PI)
PI1 Most customers believe that Islamic banks adhere to 0.784
Sharia rules in their dealings
PI2 Most customers think that it is not acceptable to not 0.852
be committed to Sharia rules in banks
(continued)
Social Factors Affecting Customers’ Orientation to Islamic Banks 465

(continued)
Constructs and Related Measurement Items Loadings
Customers Orientation towards Islamic Banks (CO)
CO1 Islamic banks provide ATMs 0.742
PI3 The majority of the clients believe that the Murabaha 0.892
that Islamic banks get from the clients’ transactions is
fair compared to the services they get
PI4 Most bank customers prefer to go to Islamic banks, 0.848
regardless of the cost of the services provided
PI5 Most customers believe that not going to Islamic 0.772
banks is a transgression because they are not similar
to traditional banks in their transactions
PI6 Most customers believe that Islamic banks are doing 0.844
business that encourages them to go to them
Religious Motives (RM)
RM1 Religiousness is an influential and important factor in 0.806
refining my personality
RM2 I feel guilty when I do not comply with legal 0.885
provisions
RM3 I feel that God Almighty is observing me in all 0.787
aspects of my life
RM4 The legal provisions and limits govern my behavior 0.740
and decisions in life
RM6 Religiousness is an important factor for my feeling of 0.699
safety and psychological comfort

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Impact of Business Analytics
and Innovation on Firm Performance

Irfan Abdul Karim Shaikh

Abstract Some study has been done on the topic of business analytics, but not nearly
enough has been done to build and communicate a general knowledge of the rela-
tionship between analytics and performance. This research presents a comprehensive
framework to describe the many forms of business analytics, their interrelationships,
and the effects of business analytics use on innovation and financial performance, with
the goal of filling the resulting knowledge gap. The empirical analysis was performed
on sample of SMEs industries present in Mumbai. In order to examine the potential for
a causal connection between the research constructs, the study employs a structural
equation modelling (SEM) analysis with a Using product and process innovations
as a second-order factor, business analytics as an exogenous independent variable,
and firm performance as a dependent variable, this study analysed the relationship
between innovation, exogenous independence, and firm performance (endogenous).
The results of research confirmed that business analytics are important predictor of
innovation and performance of SMEs.

Keywords Business analytics · Business innovation · Firm performance

1 Introduction

Firms need to be more creative and nimbler in their ability to anticipate and meet their
consumers’ ever-evolving requirements and wants in today’s fast-paced, worldwide
business climate. These companies’ chances of success or even survival hinge on how
well and fast they can adapt to the ever-changing conditions of the global market. As a
result, IS (Information science) and IT (Information technology) become metaphors
that supply varied resources and approaches to help organizations face and conquer
the challenges of such settings [28]. In recent years, businesses have gained access
to vast amounts of data made possible by their use of digital infrastructure. It’s

I. A. K. Shaikh (B)
Bahrain Polytechnic, Island, Bahrain
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 469
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_34
470 I. A. K. Shaikh

also important to acknowledge how the widespread adoption of IT has led to the
rise of digitalized enterprises that amass both structured and unstructured data. For
businesses to gain a competitive edge, they need to be able to analyse and interpret the
information contained in these massive data sets [8, 21–24]. There are many uses for
IS, each requiring a unique mix of resources and methods for dealing with massive
data volumes. They are meant to handle the “big data” (increasingly large amounts
of data with a high rate of change) that businesses and individuals are collecting
[8, 20]. It has been discovered that BA has a lot of potential for making business
decisions and resource and capacity planning more resilient to the future [25]. Due
to the limited resources available to modern digital SMEs, it is crucial that they take
advantage of digital technology, such as business analytics, to aid in the transition
from one business model to another for improving firm performance [3, 18, 27–29].

2 Research Question

Organizations need in-depth knowledge of markets, consumers, goods, regulations,

competitors, suppliers, employees, and more to thrive in today’s globally intercon-
nected economy. To gain this insight, data analytics must be used efficiently. Busi-
ness operations can be improved with the help of data analytics by zeroing in on
the most profitable customers, setting the most optimal prices, mapping out the
most efficient supply chain routes, and selecting the most qualified candidates [13].
Therefore, it’s very important to understand what the impact of business analytics
on SMEs performance and innovation is. And how innovation can further boost firm
performances.

3 Literature Review and Hypothesis Development

Reference [9, 17] argues that in the future, businesses will need to focus on their
ability to renew themselves in order to remain competitive. One way to do this is
through business analysis (BA), which can help businesses gain a competitive edge by
improving their learning experiences and implementing the knowledge they uncover
[1, 22]. Understanding the specific techniques through which IT applications boost
business performance is essential [19]. This is why [2] demonstrated how advanced IT
capabilities are a major differentiator between high- and low-performing businesses.
Earlier research [12] has claimed that BA skills make it possible for a rich analysis
to assist businesses gain a competitive edge. There is a lot of research showing that
BA improves both organizational and operational performance [14]. The ability of
businesses to solve market problems and opportunities is what is meant by the phrase
“innovation” [17]. Innovation is widely recognized as one of the most important
strategic gains made possible by the implementation of information technology [25,
26]. In accordance with the work of [25], “a firm’s ability to produce, accept, and
Impact of Business Analytics and Innovation on Firm Performance 471

implement new ideas, processes, products, or services” is the definition of innovation

capability. When it comes to improving a company’s capacity for innovation, IT
capabilities center on the use of internal IT resources. Analytics is used by startups for
client acquisition and retention planning and for product development [24]; however,
it is rarely used to improve internal workflow [7]. Even in these cases when BA is not
being fully utilized, it still represents a huge opportunity for startups and SMEs [25].
Such an effort necessitates proper BA implementations and the cautious incorporation
of BA into preexisting organizational procedures to improve the practice [25, 26].

4 Hypothesis Development

4.1 Business Analytics and Performance of SMEs

An important conceptual distinction between big data analytics and big data analytics
capabilities is provided by [16], who also stress the necessity of the latter when
thinking about performance improvements. The authors provide a study frame-
work that emphasizes the significance of aspects related to processes, people,
technology, organization, and data in determining the business value of big data
analytics. Improved data-driven decision making and novel approaches to organiza-
tion, learning, and innovation are made possible by Business analytics [2], which
in turn strengthens customer relationship management, better manages operational
risk, boosts operational efficiency, and boosts firm performance [2, 6].

5 Business Analytics and Innovation

Reference [9] Based on the results of the study, it appears that BA has a direct effect on
environmental scanning, which in turn increases the company’s innovation in terms
of the uniqueness and significance of its new products. Data-driven culture acts as
a mediator between BA’s contribution and the company, amplifying the former’s
impact. Cultures that place a premium on data have an immediate effect on the
originality of new products, and indirectly on their utility by means of constant
environmental monitoring.

6 Innovation and Firm Performance

A study by [30] found a favourable correlation between sales innovation and elas-
ticity across five key performance metrics (Rising Employment, Rising Value Added,
Rising Sales, Rising Operating Profit, Rising Operating Profit to Assets Ratio, and
472 I. A. K. Shaikh

Rising Return on Assets). There is little correlation between creative production

and profit margin. When businesses are broken down into their manufacturing and
service components, it becomes clear that the correlation between inventive produc-
tion and job growth weakens significantly for service organizations. Their research
showed that manufacturing companies can benefit from product, organizational, and
marketing changes.
Research objective.
1. To determine the impact of Business analytics on innovation
2. To analyse the impact of business analytics and innovation on performance of
SMEs.
Research hypothesis:
H1: Business Analytics Has a Direct and Significant Impact on the Performance
of SMEs.
H2: Business Analytics Has a Direct and Significant Impact on Innovation.
H3: Innovation Has a Direct and Significant Impact on the Performance of SMEs.

7 Research Methodology

The empirical analysis was performed on sample of SMEs industries present in

Mumbai. The target respondents for the study are owner/managers who has knowl-
edge of every detail of firms and survey was conducted through random sampling
method. A semi-structured questionnaire was prepared constitutes of two sections:
one about details of respondents and enterprise, another section contains questions on
research variables. The respondents were requested to give their opinion on 5-point
Likert scale (where 5-strongly agree and 1-strongly disagree). The survey method
was believed to be the most suitable method for collection of this data from the
owners/managers from the Mumbai city. Out of 250 questionnaires returned back by
respondents, during data screening process, data having missing values were rejected
and finally 218 samples were selected for further analysis. Descriptive research was
used in this study, and 250 responses were invited to fill up the online questionnaire
Mumbai area. Simple random sampling technique was used to collect responses
from potential users. The response rate for the survey instrument was 87.2% with
the collection of 250 responses. The scale of the study was measured and tested
using Structural equation modelling was used to test the proposed model fit. Cron-
bach Alpha was used to measure the reliability of the variables. Exploratory factor
Analysis was used before moving on to regression analysis. SPSS version 26 and
AMOS 23 graphics were used for the factor and SEM analysis. For measuring perfor-
mance of firm were selected from the [4, 5, 31]. Innovation scales were derived from
the studies of [2] and the item for business analytics were adapted from [4] study.
Impact of Business Analytics and Innovation on Firm Performance 473

Table 1 Details of respondents from selected SMEs (N = 218)

Measures Items Frequency Percentage
Gender Male 178 82
Female 40 18
Age Below 24 3 1
25–30 24 11
30–35 62 28
35–40 73 34
40 & above 56 26
Education Secondary 13 6
Undergraduate 117 54
Postgraduate 74 34
Others 14 6
Type of business Micro 28 13
Small 53 24
Medium 137 63
Industry Food and beverages 33 15
Products that last, like electronics and heavy 48 22
machinery
Chemicals, pharmaceutical and plastics 57 26
Merchandise involving textiles, leather, and 41 19
apparel
Other manufacturing 39 18
Source Primary survey

Descriptive and inferential statistics were used to examine the data with the assis-
tance of SPSS and AMOS version 23. Overviews of the data, as seen in Tables 1, 2
and 3, are provided by descriptive statistics.

7.1 Factor Analysis

A preliminary factor analysis was performed to ensure that selected scale items
were loaded properly with a factor loading score of > 0.5, and no cross-loading was
observed. A high value of KMO (0. 841) and small value of significance (<0.05) of the
results of Bartlett’s Sphericity Test suggest that factor analysis would be beneficial
for our data. Principal Component Analysis (PCA) using Varimax Rotation Method
Kaiser Normalization was applied to the 13 elements. Based on factor extraction
criteria having Eigen values greater than 1, results into four factors, explaining total
variance of 80.927%.
474 I. A. K. Shaikh

Table 2 Factor loadings of variables

Factor Items Item
loadings
Business BA1: We have implemented data processing and analytics via 0.866
analytics cloud services
BA2: Use of predictive analytics such marketing intelligence 0.864
system, data mining
BA3: We’ve used open-source big data analytics software 0.856
Product PDi1: Many product lines are available from our company 0.818
innovation PDi2: According to market needs, we introduce specialized 0.877
products
PDi3: Our business expands into untapped niches through new 0.869
product development (NPD)
Process PCi1: At our organization, we use cutting-edge methods of 0.900
innovation real-time process control
PCi2: Our business deals with the import of high-tech, 0.884
programmable machinery
PCi3: Our company innovates marketing methods 0.875
Performance P1: The percentage of the market that we control is growing 0.859
P2: Our company has a very healthy rate of return on sales 0.849
P3: An increased level of customer loyalty has been established at 0.858
our company
P4: Our firm’s administrative expenses have been reduced 0.886

The descriptive statistics table of perception of SMEs owner/mangers towards

Business analytics is highest as mean value (M = 3.58) above neutral value 3. The
mean values of innovation (M = 3.36) and performance (M = 3.47) are near to
agreement degree it indicate respondents are agreeing on involvement of analytics,
innovation and performance of their firm. Independent factors’ correlation with one
another and with the dependent variables are also displayed in the table above. The
positive and statistically significant correlation coefficients between innovation and
business analytics and SME performance show that the two go hand in hand. Finally,
Table 3 shows the Cronbach’s alpha value, which was used to assess the reliability
of the research variables. According to the threshold requirements, the alpha value
for all four components is greater than 0.7, verifying the data’s reliability.

8 Reliability and Validity Using CFA

CFA was performed by considering all the four factors as exogenous constructs. The
fit indices of the measurement model are χ2 = 506.614, CMIN/df = 1.262; p =
0.015, RMSEA = 0.026, CFI = 0.985, NFI = 0.930 and AGFI = 0.898. This shows
Impact of Business Analytics and Innovation on Firm Performance 475

Table 3 Cronbach’s alpha, Mean, Std. deviation and Correlation of the variables
Business analytics Innovation Performance
Reliability (Alpha value) 0.890 0.781 0.927
Mean 3.5841 3.3593 3.4725
Standard deviation 0.85348 0.64348 0.61644
Business analytics 1 0.248** 0.499**
Innovation 0.248** 1 0.384**
Performance 0.499** 0.384** 1
Note ** indicates correlation is significant at the 0.01 level (2-tailed)

Table 4 Validity and

CR AVE MSV
reliability of research
constructs Performance 0.928 0.762 0.304
Business analytics 0.890 0.731 0.304
Innovation 0.891 0.732 0.214

that the proposed scale fits for measurement [13]. To determine whether indicators
of each latent variable conceptually explain the constructs, the researcher exam-
ined Convergent validity using average variance extracted (AVE). According to the
threshold value, all the AVEs are more than 0.5, indicating that the constructs can
explain 50% of the variance in their items. The four reflectively measured compo-
nents have composite reliabilities ranging from 0.709 to 0.854, above the minimum
threshold of 0.70. [32]. Discriminate validity shows how well one construct may
be separated from another with similar or dissimilar value profiles [14]. Reference
[13] state that the maximum shared variance (MSV) must be less than the average
variance estimate (AVE) to meet the discriminant validity condition (Table 4).

9 Hypothesis Testing Using Structural Equation Modelling

The study runs SEM analysis using maximum likelihood method to test the causal
relationship between research constructs. The study assessed innovation as a second-
order factor constituted of product and process innovations, business analytics as an
independent variable (exogenous), and firm performance as a dependent variable
(endogenous). The criteria for accepting or rejecting a study hypothesis are based on
a critical ratio value of 1.96 and a p value less than 0.05 at the 5% level of significance.
Table 5 displays the findings of the path analysis and hypothesis testing. All signif-
icant relationships are represented by a standardized path coefficient and associated
p-value. The standardized path coefficient is calculated using Table 5 and Fig. 2. (β)
of business analytics to innovation is positive and significant as β = 0.455 with p =
0.000. Since p value < 0.05 and CR (3.826) > 1.96, thus hypothesis H1 accepted.
476 I. A. K. Shaikh

Table 5 Path coefficients of the Structural model

Hypo-theses Outcome Causal SE CR P Path Result
variables variables coefficient
H1 Innovation ← Business 0.061 3.826 *** 0.455 Accepted
analytics
H2 Performance ← Business 0.094 2.647 0.008 0.314 Accepted
analytics
H3 Performance ← Innovation 0.313 2.597 0.009 0.521 Accepted
Note SE; Standard error, CR; Critical ratio, Path coefficient: Standardized regression weights and
p: probability of significance. *** indicates p < 0.000

The impact of business analytics on performance of SMEs is positive and significant

having β = 0.314, CR = 2.647and p = 0.008 (p < 0.05), provided sufficient evidence
to accept hypothesis H2. Similarly, performance of SMEs positively influenced by
innovation with β = 0.521. p = 0.009. This relation is significant as p value less than
0.05, therefore hypothesis H3 was supported from this finding. The findings also
revealed that influence of innovation is more on performance compared to business
analytics as standardized regression value is higher for innovation. The coefficient
of determination (R2 ) value is 0.207, for innovation inferred 20.7% of variation in
attainment is explained by retention. The two predictors of performance, i.e., business
analytics and innovation explained 52% of the total variance in SMEs’ performance.
The fit indices of the measurement model are CMIN/df = 2.161; RMSEA = 0.026,
CFI = 0.989, NFI = 0.958 and AGFI = 0.954. The results indicate that the structure
model fits prediction and interpretation.
Table 5 provides a summary of the findings from the path analysis and hypothesis
testing. For each association, we show the standardized path coefficient and the
statistical significance of that path, together with associated p-values. By referring
to Table 5 and Fig. 2, it is concluded that the standardized path coefficient (β) of all
the factors (Business analytics and innovation, business analytics and performance,
innovation and performance) are positive and significant Table 6.

9.1 Discussion and Implications

The current research examined how business analytics and innovative concepts have
helped or adversely impacted a few small and medium-sized enterprises (SMEs) in
Mumbai. Business analytics were found to be a significant predictor of SME inno-
vation and performance. The results demonstrated that using business analytics in
the form of data-driven technologies, intelligence systems, data mining, or advanced
analytics methods enhances a company’s ability to detect and react to market oppor-
tunities and aids in the development of novel products and procedures. In this anal-
ysis, we looked at how innovation affects the success of small and medium-sized
Impact of Business Analytics and Innovation on Firm Performance 477

Fig. 1 Conceptual framework of the study

Fig. 2 Casual model

businesses (SMEs). The results of this study are consistent with those of [2, 10–
15], suggesting that SMEs can employ innovation to improve their performance and
increase their chances of survival. Product and process were found to be signifi-
cant factors in the study’s findings on innovation. Consistent with earlier studies
[15], the new study finds that product innovation is more powerful than process
innovation. Innovative small and medium-sized enterprises (SMEs) have a better
478 I. A. K. Shaikh

Table 6 Overall model fit

Indices Recommended criteria Model values
Chi square (χ2) pval > 0.05 0.064
Normed chi square (χ2/DF) 1 < χ2/df < 3 2.161
Goodness-of-fit index (GFI) > 0.90 0.967
Adjusted GFI (AGFI) > 0.80 0.954
Comparative fit index (CFI) > 0.95 0.989
Root mean square error of approximation (RMSEA) < 0.05 good fit 0.026
< 0.08 acceptable fit
Tucker-Lewis index (TLI) 0 < TLI < 1 0.925
Source Primary Survey [13]

chance of succeeding in today’s highly competitive market. Research and develop-

ment (both in-house and outsourced), product iteration in response to customer feed-
back, and employee skill enhancement are all crucial to the creation of novel products.
Reference: [20]. Use of cutting-edge technology or painstaking re-engineering fuels
process innovation at SMEs.

10 Managerial Implications

Based on research findings, it is recommended that involvement of business analytics

tools by firm during production and marketing of products is very important aspect to
consider for success the organization. It is advisable for the managers to give attention
to business analytics tools in organization as it can lead to overall innovation in firm.
The importance of business analytics in the creation of new products and services
is ubiquitous. Managers rely on data analysts to build products and strategies across
the board, from making internal organizational changes to promoting those changes.
If the future lies in innovation, then data analytics is the tool that any business can
use to herald in that era. New product development and significance are inextricably
linked to the quality of business knowledge gleaned from environmental scanning
conducted within a robust data-driven culture. The consequences of these findings
for management are not negligible. The results of this study suggest that businesses
should place a premium on product and process innovations as means to attain long-
term competitive advantage.
Impact of Business Analytics and Innovation on Firm Performance 479

11 Limitations and Future Scope

The current research collects data from SMEs present in Mumbai. This study can be
extended to other regions of county. Secondly study has selected only two predictors
of performance: business analytics and innovation and for measuring innovation also
only product and process innovations are taken. Instead of online surveys, one can
go for personal interviews to get accurate results. The scope of this model is limited
to the effects of BA and innovation on the performance of SMEs; as such, it cannot
(and was not designed to) account for all of the important aspects that contribute to
the ultimate success of novel inventions and SMEs performance.

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Technological Protection Measures
and Their Role in Protecting Digital
Works
Omar Al-Makhzoumi, Jaber Al-Ghayathin, Algaily AlTayeb,
and Ali Abu Maria

Abstract This research aims to elucidate the measures enacted by international

conventions for safeguarding intellectual property rights, particularly those perti-
nent to digital works. It seeks to ascertain the adequacy of current copyright laws
in protecting rights holders amidst rapidly evolving technology. The investigation
further sets out to identify critical technological safeguards in place for the protection
of digital works and discuss the implications of legally safeguarding such measures
within the context of copyright laws. The study’s findings indicate that technological
measures have been granted legal protection, as mandated by international agree-
ments and intellectual property laws. These laws proscribe any attempts to circumvent
these measures with the intent to undermine or negate them. In response, penalties
have been implemented for misuse or violation of these technical copyright protec-
tion measures. Moreover, sanctions have been instituted against deliberate interfer-
ence with rights management information to counter the challenges posed by the
increasing proliferation of the information superhighway. The study strongly advo-
cates for enhancing internet users’ awareness of these laws. It underscores the need
to instill a sense of responsibility among users when selecting online information.
It emphasizes adherence to appropriate online behavior, respect for others and their
rights, and avoiding infringement on intellectual property rights.

Keywords Technological measures · Copyright · Digital works · Intellectual

property

O. Al-Makhzoumi (B) · J. Al-Ghayathin

Faculty of Law, Zarqa University, Zarga, Jordan
e-mail: [email protected]
A. AlTayeb
College of Law, University of Business and Technology, Jeddah 21448, Saudi Arabia
e-mail: [email protected]
A. A. Maria
College of Law, Ahliya University, Bethlehem, Palestine
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 481
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_35
482 O. Al-Makhzoumi et al.

1 Introduction

It is clear that piracy of works via the Internet has caused many heavy losses to
authors, owners of related rights, and publishers, which has raised doubts about
the feasibility of being satisfied with the legal protection decided by intellectual
property legislation, whatever the extent of this protection, and whatever the gravity
of the penalties it imposes. That it is not sufficient alone in facing this danger, and
for this reason, authors and rights holders found refuge in technological protection
measures to limit illegal copying acts, as resorting to these measures has become an
effective practical response to copyright violations on digital networks, as by this
means the author can simplify the scope of his control over his works, so that he
can prevent others from reproducing them or even just accessing them, or at least
limiting the number of copies he allows, and even controlling the degree of quality
of the reproduced version.
These measures were limited only to the military and diplomatic aspects until the
sixties of the twentieth century, when governments began to liberalize and allow this
protection within certain limits, and due to the development we have witnessed in the
field of informatics and networks, technological protection measures have become
one of the most important means of protection that are used to prevent aggression
on the digital works even before their occurrence, and on the other hand, there is no
better means of protection that are of the same nature as criminal behavior to reduce
its seriousness and stop its effects, however, counter-technological methods soon
appeared aimed at nullifying the effect of these technological measures that were
followed by the rights holders or circumvention on it, in order to obtain and benefit
from digital works without paying any compensation to their owners, which is what
moved them from the ranks of scientific and technological phenomena to the field
of legal issues and phenomena. There are many laws that have taken serious steps
in codifying the technical protection methods used by the author and criminalizing
acts of abuse. These technological measures, and among the most prominent of these
laws, are what was mentioned by the World Intellectual Property Organization.

2 The Technological Protection Measures to Protect Digital

Works and the Reasons for Resorting to Them

Technological measures have become a widespread reality in line with the ever-
evolving technologies that facilitate illegal copying. Rather, these measures, which
have become necessary to curb illegal copying, must be linked to the evolution of
new and emerging forms and patterns of circulation of works on the Internet.
Technological Protection Measures and Their Role in Protecting Digital … 483

2.1 The Concept of Technological Protection Measures

to Protect Digital Works and Their Importance

Some international agreements dealt with the concept of technological protection

measures, as the WIPO Copyright Treaty adopted on December 22, 1996, through
Article (11) thereof, and in the context of the obligations of member states related to
technological measures, stated that: “The contracting parties shall provide adequate
legal protection and sanctions and effective legal measures against circumvention
of effective technological measures which are used by authors in exercising their
rights under this Treaty or the Berne Convention and which prevent or limit acts not
authorized by authors or otherwise permitted by law in respect of their works [8,
10].”
The same content of the previous text was also mentioned in the Second WIPO
Performances and Phonograms Treaty adopted on December 20, 1996 through
Article (18) where it stipulated that: “The Contracting Parties shall provide in their
laws adequate protection and effective sanctions against the circumvention of effec-
tive technological measures used by the performers or producers of phonograms in
connection with the exercise of their rights under this Treaty and which prohibit the
performance of acts not authorized by the performers or producers of recordings
concerned or not permitted by law in respect of their performances or sound record-
ings” means that the performers or producers of phonograms use in connection with
the exercise of their rights under this Treaty and which are prohibited from performing
acts not authorized by the performers or producers concerned, or otherwise permitted
by law in connection with their performances or recordings [10].”
Paragraph (3) of Article (6) of the European Directive related to copyright in
the information society issued on May 22, 2001, defines technological protection
measures as: “Every technology, device, or installation that, within its normal oper-
ation, aims to prevent or limit the works unauthorized by the copyright holder and
which fall on works or other protected content”.
The importance of technological protection measures lies in preventing access to
the protected work in the digital environment, except with the permission and license
of the owner of the copyright or related rights, and the ease of controlling the number
of private copies that are made on the work, identifying the work in place of copying,
identifying the author or rights holders on the work, and determining the forms of
and the methods of copying that take place with regard to the work, all with the aim
of facilitating the management of rights related to the work, as well as protecting
digital works against intellectual piracy [5–7, 13].
484 O. Al-Makhzoumi et al.

2.2 Technical Means to Protect Works in the Digital

Environment

There exists a wide range of technical means for protecting digital works that are so
diverse and numerous that it may seem challenging to compile them all. However,
the shared objective of all these measures is to equip authors and rights holders with
adequate protection. Rights management information pertains to the digital labeling
of works, which encapsulates details such as copyright protection, ownership, etc.
Here are some key strategies [10]:
Digital Content Marking: This involves adding a copyright notice or warning,
such as “Copying is permitted for non-commercial purposes only,” to the digital
content. It is advisable to include a copyright statement on each webpage detailing
the terms and conditions of its content use.
Digital Object Identifier (DOI): This system assigns unique identifiers or digital
tags to copyrighted digital works, facilitating their tracking on the Internet. The DOI
remains constant even if other information about the digital work changes over time,
providing a reliable source for locating the work online.
Timestamp: This denotes a tag attached to digital content that verifies its status
at a specific time. Time is crucial in establishing copyright infringement cases, like
determining when an email was sent, a contract agreed upon, or a piece of intel-
lectual property was created or altered. Services like WIPO PROOF provide digital
fingerprints for any file, validating its existence at a particular time.
Digital Watermarks: Utilizing software to embed copyright information within
the digital work itself. Digital watermarks may be visibly placed, similar to a copy-
right notice on a photo’s margin, or they could be subtly integrated throughout
the document, akin to watermarked paper. While visible watermarks act as deter-
rents, hidden watermarks serve as theft evidence and enable electronic tracking of
copyrighted work usage.
Encryption: Predominantly used for safeguarding software products, sound
recordings, and audiovisual works against unauthorized use. Digital Rights Manage-
ment (DRM) software can connect with a clearinghouse to arrange payment, decrypt
the file, and allocate a unique key—like a password—for the customer to access the
content.
Access or Conditional Access System: At its most basic, this system verifies
user identity, content files, and the privileges each user holds over a given work. The
owner of a digital work can tailor access in various ways, such as allowing viewing
but not printing or limiting usage to a specific timeframe.
Production of Lower-quality Versions: Companies can publish images on their
websites with just enough detail to demonstrate their utility (for example, in an
advertisement) but not enough for high-quality print reproduction.
Technological Protection Measures and Their Role in Protecting Digital … 485

2.3 Technical Means Related to the Person of the User

One of the most important of these means is the personal card of the work, and each
digital copy of the work contains the information of the rights holders of these works
and the terms of their use. on such information [2, 4].

2.4 Technical Means Related to Protecting the Work

from Abuse

These methods are represented by anti-virus programs that can be installed on the
computer to make copies of the hard disk, every time the device is turned on or in
a regular manner every specific period of time. Among these methods are modern
firewalls, which use the method of filtering and filtering incoming data, and work to
create virtual private networks to monitor data content and prevent viruses [2, 3, 8].

2.5 A Group of Technical Means Related to Protecting

the Work from Abuse

These means are the encryption system, which is one of the technical means used to
protect the work from being attacked.

3 Legal Protection of Technological Measures

Technological measures enjoy the protection of the law, which is expressly stipu-
lated in international agreements and intellectual property legislation, which prohibit
circumventing them to nullify or neutralize them, and in order to achieve this, penal-
ties were imposed for misuse of technical copyright protection measures, as well as
penalties against any deliberate tampering with rights management information In the
face of the so-called information highway, the protection of technological measures
with the intent of preventing assault on digital works depends on these measures
meeting specific conditions that must focus on intellectual content attributed to an
author in order to protect it and ensure its effectiveness.
Article 11 of the WIPO Copyright Treaty relating to Technological Measures
states that: “Contracting Parties shall provide in their laws for adequate protection
and effective penalties against the circumvention of effective technological measures
used by authors in exercising their rights under this Treaty.” or the Berne Convention,
which forbids acts not authorized by the relevant authors or permitted by law in
relation to their works to be undertaken”.
486 O. Al-Makhzoumi et al.

3.1 Terms of Protection of Technological Measures

The WIPO Copyright Treaty, as well as the WIPO Performances and Phonograms
Treaty, confirmed that the protection of technological protection measures requires
the availability of certain conditions, which are as follows:

3.2 The Measures Must Focus on a Work Covered by Legal

Protection

To protect technological protection measures, the technological measures must focus

on intellectual content attributed to an author in order to protect it and ensure its
effectiveness, which means that the object of protection is a protected work within
the meaning of copyright law of any kind, as long as it involves an original mental
effort that has been expressed. In a tangible material form [5, 9].

3.3 Technological Measures Must Be Developed

by the Author or Stakeholders

This condition has been affirmed by both the WIPO Copyright Treaty and the
WIPO Performances and Phonograms Treaty, and this condition includes the author
himself, the performing artist, producers of phonograms, broadcasting and broad-
casting organizations, as well as public and private successors, as well as rights
holders [1, 2].

3.4 The Aim of These Measures Must Be to Prevent Works

Considered to Be the Author’s Monopoly

The technological measures that rights holders use to protect their works are either to
control the use of the work or to control access to the work, and with reference to the
provisions of Articles (11) of the WIPO Copyright Treaty and its counterpart Article
(18) regarding performance and sound recording, we find that these two treaties They
stipulate the protection of technological measures that aim to prevent works that the
law considered the monopoly of the author alone [1, 11].
It is also imperative for the author to choose the type of protection he wants, as the
protection is conditional on the will of the author, as he is in charge of determining
the desired goals of using technical means, that is, he is the one who determines the
actions and actions that are permitted to the beneficiary of the work and the actions
that are not permitted, in a way that constitutes every violation of the will of the
Technological Protection Measures and Their Role in Protecting Digital … 487

author A violation of his right is punishable by law, and finally, the consumer must
inevitably be informed of these procedures, as the person who is harmed by them
[5, 10].

3.5 The Implications of the Legal Protection

of Technological Measures on Copyright Laws

In light of the development of methods of committing crime, discovering the perpe-

trator has become difficult in this field [9], and most criminal legislators in most
countries have not introduced new procedural laws to confront crimes of copyright
infringement arising from the use of computers and the Internet [11], and this type
of crime raises some difficulties in collecting evidence [12–14].
Therefore, supporters of legal protection for effective technological measures
justify the need for it, as the solution to the problem of the loss of exclusive right
resulting from the circulation of works in the digital environment and the lack of
control of rights holders over their works in it. The author is in this environment that
is threatened in the digital environment, as these measures constitute a second line of
defense in the face of attacks on copyright in this environment, which international
and national law decided to protect from circumvention, thus constituting a third line
of defense for works [1].
Thus, these measures had a significant impact on copyright, both with regard to the
legal nature of copyright and the extent of the monopoly resulting from the protection
of the work by means of these measures. The owner of the right, by resorting to
technological measures, seeks in reality to establish an individual relationship with
each user, in which every use of the work becomes under the control of the right
holder. His control is no longer limited, as in the past, to the actions related to
publishing the work to an audience whose members are not specified. Rather, he
controls the work’s access to every member of the audience [3, 15].
For example, the television broadcast of an unencrypted station, which includes
an unspecified audience, so that members of the public can enjoy what this station
broadcasts without the need for individual contracts with them, while the broadcast
of encrypted stations includes only individuals participating in individual contracts
with this station, and therefore the copyright that used to include Rights defined
exclusively by legislation, thanks to these technological measures, have become
extended to include another right, which is the right to prevent others from using
or accessing the work, whether or not this includes rights of the author such as
reproduction or transmission [6].
Technological measures now give rights holders the possibility to monitor every
use of the work and make these uses for a fee, and this means that the extent of the
monopoly of the work is determined not only by the will of the legislator, but also
by the will of the rights holders who decide to put or not technological measures
on the work, and the type of protection that the measures provide for the works.
488 O. Al-Makhzoumi et al.

The legislator only strengthens the will of the rights holders by preventing him
from circumventing the technological measures that are used to prevent or limit
the carrying out of unauthorized acts by the rights holders, so they are the ones who
decide the existence or non-existence of exceptions, and they are the ones who decide
the public’s uses of the work, even if they exceed the limits that the legislator drew
for this protection. This phenomenon is called by jurisprudence as the self-regulation
of the author’s right, meaning that determining the extent of the author’s rights is
done by the beneficiaries of this right at the expense of the public [4, 16].
Although technological protection measures appear to be the best way to ensure
respect for copyright on the Internet and the real and effective guarantees they provide
for protecting the rights of authors, they and their legal protection raise the problem of
the practice of private copy registration, as there is a conflict between the application
of technological protection measures and copy restriction, as they are specified in
relation to the technological means or measures of protection that would completely
prevent access to the work, i.e. impede mere entry to the work under what may be
called the right of entry for the copyright owner or allow access to the work without
copying it for personal or private use [8].
But if these measures would allow access to the work, its use and copying for one
time, then this does not cause much trouble, as it does not conflict with the registration
of the private copy, and this contradiction appears clearly in the law that explicitly
stipulates the registration of the private copy on the one hand and stipulates protection
of technological measures on the other hand, there are laws that established a kind of
balance between technological measures and the right to a private copy, as is the case
in the French law of 2006 related to copyright and related rights in the information
society (DADVSI).

4 Conclusion

To bolster the protection afforded to copyright holders, the establishment of more

robust mechanisms became imperative. A multitude of protective means and preven-
tative mechanisms have been embedded in laws regulating these rights, designed
to preserve these rights and inhibit any infringement. Technological measures have
emerged as indispensable tools in curbing illicit copying operations, necessitating
their evolution in line with the innovative forms and patterns of circulating works on
the internet. Legal protection is now extended to these technological measures, as
per international conventions and intellectual property legislation. This legislation
prohibits attempts to circumvent these measures for their nullification or neutral-
ization. To enforce this, penalties have been instated for the misuse of technical
copyright protection measures. Additionally, sanctions have been set against any
deliberate manipulation of rights management information, effectively countering
the challenges posed by the ever-expanding information highway.
Technological Protection Measures and Their Role in Protecting Digital … 489

4.1 Recommendations

1. The need to create special legal provisions that regulate more effectively the cases
of criminal and civil Internet service intermediaries, and cases of exemption from
them.
2. The need to specify the period of time during which the aggrieved person can
request a hearing to hear the statements of both parties.
3. Educating Internet users about the laws and creating a sense of responsibility
among them in the process of selecting information on the Internet, and in the
necessity of following the rules of correct behavior while entering the network,
respecting others and their rights, and not infringing on intellectual property
rights.

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Forensic Accounting and the Auditing
of the Digital Banking

Walaa Abdulla Alaaris and Abdalmuttaleb Al-Sartawi

Abstract The paper focuses on the usage of forensic accounting for digital banking.
The advancement of technology and the wide usage of digital banking applications,
increase the possibility of fraud which need more skills from the forensic accountant
to discover and support the companies and the individual in protecting their assets.
Depending on the previous literature the paper recommends developing the skills of
accountants and auditors and encourages using forensic accountants as part of the
internal control systems.

Keywords Auditing · Forensic accounting · Digital banking · Technology ·

Forensic methodology

1 Introduction

The combination of competence in accounting, auditing, and investigation leads to

the branch of study known as forensic accounting [1, 2]. The accounting analysis
offered by forensic accounting (FA) is suitable for use in a court of law and will
serve as the basis for conversation, disagreement, and the eventual resolution of the
problem. Investigative accounting and litigation support are both included in FA [3,
4]. In this context, “litigation support” refers to accounting support in cases where
litigation is already in progress or is soon to be [5, 6]. It mostly tackles issues with
how economic frauds are categorized [7, 8]. A frequent legal defense is calculating
the economic loss caused by a violation of contract. However, “investigative account-
ing” is typically associated with judicial proceedings. The assignment of securities

W. A. Alaaris
Freelancer, Manama, Bahrain
e-mail: [email protected]
A. Al-Sartawi (B)
Ahlia University, Manama, Bahrain
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 491
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_36
492 W. A. Alaaris and A. Al-Sartawi

fraud, insurance fraud, and employee theft, among other frauds possibly a compo-
nent of the investigative accounting. A forensic accountant must be knowledgeable
about accounting, auditing, and investigations to effectively perform an investigation.
Forensic accounting, as defined by [9] is the investigation of alleged frauds, irregular-
ities, or misconduct that may give rise to civil, criminal, or disciplinary procedures
and largely focuses on accounting-related concerns. In cases when there may be
litigation, arbitration, expert testimony, mediation, or a regulatory body investiga-
tion, forensic accounting can also be helpful. Moreover, forensic accountants will
help in evaluating the banking decisions and the ways followed to reach the taken
decisions. The evaluation included for example whiter the decisions made without
taking enough time and without collecting the necessary data and they will evaluate
the relation between the fission makers and the people who benefit from the decision
etc. [7].
Usually, the forensic accounting report will cover all the expected areas of fraud
such as expenditure and investment decisions, income distribution and shortage, the
level of compliance with the related regulations, and any activities which will lead
to loss of revenue, and customers, and threatens the economy. Moreover, the report
will discuss the areas of improvement and the steps followed by the bank to enhance
its internal control system which will close any current or future gaps [10, 11].
What accountants and auditors are required to perform and be accountable for has
become clearer in recent years. The knowledge in auditing, accounting, legislation,
and modern technologies is highly appreciated nowadays to develop rational solu-
tions for the economic issues [12, 13]. Accordingly, the need for forensic accountant
increased to solve issues with law and accounting nature [14, 15].
Several different stakeholders need forensic accountants Lawyers, police, courts,
insurance companies, banks, law enforcement organizations, the business commu-
nity, government representatives, and government-related legal institutions could all
be considered among them [16, 17]. The techniques used by forensic accounting to
identify and investigate accounting errors sets it apart from standard accounting, and
auditing [18, 19]. However, both auditors and forensics need to have deep knowledge
of accounting to bridge the expectation of the stakeholders [20, 21]. Usually, there are
three main fields where forensics are needed, they will act as expert witnesses, fraud
auditors, and litigation supporters. The governmental bodies usually benefit from the
services provided by the forensic accountant, and they are using their working papers
because it includes some vital information such as such as fraud auditing, planning,
put into practice procedures, indications of fraud risk, and documentation in forensic
accounting investigations [22, 23].
In the digital age it is expected to enhance the auditors, accountants, and forensic
accountants’ profession by providing them with deeper analysis and will let them to
access a large quantity of data and summarize it in a shorter time than before [24, 25].
Technological systems such as AI will increase the productivity and the efficiency
of the different institutions [26]. Like this, criminals’ ability to carry out, cover up,
or otherwise aid unlawful or unethical operations has enhanced because of their use
of computers. Because there is little chance of being convicted, let alone caught,
crimes utilizing computer systems seem to be encouraged by the general public’s
Forensic Accounting and the Auditing of the Digital Banking 493

improved technological proficiency and anonymity [27]. These “cyber-crimes” are

more likely to be traditional crimes that take advantage of computing power and
information accessibility than they are brand-new crimes [28, 29]. They are a result of
computer systems being too easily accessible and used by people with bad intentions.
Investigators need to use standardized and well-defined forensic processes to catch
and convict perpetrators involved in digital crime [30, 31].
Digital forensics is a relatively recent discipline it was introduced in the literature
instead of computer forensics and includes all the forensics related to digitalization
and technology [32, 8]. Unlike its description as the collection of techniques and
technology used to find evidence in a computer [33, 34]. The definition of digital
forensics using the word “computer” is [35, 36] The gathering, protection, authenti-
cation, analysis, identification, explanation, documenting, and presentation of digital
evidence produced from digital sources to foresee illegal acts that have been proved
to impair planned operations, or assisting in the reconstruction of events that have
been determined to be criminal [37, 38].
Law enforcement has come to understand that a wide range of digital devices,
not only computers, are used in modern life and can be used for criminal behavior,
which has led to the rise of digital forensics [39]. Digital forensics may include cate-
gories related to digital devices and digital technologies, in comparison to computer
one, which usually focuses on the techniques used to obtain evidence from specific
platforms [40]. Digital forensics is considered an output of all the known practices
and techniques developed by the practitioners over time (e.g., system administrators,
hackers, and law enforcement) accordingly it is difficult to standardize [41]. This
fact makes it difficult to consistently collect information and assess it objectively
[42, 43].
Palmer et al. [44] suggested a system that is not dependent on a particular tech-
nology or electronic crime. The system has a recognizing protocols and ideas from
conventional forensics, especially the steps used by the FBI during a physical crime
scene search. The key components of the suggested system include the following:
• Identification is the process of classifying an incident after classifying its indica-
tors. Despite not being directly related to forensics, this is significant since it has
an impact on subsequent operations [44, 42, 45].
• Planning—developing plans, instruments, search warrants, monitoring authoriza-
tions, and management support [44, 46, 47].
• Adaptive approach strategy development based on the relevant technology and
any potential side effects on bystanders. The goal of the strategy should be to
collect the most untampered-with evidence while harming the victim as little as
feasible [44, 48, 49].
• Preservation—separate, safeguard, and maintain the integrity of both physical
and digital evidence. Access to the digital device may be restricted, and other
electromagnetic devices may be used in the affected region [44, 50, 51].
• Collection—Copy the digital evidence and capture the real scene using standard-
ized and authorized techniques [44, 52, 53].
494 W. A. Alaaris and A. Al-Sartawi

• Examining: a careful, methodical examination of the evidence related to the

alleged crime. The focus is on identifying and locating potential evidence, possibly
in unanticipated locations. Create extensive records for analysis [44, 54, 55].
• Analysis: pinpoint significance, piece together data shards, and draw [44, 56].
• conclusions based on the information gathered. Testing and analysis may need to
be done repeatedly in order to support a criminal theory. The benefit of analysis
is that more people can work on this problem because it might not require a high
level of technical competence [44, 45].
• Presentation—give a synopsis and justification of the results. This should be
expressed using straightforward language and abstract terminology [57, 58].
• Returning evidence entails ensuring that tangible and digital property is given
back to the rightful owner and determining what types of criminal evidence must
be eliminated. Again, not forensics step specifically, but any approach that seizes
evidence hardly ever solves this issue [59].
Be aware that these processes are an abstraction of contemporary methods for
investigating crimes involving digital data [44, 60] as opposed to conventional
methods for gathering physical evidence. There is a significant body of tried-and-
true investigative methods and techniques in more traditional forensics domains.
They are not yet given much weight, even though the majority are appropriate in
cyberspace [37]. Also keep in mind that up until this point, it is possible to declare
abstractly what kind of digital technology is being used in these activities [61, 62].
This is important because it allows for the establishment of a standard operating
procedure without disclosing the specific technology involved [63, 64]. This makes
it feasible to interact between the old and new advanced digital hard and software
in a well-known and widely accepted manner this system can be used on traditional
devices such as calculators, personal computers, and with any future devices [65].
Future technologies will enhance the way of using the suggested system to develop
its ability to perform forensic analysis and to offer a consistent and standardized
process for delivering, which will advance forensic science by offering a system-
atic framework for evaluating advanced technology while enabling law systems and
enforcement [66, 67].
Under this concept, further required procedures will apply in order to specify the
types of technology. All digital technologies that sustain stable states on their own
would be examined like paper documents, videotapes, and audio recordings, these
technologies are already widely used as evidence [54, 68]. A judicial member might
utilize this abstraction to give this category more credibility than, say, technologies
under the Volatile Storage category [69]. The system will enhance the data collection
techniques, examined, and improved within the parameters of each technical subcat-
egory [70]. The development of new methods for different technologies should be
influenced by an established and enhanced approach. Because the procedure of gath-
ering was incorporated into the model, it gives the category more legitimacy and
reassures non-technical viewers that experience gathering Analogous evidence was
applied to a specific instance in the similar group [71].
Forensic Accounting and the Auditing of the Digital Banking 495

Storage will consider to the addition of the fixed hard drives with built-in non-
volatile flash memory (often seen in ordinary computer systems) (used in personal
digital assistants, digital cameras, MP3 players) [72, 73]. In this hypothetical situa-
tion, both technologies may contain information that is pertinent to the judges, and by
treating that information as permanent digital storage, they can continue to have faith
in the veracity of the data discovered [74, 75]. Although the actual data extraction
would rely on the underlying technology, as binary data is frequently stored in files,
the evaluation of the contents might again follow a regular procedure. The benefit
of the abstraction is that most digital equipment, including as computers, personal
digital assistants, digital cameras, and other gadgets, have non-volatile storage that
can be checked for potential evidence [76, 77]. Previously developed ways can serve
as a jumping off point for new technologies, and by identifying the similarities,
supporting processes and tools can be found for development [78, 79].
There can be no model without a consideration of its advantages and disadvan-
tages [80]. It’s important to mention any cons after outlining the advantages. Before
anything else, there is no testing or proof that this paradigm is the ideal response
for the DF framework. When developing a DF system, it is important to understand
the link between digital technologies and working backwards to construct a solid
forensics approach that applies to many digital technologies rather than a select few
[81].
Since meaningless activities have no application in the real world, caution must
be taken to prevent removing them [82]. Second, this model was developed with the
use of digital technologies so the non-digital will not be considered [83, 84].

2 Conclusion

The paper discussed the literature related to forensic accounting and the auditing
of the digital banking. The previous suggested a forensic digital system which can
be used to support the auditors and forensic accountant to prepare their reports
and to suggest some solutions to protect the banking sector assets. The suggested
system as per the literature will create a standardized and universal framework for the
advancement of digital forensics [9, 85, 86], provides a way to integrate next digital
technologies into the same architecture [37, 87, 77], produce a general strategy that
judges can use to explain technology to observers who are not technically savvy [7,
88], establishes the need for specific technologically dependent instruments while
providing information on previously established tools from the same category and
will enhance the ability to incorporate similarity electronics [44, 89, 90].
On the other hand, the system might be too broad, there might not be an obvious
or straightforward approach to test the system [91]. As additional subcategories are
added, using the model will get more difficult [7, 92, 93]. One clear subject that our
model completely ignores is the custody, which is essential part of any investigations
[71, 94, 95]. A robust chain of custody will be upheld in the investigation, according
496 W. A. Alaaris and A. Al-Sartawi

to this approach. It is assumed in any discussion of forensics, but the fact that it isn’t
part of the model above doesn’t indicate that it isn’t important [96, 36].
Accordingly, it is recommended to understand the weakness and strongness of
the system and to educate the auditors and forensic accountant about the advantages
and disadvantages of the digital forensic system to assure better utilization of it.

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The Reflection of Applying Accrual Basis
in Enhancing Transparency
and Accountability in the Jordanian
Public Sector

Sanaa Maswadeh and Mahmoud Ababneh

Abstract The study aimed to identify the reflection of applying the accrual basis in
enhancing transparency and accountability in the Jordanian Public Sector. To achieve
the objectives of the study, a questionnaire was designed and distributed to the study
population consisting of the Ministry of Finance and its affiliated departments and the
Audit Bureau in Jordan, (34) departments with its branches, with (753) employees. A
total of (270) questionnaires were distributed to the study population, after examining
the retrieved questionnaires, and deleted for lack of information in them, the randomly
selected sample became (255) questionnaires, the multiple regression used to test the
hypotheses of the study. The study concluded that there is a positive effect of applying
the accrual basis through developing control systems, updating accounting systems,
and evaluating the performance of government units on enhancing transparency and
accountability in the Jordanian public sector. The most important recommendation of
the study is the necessity to develop technological capabilities and modern computer
programs in the Jordanian public sector to keep in line with the updating of the
accounting system and develop the control system according to the accrual basis
requirements.

Keywords Accrual basis · Developing control systems · Updating accounting

systems · Evaluating the performance · Accountability and transparency · Public
sector · Jordan

S. Maswadeh (B) · M. Ababneh

Jadara University, Irbid, Jordan
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 501
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_37
502 S. Maswadeh and M. Ababneh

1 Introduction

Due to the many problems related to the cash basis, Jordan was one of the devel-
oping countries that adopted the application of accounting standards for the public
sector and made many reforms, including using the accrual basis. Leads the govern-
ment to develop control systems and update accounting systems, and evaluate the
performance of public sector units, all of these considerations an essential tool to a
governance that is closely linked to transparency and accountability principles.
The public debt crisis in Jordan and the global financial crises revealed that the
absence of accountability, transparency, fragility, lack of clarity in public financial
policy, and poor management of the Jordanian public sector exposes the government’s
ability to fulfill its obligations and implement its main tasks related to providing the
necessary services in various forms.
As a result of what these crises created, the Jordanian government found itself
forced to review its accounting, financial, and control systems to make them more
transparent and accountable, which resulted in the need to provide comprehensive,
appropriate, and reliable financial information as a main core for decision-making
and effective control of public funds. In this context, the researchers consider the
transformation of the Jordanian public sector from a cash basis to an accrual basis
as the first stage of reforms necessary to manage the public sector and reduce its
indebtedness, through the preparation of financial reports according to this basis and
in a way that enables the government to provide information that allows making a
rational decision and allows for more transparency and accountability.
The Jordanian government has recognized the importance of transparency and
accountability in the public sector, and Jordan is one of the developed countries that
adopt public accounting standards [1]. Therefore, the Jordanian public sector was
chosen due to the Jordanian government’s reform efforts, the need to extend research
on accrual accounting, and the unique economic, social, and political context of
Jordan. Also, Jordan is one of the first developing countries to adopt the application
of the accrual basis in the public sector, and because the researcher works in the
Jordanian Ministry of Finance, the researcher has the incentive to apply accrual
basis as part of his current position.
Accordingly, Prime Ministry Resolution No. 22915 of 2014 was issued in
Jordan, which called for reliance on accounting standards issued by the International
Accounting Standards Board in the public sector at the forefront of these standards
is the application of the accrual basis.
Therefore, this study came to investigate the reflection of applying the accrual
basis on enhancing transparency and accountability in the Jordanian public sector,
which plays an important role in enriching the scientific content on this topic. The
significance of the study from a practical point is the importance of international
accounting standards in the government sector, as most countries moved towards
applying these standards, especially the accrual basis, especially after it became
clear that the cash basis contains multiple defects most notably: the government’s
failure to show the financial position properly because it represents a departure from
The Reflection of Applying Accrual Basis in Enhancing Transparency … 503

the principle of independence of the years, as revenues and expenditures are recorded
on the date they are received, leads to difficulty in tracking revenues and expenditures
in each financial period, in addition to the lack of comprehensiveness of the oversight
role in it and the lack of comprehensiveness of accounting measurement, leads to the
emergence of distortions in the financial reports prepared within this basis and gives
an opportunity for manipulation of public revenues and expenditures figures [2].
As a result, the contribution of the practical study appears in helping the official
authorities in the country, including the Ministry of Finance and the General Budget
Department, to assess the important role of applying the accrual basis in enhancing
transparency and accountability in the Jordanian public sector.

2 Theoretical Framework

The application of the accrual basis is considered one of the necessary accounting
principles on which it was necessary to develop control systems, update accounting
systems, and evaluate performance to enhance accountability and transparency in the
Jordanian public sector. The study of [3] showed that the accrual basis is recognized
the financial events during the period in which they occurred, and the public revenues
and expenses are charged for the actual financial period in which they occurred.
Polzer et al. [4] indicated that the accrual basis is the accounting basis that discloses
property and liabilities, then depreciation and proper assessment of assets; it works
to achieve the principle of comprehensive control over public revenues and expendi-
tures, so they are recorded in the related financial period regardless of the time and
date of their collection or payment, and requires making inventory adjustments to
public revenues and expenditures and financial events, concerning accounting period
and loaded on the final accounts for this period.
Gnanarajah [5] Defines the cash basis as the method of recording and reporting
revenues, and expenses, whereby revenues and expenses are recorded when cash is
received or paid.
The concept of accountability overlaps with other ideas, such as responsibility and
monitoring, so defining it faces some difficulties. However, for the United Nations
administration, accountability refers to the obligation of public sector employees to
report on the use of public resources and failure to achieve stated performance goals
[6].
Hijo and Al-Ashi [7] Study showed the extent to which international public
accounting standards are applied in Palestinian government institutions, which
concluded that the application of the accrual basis reduces financial and admin-
istrative corruption in the Palestinian public sector.
Diab [8] Study aimed to identify the challenges facing the Lebanese public
accounting system, especially those related to the transition to the accrual basis and
the adoption of international accounting standards. And the ability to manipulate
financial data under the use of the cash basis, the study focused on the importance of
504 S. Maswadeh and M. Ababneh

shifting from the cash basis to the accrual basis and the development of legislation
related to the transition process.
The study of [9] aimed to identify the challenges of reform and transition towards
accrual accounting for IPSAS and its implementation in Kosovo. The study reached
several results, most notably the need for more financial resources and trained human
resources to implement the financial reform process in the public sector in Kosovo.
Kuroki et al. [10] Investigate whether the use of the accrual basis leads to the
intended effects of reform in the Japanese public sector. The study concluded the
importance of applying the accrual basis in all Japanese departments and provinces
to achieve reform in the public sector and the importance of relying on unified
accounting standards in Japanese government departments.
Mijbil and Jabal [11] Concluded that reliance on international accounting stan-
dards in the public sector leads to providing more quality information in the financial
reports in Iraq and the ease of comparing the financial statements of the different
government units.
Zhang [12] Study sought to evaluate the experience of applying the accrual basis
in the public sector in China and the political and social implications of the reform
process. It concluded that the reforms and organizational changes that took place
in the Chinese public sector emphasized the need for reforms in the government
accounting system. The Chinese need to move forward with accounting reforms
on an accrual basis, as they achieve positive advantages for the Chinese central
government.
Cuadrado-Ballesteros et al. [13] Studied the impact of the transition to the accrual
basis of accounting and the use of international accounting standards in the public
sector in reducing corruption in government departments in developing countries.
The most important results were the use of the accrual basis of accounting in the
public sector leads to reducing corruption and combating it.
The study [1] aimed to demonstrate the impact of applying the accrual basis
on the final accounts in various ministries and government departments in Jordan
by showing the advantages of using the accrual basis. One of the most important
findings of the study was that the application of the accrual basis in the Jordanian
public sector works to activate the comparison between the different budget items
and the comparison between other years, which leads to improving the quality of
government financial data and information to assist the government in drawing up
the most effective policies, necessitated the need to develop the accounting system
in Jordan to comply with the international public accounting standards.
After reviewing the theoretical literature of the study and the most prominent
studies that dealt with the study subject, the following hypotheses were tested:
The main hypothesis: There is no significant effect at a level of (α ≤ 0.05)
of applying the accrual basis on enhancing transparency and accountability in the
Jordanian public sector.
The following sub-hypotheses derived from the main hypothesis:
The Reflection of Applying Accrual Basis in Enhancing Transparency … 505

– There is no significant effect at a level of (α ≤ 0.05) for the development of control

systems in line with applying the accrual basis on enhancing transparency and
accountability in the Jordanian public sector.
– There is no significant effect at a level of (α ≤ 0.05) of updating accounting
systems in line with applying the accrual basis on enhancing transparency and
accountability in the Jordanian public sector.
– There is no significant effect at a significant level of (α ≤ 0.05) of evaluating
the performance of government units in line with applying the accrual basis on
enhancing transparency and accountability in the Jordanian public sector.

3 Methodology

The study relied on the descriptive analytical approach, as the descriptive approach is
related to the theoretical side of the research, and the analytical approach is associated
with the practical side, in which a questionnaire was prepared and distributed to the
target members of the study and the statistical methods were used to analyze the data
and test the hypotheses of the study.

3.1 Study Population and Sample

The study population consists of the Ministry of Finance and its affiliated depart-
ments and the Audit Bureau in Jordan, (34) departments with its branches, with
(753) employees working in it with the job title of an accountant, auditor, depart-
ment manager, and head of the accounting department. The study population was
determined by referring to the records of the Human Resources Department in the
Ministry of finance and its financial departments and the Audit Bureau, a total of
(270) questionnaires were distributed to the members of the study population, and
(260) questionnaires were retrieved from them. After examining the retrieved ques-
tionnaires, (5) questionnaires were deleted due to insufficient information, so the
randomly selected sample consisted of (255) employees, consider a representative
sample according to [14] table, with a percentage of (33.86%) of the total population
of the study.

3.2 Measurement of Study Variables

To collect the necessary data for the current study, a questionnaire was developed
after referring to many previous studies and the theoretical framework of the subject.
The questionnaire consisted of two parts, the first part covered demographic char-
acteristics of study members consisted of (educational level, specialization, age,
506 S. Maswadeh and M. Ababneh

experiences, job title, and the number of training courses). While the second part
covered each of the independent variables in three dimensions: the development of
control systems (8) items, updating the accounting systems (8) items, evaluation
of government units’ performance (8) items, and evaluation of the performance of
government units (10) items. The dependent variable represented transparency and
accountability and was measured by (10) items. So the questionnaire in its final form
consisted of (34) items, according to the five-point Likert scale: (strongly agree,
agree, moderately agree, disagree, and strongly disagree), expresses the following
values in order (5, 4, 3, 2, 1).

4 Statistical Analysis Results

After conducting appropriate statistical tests the study reached the following
statistical results.

4.1 The Validity and Reliability of the Instrument

The apparent validity of the instrument in its initial form (34) items was verified by
presenting it to (13) reviewers specialized in accounting in different Jordanian public
and private universities.
The indicator values of the instrument construction validity were as follows: The
correlation coefficient of the degree on the item for the items of the instrument
ranged between (0.708–0.856), and the correlation coefficients of the items with
the dimension they belong to it ranged between (0.767–0.892), and the correlation
coefficients of the dimensions with the totality of the instrument between (0.929–
0.963), and all of them were statistically significant at a significant level less than
(0.01), which indicates that all these items are highly correlated with the dimensions
to which they belong and an indicator that the items included in the instrument are
highly correlated and statistically significant, and this is an indication that they belong
to the domain they derived from it.
The Cronbach Alpha was used to test the reliability of the instrument, as the
value of the Cronbach alpha for the development of the control systems (0.929),
updating the accounting system (0.932), evaluating the performance of government
units (0.926), enhancing transparency and accountability in the Jordanian public
sector (0.962), lastly the whole questionnaire items (0.982), indicating that the scale
has a high degree of reliability that meets the purposes of the current study, and
exceeds the acceptable statistically value estimated at (0.70) according to [15].
The Reflection of Applying Accrual Basis in Enhancing Transparency … 507

Table 1 Results of-one-sample T-test- to perspectives of the study

Perspectives of the study Mean Standard deviation T Sig.
Development of control 3.919 0.761 82.606 0.000
systems in line with applying
the accrual basis
Updating accounting systems 4.031 0.740 86.785 0.000
in line with applying the
accrual basis
Evaluating the performance of 3.913 0.766 82.073 0.000
government units in line with
applying the accrual basis
Enhancing transparency and 3.878 0.837 74.884 0.000
accountability in the Jordanian
public sector

4.2 Descriptive Analysis of the Study Perspectives

The study relied on a one-sample t-test to analyze the data related to the agreement
level of study members on the instrument items, and it was applied to all perspectives
of the study, So the overall results were as follows.
Referring to the Table 1, it was found that the mean of development of control
systems was in line with applying the accrual basis (3.919), with a standard deviation
of (0.761), the mean of updating the accounting systems in line with applying the
accrual basis (4.031), with a standard deviation of (0.740), and the mean of evaluating
the performance of government units in line with applying the accrual basis (3.913),
with a standard deviation of (0.766), finally, the mean of enhancing transparency
and accountability in Jordanian public sector was (3.878), with a standard deviation
of (0.837). with a statistically significant of all perspectives (0.000), which is less
than the significance level of (α ≤ 0.05), consider an indicator of the existence of a
statistically significant difference from the test value (3) according to the Likert scale,
in the sense that the overall mean of the answers of the study sample agreed that the
applying of the accrual basis was reflected in the development of control systems,
updating of accounting systems, and evaluating the performance of government units
in the Jordanian public sector. Also, the overall mean of the answers of the study
sample agrees with enhancing transparency and accountability in the Jordanian public
sector.

4.3 Multiple Regression Test

Before starting the application of multiple regression to test the hypotheses of the
study, some pre-tests were conducted to examine the suitability of the data to the
assumptions of the regression analysis, including The normal distribution test to
508 S. Maswadeh and M. Ababneh

ensure that the data followed the normal distribution, so that it was found that the
value of the statistical significance of (One-Sample Kolmogorov-Smirnov test) for all
variables was greater than the level of statistical significance 0.05, indicates that all
variables follow a normal distribution. Also, based on the theory of central tendency,
which states if the sample size is greater than (30) and has a mean (μ) and a variance
(σ2 ), the sampling distribution is normal [16].
The multicollinearity test was used to ensure that there is no high correlation
between the independent variables by calculating the variance inflation coefficient
(VIF) and the tolerance coefficients for all the independent variables, the results were
obtained accordingly; it was found that the values of the variance inflation test for all
variables are less than (10). In contrast, the value of the tolerance coefficients for all
variables is greater than (0.10), It is an indication of the absence of multicollinearity
among the independent variables of the study. The result of pretests enhances the
possibility of using the multiple regression model to test the hypotheses of the [17].
Based on the results of the multiple regression tests, to test the effect of developing
control systems, updating accounting systems, and evaluating performance in the
line of applying accrual basis on enhancing transparency and accountability in the
Jordanian public sector which were shown in the following table.
Table 2 shows the value of (Adjusted R2 ) reached 0.863, with a statistically signif-
icant value indicating the application of the accrual basis through developing control
systems, updating accounting systems, and evaluating the performance of the public
sector, explained (86.3%) of the variation in enhancing transparency and account-
ability in the Jordanian public sector, while the remainder of the percentage is due
to other variables that were not included in the regression model, and the value of
(f) was (533.830) at the significance level of (sig = 0.000) and this confirms the
significance of the regression at the significance level of (α ≤ 0.05), and the ability
of the independent variables to effect transparency and accountability, therefore the
first main hypothesis is accepted with the alternative formula state: “There is a
significant effect at a level (α ≤ 0.05) of applying the accrual basis on enhancing
transparency and accountability in the Jordanian public sector”. This result
agreed with many studies, including those [18], which concluded the importance
of shifting from the application of the cash basis to the accrual basis gradually in
the Iraqi public sector. It also agreed with [19], which concluded that applying the
accrual basis increases the transparency and accuracy of financial information, thus
enhancing transparency and accountability. It also agreed with the study [7], which
showed that the application of the accrual basis led to improving the quality of the
financial statements of the Jordanian public sector and helped enhance account-
ability and transparency. It also agreed with the result of [18], who concluded the
importance of shifting from applying the cash basis to the accrual basis and its contri-
bution to improving government performance and financial data and making them
more efficient in a way that enhances accountability and transparency in the public
sector.
It also appears in Table 2, that the value of the regression coefficient for the
development of control systems has reached (0.322), with a statistical significance of
(0.000), which proves the existence of a significant positive effect of the development
The Reflection of Applying Accrual Basis in Enhancing Transparency … 509

Table 2 Multiple regression results of the effect of applying accrual basis on enhancing trans-
parency and accountability in the Jordanian public sector
ŷ = −0.329 + 0.322x1 + 0.131x2 + 0.618x3 + e
Independent variables
B coefficient T value Sig. T*
Constant −0.329 −3.058 0.002
Developing control systems 0.322 6.831 0.000
Modernization of accounting systems 0.131 2.194 0.029
Public sector performance appraisal 0.618 11.707 0.000
R2 0.865
Adjusted (R2 ) 0.863
F 533.83
Sig. (F) 0.000
where
ŷ: Transparency and accountability
x1: Developing control systems
x2: Updating accounting systems
x3: Evaluating the performance of the public sector
e: Margin of error of the regression
β0, β1, β2, β3 regression coefficients

of control systems on enhancing transparency and accountability in the Jordanian

public sector. Thus we accept the alternative hypothesis states: “There is a significant
effect at a level (α ≤ 0.05) for the development of control systems in line with
applying the accrual basis on enhancing transparency and accountability in
the Jordanian public sector”. This result agreed with [20], which showed that
the development of control systems in the public sector improves transparency and
accountability. It also agreed with [21], which showed that the application of the
accrual basis enhances financial and administrative control that reduces violations
in the public sector. It also agreed with [22], whose results showed that applying the
accrual basis helps in determining expenditures and revenues for the public sector
and increases control over them.
It also appears in Table 2 that the value of the regression coefficient for updating
accounting systems was (0.131), with a statistical significance of (0.000), which
proves the existence of a significant positive effect of updating accounting systems on
enhancing Transparency and accountability in the Jordanian public sector. This leads
to accepting the alternative hypothesis, which states: “There is a significant effect
at a level (α ≤ 0.05) of updating accounting systems in line with applying the
accrual basis on enhancing transparency and accountability in the Jordanian
public sector”. This result agreed with [8], who concluded that updating accounting
systems enhances transparency and accountability in the public sector. Also agreed
with [1], who concluded the need to improve the accounting system in Jordan to
comply with international government accounting standards. And agreed with [1, 20,
510 S. Maswadeh and M. Ababneh

22], who concluded that the application of the accrual basis increases the reliability
of the information provided by the accounting system and enhances transparency
and accountability.
It also appears in Table 2 that the value of the regression coefficient for evalu-
ating the performance of the public sector was (0.618), with a statistical significance
level of (0.000), which proves the existence of a significant positive effect of perfor-
mance evaluation on enhancing transparency and accountability in the Jordanian
public sector. Thus we accept the alternative hypothesis, which states: “There is a
significant effect at a significant level (α ≤ 0.05) of evaluating the performance
of government units in line with applying the accrual basis on enhancing trans-
parency and accountability in the Jordanian public sector”. This result agreed
with [23], showed that shifting to the accrual basis has many benefits, including
improving financial accountability, decision-making, and better evaluating govern-
ment units’ performance, enhancing transparency and accountability in the public
sector. It agreed with [21], and concluded that evaluation performance enhances
transparency and accountability in the public sector.

5 Conclusions

After analyzing the data of the study and testing its hypotheses, the study reached
the following notable conclusions:
– The application of the accrual basis through developing control systems, updating
accounting systems, and evaluating the performance of government units was
reflected in enhancing transparency and accountability in the Jordanian public
sector.
– The application of the accrual basis contributed to the ability of government
administrative units to assess their obligations and evaluate their performance
by determining important indicators for comparing the inputs and outputs of the
accounting system in different financial periods and preparing more accurate
financial reports.
– The application of the public accounting standards and accrual basis contributed
to providing appropriate information for planning, decision-making, and identi-
fying deviations from the established plans, thus formulating the strategic plans
realistically, increasing the confidence of the parties dealing with the public sector,
in turn, was reflected in enhancing transparency and accountability.
– The application of the accrual basis in the public sector enhanced the comparison
of public reports for different years and increased the effectiveness of performance
evaluation according to more accurate indicators, thus reflected in the providing
services to the public at a satisfactory level.
– The application of public accounting standards and transition to the accrual basis is
a necessity to increase compatibility with the trends of the International Monetary
Fund and increase the ability of the government to attract external grants and
The Reflection of Applying Accrual Basis in Enhancing Transparency … 511

decrease the pressures and terms in the case of the necessity of borrowing in
urgent circumstances.
The reflection of applying the accrual basis in enhancing transparency and
accountability in the Jordanian public sector has significant implications for policy,
regulators, practice, and theory. The findings of the study suggest that there is a
need for policymakers to promote the adoption of accrual accounting in the Jorda-
nian public sector. Policymakers should make accrual accounting a priority to ensure
that financial reporting is accurate and comparable, and facilitate the monitoring of
financial performance and the detection of irregularities, to enhance the quality and
credibility of financial reporting.
Applying the accrual basis in the public sector will require investment in training
and capacity building for accounting personnel, as well as the implementation of
appropriate information systems and internal controls.
The study has implications for the theoretical understanding of the role of accrual
accounting in enhancing transparency and accountability. It provides evidence to
support the view that accrual accounting can contribute to better decision-making,
improved financial management, and enhanced accountability in the public sector.
Overall, the current study contributes to a growing literature on the potential
benefits and challenges of adopting accrual accounting in the public sector. The
consistent findings across studies suggest that the adoption of accrual accounting can
enhance transparency and accountability, while the potential challenges associated
with its adoption should be taken into account when considering implementation.

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ESG Performance and Tax Avoidance:
The Case of the Jordanian Capital
Market

Ayman Ahmad Abu Haija

Abstract Environmental, Social and Governance (ESG) disclosures are expected

to play a pivotal role in introducing firms as transparent and responsible players on
behalf of their societies and other interested groups through paying their shares of
taxes. This study therefore examines the effect of ESG disclosures on tax avoid-
ance practices on the Jordanian business environment using a panel data set which
comprises 2,595 firm year observations of non-financial firms listed at the ASE
between 2003 and 2022. The results of multiple regression analysis show a signif-
icant negative association between governance disclosures and tax avoidance, indi-
cating that high-quality governance system leads to maximize the firms’ accounting
practices and choices that are lead to pay more taxes which in turn leads to enhance
services provided to the community they operate in. However, environmental and
social disclosures are found to be insignificantly associated with tax avoidance prac-
tices. This study recommends that the Jordanian regulatory bodies must devote more
efforts and adopt restricted regulations in order to restrict the probability of adopting
tax avoidance techniques in order to provide more financial resources to build up the
infrastructure and provide more efficient services to the community.

Keywords Environmental disclosure · Social disclosure · Governance disclosure ·

Tax avoidance

1 Introduction

During the last years, firms among the global were willing to disclose and pay their
shares of taxes to avoid any suspicious arrow that could be fired by social members
to classify such firms as “Poor Citizen” [1]. Indeed, firms are inclined to enhance
societies’ welfares by paying their taxes which in turn it may be used to build up
the needed infrastructure in terms of education and health [2, 3]. However, taking a

A. A. A. Haija (B)
School of Business, Jadara University, Irbid 733, Jordan
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 513
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_38
514 A. A. A. Haija

contradictory path in paying taxes may introduce firms as irresponsible social players
who ignored the society needs by maximizing their benefits only; such an endangering
attitude by firms’ managers may threaten the firms’ continuity as well as it may affect
the legitimacy of their companies which has been given by the stakeholders and other
interested users [4, 5]. In other words, as long as the disclosure map is readable by
interested groups, firms’ stability, acceptance by their societies and obtaining the
legitimacy in front of the stakeholders are expected to noticeable which in turn may
adjust the road to compline with societies norms [6].
As a proof [6], ascertained that, restating the financial statements numbers has
dropped reputational destructions on the firm which adopted such practices as well
as they found that, enhancing the disclosures levels in terms of such issues related
to the environment, social or the governmental issues may be a clear map to come
out of the bottleneck. From the legitimacy point pf view, firms are accommodating
with reflecting an accepted appearance in the business markets by either increasing
the voluntary disclosure map or by participating in building their societies by paying
the fair amount of taxes [5].
Bewitchingly, managers are in unenviable position since they are expected to direct
their experience and knowledge to maximize shareholders’ wealth, mean while they
are under pressure to serve their societies effectively [7]. Indeed, managers will take
the advantage of the loopholes presence in taxation laws in order to minimize the level
of the tax owed [8], otherwise their presence may be revoked. Therefore, the main
research question in this paper is to investigate whether the tax avoidance behavior
within the Jordanian market will be affected by the ESG performance.

2 Literature Review and Hypotheses Development

2.1 Organizational Legitimacy

One of the key criteria of accepting firms as active social representatives of their firms
is if they have been legitimized by the society. In this vein, legitimacy has been defined
as “the appraisal of actions in terms of shared or common values in the context of
the involvement of the action in the social system” [9]; hence, any variance appeared
among firms’ activities during the operational process in compare with the values or
norms imposed by the societies may threaten the firms’ acceptance and therefore may
harm their reputation as well [10, 11]. Undeniably, there is a clear connection among
ESG practices and legitimacy perspective [2, 12]. For example [13, 14], clarified that,
the willingness of being accepted socially as well as holding remarkable reputational
position are the main externalities incentives targeted by firms’ managers to introduce
their firms as active players in terms of some issues connected to the society and
employees’ rights. In other words, incorporating in enhancing ESG performance
may be appeared as a bridge to restrict the societal skepticism in terms of firms’
ESG Performance and Tax Avoidance: The Case of the Jordanian … 515

legitimacy. Hence, adopting ESG practices may introduce such firms as legitimate
representatives of several issues related to their societies; for instance, ESG issue.

2.2 ESG and Tax Avoidance

ESG issues have attracted the attention globally recently, since such a disclosure
activity may play noticeable role in the classification map in terms of firms’ accep-
tance in their communities. Hence, firms with a clear commitment to their tax
payments as well as focusing on societies issues such as ESG will definitely re-
rank such firms to be as leaders and legitimized firms which in turn may receive a
social prominence from civil society players.
Recently, firms were under pressure to face and solve the damage of the envi-
ronmental conditions’ changes occur for many reasons; indeed, firms are willing to
gain a sustainable profit as well as social acceptance form its society to minimize
the effects of its operations on the environment [15, 16]. In fact, the issue of the
environment has become a clear obligation for firms globally since they are needed
to deal with the outputs of firms’ operations.
For example, the environmental turbulences as a result of gas emission, solid
waste or climate change could be solved or at least constrained if the firms are fully
committed to pay their shares of the imposed taxes; hence governments can use
this money to enhance community welfare and reduce the negative consequences of
firms’ operations [17, 18].
Noticeably, socially accepted firms are willing to engage effectively in enhancing
the issues connected to the social factors such as: labor rights, work environments,
which in turn may increase firms’ acceptance in their societies. Indeed, such a perfor-
mance of firm’s boards is expected to increase the ethical commitment of such boards
which in turn reflects firms’ adherence to pay their shares of taxes. In other words,
this dedication in enhancing voluntary practice is expected to send a clear signal to
interested groups such as stakeholders that such firms are connected efficiently to
their society’s needs, hence, their taxes will be paid fully without any manipulation
or adjusting [19].
However, and in terms of firm’s commitment in relation to governance disclosures,
active firms with high and transparent performance in enhancing such disclosures will
introduce firms as trustworthy groups who focus on maximizing principals’ wealth
as well as the prosperousness and safety of the societies’ by paying the fair amounts
of their taxes. Explicitly, committed firms will satisfy the expectations of the hetero-
geneous expectations of its stakeholders and the society as well. Conspicuously, if
the firms’ managers were not inclined to believe in governments ability to use the
taxes efficiently they will be willing to avoid taxes to pave the roads to maximize
their wealth and ignoring stakeholders’ preferences in terms of the environmental
issues [20, 21].
Furthermore, firms with scarce resources are expected to direct their interests
into efficient decisions to maximize firms’ profits and values instead of focusing on
516 A. A. A. Haija

enhancing voluntary practices [22, 23]. In line with this conclusion, [24] asserted
on the importance of enhancing the environmental aspect in order to minimize the
cost of avoiding taxes. The literature in terms of the ESG effects on tax avoid-
ance is contradictory, since several points of view appeared. However, this research
follows the suggestion which introduces committed firms as socially accepted firms
which means that, enhancing the ESG disclosures are expected to minimize the tax
avoidance decisions which in turn enhancing the welfare of the hosting societies.
Therefore, the following hypotheses will be tested:
H 1 : there is a negative relationship between environmental disclosures and tax
avoidance.
H 2 : there is a negative relationship between social disclosures and tax avoidance.
H 3 : there is a negative relationship between governance disclosures and tax
avoidance.

3 Research Design

The covered sample in this study comprises of all non-financial firms listed between
2003 and 2022 at Amman Stock Exchange (ASE). All selected firms must disclose all
the needed data in terms of the ESG concept and it must be listed during the sample
period at ASE. Tax avoidance has been estimated as the negative sign of calcu-
lated earnings management estimation by using the Modified Jones Model (1995).
Indeed, it will be indexed by the negative sign of the discretionary accruals. The
rational justification behind selecting this approach is that, one of the key incen-
tives to manipulate earnings is to avoid paying high amount of taxes [6]. In terms of
the ESG estimation, this study has adopted the guideline published by the ASE in
which the different dimensions (Environmental, Social and Governance disclosures)
have been explained in detail. Indeed, seven items have been used to estimate the
environmental part of the overall disclosures. Additionally, thirteen items have been
employed as a proxy to estimate the social disclosures and finally eight items have
been proxied to estimate the governance disclosures. The overall number of items
used as an index of the ESG was 28 items [2] (Tables 1 and 2).
In order to achieve the main goal of this study, a sample of non-financial firms
listed at ASE between 2003 and 2022 has been selected from the study’s population
which consists in total 4,191 firms. The financial firms have been excluded from the
final sample since such sector has a different set of characteristics in compare with
other sectors. Furthermore, firms with missing information related to ESG disclosures
have been removed from the final sample. Hence, the final sample of this study covers
2,595 listed firms.
ESG Performance and Tax Avoidance: The Case of the Jordanian … 517

Table 1 Summary of variables and their measurements

Description Variable name Measurement Exp. sign
Dependent variable
TAX.AVO Tax avoidance The negative sign of calculated
earnings management estimation
Independent variables
ENV.DIS Environmental disclosure An aggregated score of seven +
variables
SOC.DIS Social disclosure An aggregated score of thirteen +
variables
GOV.DIS Governance disclosure An aggregated score of eight +
variables
Control variables
SIZE Firm size The total assets at the end of year +
LEV Leverage The ratio of total debt to total equity −
ROA Return on assets The ratio of net income to total −
assets
TAX.AVOit = β 0 + β 1 ENV.DISit + β 2 SOC.DISit
+ β 3 GOV.DISit + β 4 SIZEit + β 5 LEVit + β 6 ROAit + εit

Table 2 Sample selection criteria

Description Number of observations
All firms listed on the ASE from 2003 to 2022 4,191
Less: financial firms (935)
Less: missing environmental data (211)
Less: missing social data (159)
Less: missing governance data (144)
Less: missing financial data (147)
Final sample 2,595

4 Results and Discussion

Table 3 presents the descriptive statistics of the study’s variables. Based on the
previous table, the average of tax avoidance (TAX.AVO) estimated by the negative
sign of discretionary accruals is approximately 2% of the study’s sample covered in
this study with a median of one percent. This average of tax avoidance indicates that,
the Jordanian listed firms at ASE have practiced the techniques that are expected to
help them in saving firm’s cash from being paid as taxes to the Jordanian governments.
In terms of the environmental disclosures (ENV.DIS), Table 3 shows the average
and the median of the ENV.DIS within the Jordanian environment in which the
518 A. A. A. Haija

reported values were 28.9% and 24.7% respectively. Most importantly, the maximum
level of the environmental disclosures reached 78.4%. Unfortunately, some firms
were not willing to disclose any information in terms of the environmental aspects
where the minimum percent was zero. The Jordanian regulators must shed the light
on the importance of the environmental discloser since such concept appears to be
outside the monitoring map for some of the Jordanian firms. Indeed, the average of
disclosing information related to the environment issues was four times higher the
Jordanian market average as reported by [25] within the French context. While the
Jordanian managers were more willing to disclose more environmental information
in compare with the Malaysian managers in which this issue has just covered 14%
of the Malaysian disclosures map [22].
With regard to the social disclosures, Table 3 reported that the lowest level of
the ESG dimensions was related to the SOC.DIS with an average of 22.7% and a
median of 19.8%. This low score gives a clear signal that, the Jordanian managers
of the non-financial listed firms at ASE between 2003 and 2022 were not inclined
and motivated to increase this levels as well as, this topic (i.e. ESG) is a new concept
for the Jordanian managers therefore, they still not recognized the importance of this
issue. Interestingly, the Korean managers were well informed and educated about
the importance of increasing the social disclosures according to [18] who reported
an average of 86% of the social issues disclosures.
In respect of the governance disclosures levels extracted from the non-financial
listed firms sample between 2003 and 2022, Table 3 shows an average of 36.1% and a
median of 33.4%. However, the maximum reported average was 84.5% and the lowest
average was 12.5%. Interestingly, this average recorded within the Jordanian market
is close to the average of the governance disclosures within the Korean context, since
[18] claim that, the average of this concept reached 89% of the overall disclosures
preferences. With reference of the control variables, the average of firm size, leverage
and ROA were 187.2, 61.1% and 3.8% respectively.
To test the multicollinearity among the study’s variables, Pearson test has been
applied to the collected data. According to [26] who claims that the correlation
strength among data set must be 70% or below to avoid any obstacle in such issue.
Therefore, and according to Table 4, all extracted values of Pearson test were below

Table 3 Descriptive statistics

Variables Observations Mean Median Min. Max.
TAX.AVO 2,595 0.021 0.012 0.0001 1.425
ENV.DIS 2,595 0.289 0.247 0.000 0.784
SOC.DIS 2,595 0.227 0.198 0.000 0.677
GOV.DIS 2,595 0.361 0.334 0.125 0.845
SIZE (in million $US) 2,595 187.2 174.9 0.127 7947
LEV 2,595 0.611 0.354 0.125 2.047
ROA 2,595 0.038 0.027 −1.078 1.478
All variables are defined in Table 2
ESG Performance and Tax Avoidance: The Case of the Jordanian … 519

the critical value; hence the multicollinearity issue is not recognized as noticeable
issue.
In order to achieve the goal of this study a regression analysis has been applied
to regression model formulated previously. According to Table 5, the relationship
between TAX.AVO and ENV.DIS was positive but insignificant. This result contra-
dicts the main hypothesis developed which suggests a significant negative correlation
between ESG dimensions and TAX.AVO. This result however supported the finding
documented by [18] who found a positive but insignificant relationship between tax
avoidance and the environmental part of the ESG. Hence, H 1 is rejected. In terms of
the social disclosures, Table 5 also documents an insignificant positive relationship
between TAX.AVO and the social dimension of the ESG as well. Indeed, this finding
is in line with the conclusion made by [27]. However, the results of Table 5 contradict

Table 4 Correlation matrix

Variables TAX.AVO ENV.DIS SOC.DIS GOV.DIS SIZE LEV ROA
TAX.AVO 1.000
ENV.DIS −0.054* 1.000
SOC.DIS 0.167 0.339* 1.000
GOV.DIS −0.047* 0.017 0.217 1.000
SIZE 0.335* 0.234* 0.524* 0.457* 1.000
LEV 0.068* 0.208* 0.301* 0.148 0.215 1.000
ROA −0.119* 0.109* 0.347* 0.478* 0.336* −0.258* 1.000
The symbol (*) denotes significance at 1% in two-tailed test
All variables are defined Table 2

Table 5 Regression results

Variables Coefficient T-value Probability
of the association between
ESG and tax avoidance ENV.DIS 0.034 1.17 0.287
SOC.DIS 1.148 0.84 0.397
GOV.DIS −3.149 −4.98 0.000
SIZE 2.365 2.29 0.021
LEV 0.019 0.786 0.547
ROA −0.090 5.98 0.000
Constant 1.258 −8.49 0.000
Adjusted R2 31.8
No. of observations 2,595
Notes This table presents the results of fixed effect regression
of the association between ESG and tax avoidance. The sample
comprises 2,595 firm-year observations of listed firms on the
ASE from 2003 to 2022. The dependent variable is tax avoid-
ance (TAX.AVO). Independent and control variables are defined
in Table 2
520 A. A. A. Haija

the main hypothesis adopted which suggests a negative and significant correlation
between ESG and TAX.AVO. Therefore, H 2 is also rejected.
Noticeably, only the governmental dimension among the ESG disclosures was
negative and significant over the sample of non-financial firms listed at ASE between
2003 and 2022. This result underpins the outcome documented by [28]. Hence, the
hypothesis (H 3 ) that has been developed to this dimension is accepted. In general,
from the extracted results shown on Table 5, it seems that, the non-financial listed
firms at ASE between 2003 and 2022 have practiced TAX.AVO techniques. Indeed,
firms which focus on TAX.AVO practices with neglecting other issues such as ESG
are appeared as firms with short term vision in creating a sustainable social image to
guarantee the social acceptance among their hosting contexts [29, 30].
Furthermore, firms with weak role in increasing their participation in ESG
practices may shirk their social roles and, in some cases, may threat their social
contracts with the surrounding environments [12–35]. Hence, engaging noticeably
in TAX.AVO practices may be seen as a legal path to pay fewer amounts of firms’
shares to develop the contexts’ infrastructure and other needed services. Furthermore,
firms with willingness to adopt TAX.AVO are introduced as opaque firms which lack
transparency and clearness in controlling their firms and in some cases may hinder
interested groups form having the accurate financial and non-financial position of
their firms.

5 Conclusion

The concept of ESG is considered a key topic that listed firms have devoted note-
worthy efforts to include such information in their annual reports; as well as the
regulatory bodies and other groups such as academics have focused in ESG perfor-
mance to understand the extent of the socialism of listed firms globally. In other
words, ESG concept is expected to play role in introducing firms as transparent and
responsible players on behalf of their societies and other interested groups.
On the other hand, avoid paying taxes by listed firms may create unfavorable
social acceptance for such firms since they are escaping from paying their shares of
taxes that could be used to enhance the welfare of their societies. Indeed, the prior
literature that covered the relationship between ESG and TAX.AVO has introduced
several contradictory conclusions. Therefore, the main goal of this study was to
investigate the effect of ESG disclosures on tax avoidance practices over a sample of
non-financial firms listed at ASE between 2003 and 2022. The results showed that
environmental and social disclosures were positively but insignificantly correlated
with TAX.AVO practices. Governmental part of ESG was negatively and significantly
associated with TAX.AVO. Therefore, this study recommends that, the Jordanian
regulatory bodies must devote more efforts and adopt restricted regulations in order
to restrict the probability of adopting TAX.AVO techniques in order to provide more
financial resources to build up the infrastructure and providing more efficient services
to the Jordanian community. Additionally, more efforts must be directed to make
ESG Performance and Tax Avoidance: The Case of the Jordanian … 521

sure that the ESG disclosers have reflected on the ground effectively to guarantee the
presence of active social player within the Jordanian context.

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The Impact of Digital Marketing
on SME’s Growth and Success as a Tool
of Marketing Communication: A Case
Study in Bahrain After the Pandemic

Layla Alhalwachi, Eman Askar, and Amir Zaidan

Abstract The purpose of this study is to examine the impact of digital marketing
on the growth of SMEs by adopting digital marketing strategies in the Kingdom of
Bahrain after the pandemic. This study is to determine the effect of digital marketing
tools such as social media, emails, viral marketing, and others, on the establish-
ment of successful SMEs businesses. Additionally, it seeks to explore the connec-
tion between SMEs and digital marketing by defining key components of the digital
marketing strategy and how to apply them in small and medium-sized businesses
from a marketing standpoint. This study will employ a structured questionnaire
to determine the impact of digital marketing on sales improvement of SMEs in
Bahrain. Digital marketing has positive impact on users experience into increasing
sales revenues which has affected consumers buying decision online. The study’s
findings will aid SMEs’ management and owners in considering digital marketing
tactics as a crucial platform for promoting their brands. The suggestions for more
research are connected, but possibly more specific in the context of Bahrain.

Keywords Digital marketing · Entrepreneurial growth · Entrepreneurial success ·

COVID-19 pandemic · Bahrain

L. Alhalwachi (B) · E. Askar · A. Zaidan

Bahrain Polytechnic, PO Box 33349, Isa Town, Kingdom of Bahrain
e-mail: [email protected]
E. Askar
e-mail: [email protected]
A. Zaidan
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 523
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_39
524 L. Alhalwachi et al.

1 Introduction

Emerging very recently from the covid-19 pandemic, humanity and the world
economy with its various sectors, industries, governments, populations, and resources
have experienced a real nearly 2-year shift in perspective, realization, possibilities,
and capacities. The lockdown around the world caused vast numbers of SMEs to cease
trading, and many more were either on the cusp of bankruptcy or highly vulnerable
seeking government bailouts and delayed bill payments and even waivers. For all the
businesses that were able to survive, digital marketing and ecommerce were the only
practical possibility for continuation in the market on the competition dimension and
customer service dimension. On the one hand digital marketing became the tool to
communicate, avail customers of value, compete in the struggle to survive against
market pressures and competitors, while on the other hand ecommerce was the tool
to fulfil transactions safely, timely and efficiently [52].
As a direct result of the pandemic, digital marketing and ecommerce became
a critical necessity during the pandemic. Firms of different classification in virtu-
ally all industries rapidly enriched their business resources with digital tools [7].
Digitalization has impacted all facets of society, with a major impact on social,
political, and economic aspects [30]. In Bahrain, according to [61], the ecommerce
market revenue is projected to reach US$1,296.00 m by the end of 2022 due to user
penetration reaching 57.9% in 2022. The projections put the annual growth rate at
an expected (CAGR 2022–2027) of 12.11%, leading to a predicted market size of
US$2,295.00 m by 2027. This is a direct result of the expansion in users’ numbers
that is expected to amount to 1.2 m users by 2027 hitting 61.7% proving the vitality
of online and business digital availability and utilization during the pandemic [3].
The lockdown forced businesses to use a variety of digital tools, to establish
their presence in the corporate world and display their brands with the intention
of growing their customer base and creating virtual availability of their value [49].
According to [16], the use of digital tools in business activities has been shown to
increase business competitiveness and opportunity base, particularly for SMEs to
compete on more even terms with larger organisations. Their purpose is to make
sales of products and services, build relationships with customers and prior to that
investigate the digital realm using sustainable digital marketing techniques, which
assists access and communication to a wider range of target market for a better
productive output [14, 27, 46, 53].
Digital platforms create an excellent launchpad and support to start and grow
an SMEs brand [49]. Digital marketing for SMEs need be in line with the target
market, marketing strategy, and goals to adhere to changing, sophisticated consumer
behaviour. In the present day, creating a corporate identity is a crucial strategic
requirement for SMEs to develop their own brand marketing strategies and proce-
dures [48]. Small and Medium-Sized Enterprises operate in aggressive red oceans
with an unpredictable business environment, constant challenge of competition and
the need to provide quality value to customers, against established organizations. Due
The Impact of Digital Marketing on SME’s Growth and Success … 525

to their size and economic capacity, established organizations (the large enterprises)
are more likely to succeed.
This creates a radical need for SMEs to apply social networks, online adver-
tising campaigns and other virtual strategies to accelerate their businesses’ devel-
opment growth in opposition to well-funded businesses. This should be done in
cognizance with adapting to new and inventive methods to improve and adapt to a
rapid transformational growth [20, 49, 54]. With the global effects of the pandemics
on local economies, international trade disruption and supply chains stalemate, due to
borders shutting to combat the pandemic spread, lack of supply and increase in local
demand, consumers needed alternatives. It became a necessity that governments and
industry players around the globe support, encourage and fuel the growth of SMEs
for a sustainable economy and social rest which on the long run guarantees national
economic competitive advantages for businesses and economies. Barnes et al. [17]
management literature marks digital marketing importance for SMEs’ entrepreneurs
as the digital space tool to enhance brand value and bolding, guaranteeing sales
increase, new customers creation and ensuring customer retention [23].
Investigating the covid-19 pandemic, pandemic realizations, post pandemic real-
ities alongside the strides of development in information technology over the recent
years, namely the leap of average online time consumer media behaviour, the present
study aims to determine the impact of digital marketing as a tool of marketing commu-
nications on SME’s growth and success in Bahrain. Thus, all SMEs in Bahrain may
find value in this study. It provides SMEs with a solid foundation for using digital
marketing to market and educate consumers about their goods and services. The
objective of this study is to e assess how the development of SMEs in the Kingdom
of Bahrain is impacted by digital marketing. Thus, this study may find value to all
SMEs in Bahrain. It gives SMEs a solid base on which to sell and inform consumers
about their products and services through digital marketing.
This might make it easier for customers to understand how businesses operate and
help them make better decisions while using digital media. Finally, the findings of
this study have added to the market’s knowledge about SMEs and digital marketing.
Business academics have the chance to catch up with recent research in the marketing
sector.
The findings of this study could be important for policymakers, to start. The study’s
findings will reveal the tastes of today’s consumers as well as the kinds of details
they expect from retailers. This could help numerous SMEs develop better marketing
strategies. Additionally, the findings of this study might be important for customers.
The study’s findings will demonstrate how businesses leveraged digital marketing to
become more competitive. This might make it easier for customers to understand how
businesses operate and help them make better decisions while using digital media.
Finally, the findings of this study have added to the market’s knowledge about SMEs
and digital marketing. Business academics have the chance to catch up with recent
research in the marketing sector. This is attributed mainly to the widespread use
of mobile and internet devices around the world and Bahrain, which according to
Bahrain’s governmental Telecommunication Regulatory Authority Quarterly Market
526 L. Alhalwachi et al.

Indicators Report [24] reached Mobile Penetration of 130% in Q2, 2022 supported
by Broadband Penetration of 133% both in Q2, 2022.
With instantaneous and efficient access, digital marketing has been discovered
to provide the fastest, most reaching, effective and affordable means of reach for
most businesses. Usually most small and medium businesses are at the initial stages
of growth, where awareness, interest, desire, and retention of customers are all
vital for their continuation, success and developing of sales to reach sustainable
income. Supporting this reality is the cost of digital marketing compared to tradi-
tional marketing. In the first quarter of 2018, the average Cost per Mille (CPM)
on the Google display network was $2.80 while for 2018–2019 Advertisers paid an
average CPM of $17.50 for cable TV ads at the upfronts for the season putting digital
marketing cost at 16% of traditional marketing cost. This is highly cost effective and
relatively almost highly accurate, especially when considering these digital CPMs
are for selectively chosen, narrowly targeted audiences [24].

2 Literature Review

2.1 Digital Marketing

Digital marketing has been found to be quick, extensive, and cost-effective for the
majority of firms. Although some research suggests that a company’s size may affect
how well it can use digital channels, with SMEs having the slowest adoption rates [9].
However, major businesses may have the capacity and resources needed to effectively
utilize the available digital channels and services [18].
The past decade has seen the rapid development of digital media that has prolif-
erated to the point where consumers may instantly acquire information. The promo-
tion of products or brands via electronic media is known as digital marketing. In
the marketplace, effective digital marketing combines psychology and technology.
A marketer can utilize digital marketing to combine the best aspects of marketing
with technology. However, it is argued that Digital marketing more than just another
emerging marketing channel; it is a new method to marketing that provides a unique
comprehension of consumer behaviour, even though the core principles of marketing
remain relevant [34]. To understand what such strategies are, it is easier to cate-
gorise what does not fit into the category of digital marketing. Traditional advertising
channels including print, radio, television, and billboards are not included in digital
marketing.
These channels have enjoyed tremendous success for a long time, but they are
less useful in the present era. The majority of small and medium-sized enterprises
are often in the early stages of business development, and at this point, customer
acquisition and retention are crucial to achieving a marketing objective of assuring
operational reach to clients in order to boost sales. Before the advent of the digital age,
effective and prosperous businesses relied heavily on “word-of-mouth” marketing.
The Impact of Digital Marketing on SME’s Growth and Success … 527

However, in the modern era of digital technology as a marketing tool, the marketing
strategy has expanded beyond the exchange of merely things to include the supply
of services, engagement, and connections with clients [69, 74]. The shift is made
feasible by technical breakthroughs, new marketing channels, and regular changes
to the media landscape [8].
In contrast to traditional marketing that has been given a digital boost, according
to [33, 43], digital marketing represents a new way of doing business. Numerous
scholars have pointed out the effectiveness of Digital marketing in enabling marketers
to determine and understand the extent of customers’ perceived and experienced
brand equity, digital marketing is extremely successful [75]. Utilizing digital
marketing is ultimately intended to consistently attract new clients while retaining
current ones [19].
One needs to be aware of the distinctive traits and dynamics of marketing in order
to select effective methods and techniques. Digital channels can be categorised in a
variety of ways. The pursuit of marketing is essential to the existence and success of
a business. Today’s businesses have more marketing opportunities than ever before
[11].
A corporation can use marketing to balance operations, meet responsibilities
to many relevant parties, achieve short- and long-term goals, and ultimately stay
competitive in the marketplace. The most important tool a company has to reach its
target clients is marketing.
Traditional marketing for small and medium-sized businesses relies heavily on
word-of-mouth recommendations to bring in new clients [63]. Palmatier et al. [53,
65, 70] points out that Global contemporary economy is dignified by Relationships,
technology, and networks that characterize the support and force SMEs to adapt their
marketing strategies to the global age.
Over time, a specific word related to the promotion of products and services
on digital platforms served as the model for the term “digital marketing.” Some
claim that integrating digital technology into company processes can significantly
increase sales, retain customers, and help maintain and expand brands [37]. As a
result, it qualifies as an agile technology. a system by which companies cooperate
with clients and other stakeholders to develop and sustain value for their products
and services.
Digital technologies have the potential to outperform all traditional media and
marketing communication channels, hence ensuring the marketing mix [27] In order
to carry out marketing operations utilising digital media, a variety of digital tech-
nologies have been utilised, including emails, mobile marketing, search engine
optimisation (SEO), pay-per-click (PPC), viral marketing, and social media [56, 60].
Technology-based tools make the relationship between customers and service
providers easier [53]. In terms of boosting brand identification and piqueing customer
interest, consumer-brand contact has been gradually rising [45].
Sales growth is an increase in the volume of commercial revenue generated over
time by a company firm. An improvement could manifest as higher commodity prices
and increased sales of goods or commodities [44].
528 L. Alhalwachi et al.

At another context, it could be enhanced both. Sales growth that results from
price increases may, however, be related to adjustments in inflation and hence may
not be related to genuine or true growth in product sales. But if costs continue to
stay low, that would be considered a meaningful growth in sales. The development
of the geographical business environment, the growth in the number of branches, the
expansion of the quantity of items, as well as the growth in the number of services
offered, could all contribute to an increase in sales of goods, on the other hand.
Nowadays, it seems that the traditional approach of marketing is found to have
influenced SMEs positively. As a result, a trendy alternative is called digital marketing
that has been widely recommended as a good choice for many SMEs. They will be
able to reach a larger market as a result, raising awareness of their products and
services. For small firms, it’s crucial to understand whether digital marketing will
help them increase sales of their goods in a cutthroat market. It is crucial for them to
understand whether digital marketing might affect their company by boosting sales
and product promotion. It is crucial to consider both pecking order theory and the
expansion of SMEs in terms of both their financial performance and commerce [67].

2.2 Social Media

The word “media” is derived from the plural form of the Latin word “medium,”
which is defined as a channel or means of expression. The term “social media” refers
to methods of communication in which individuals create, share, and/or exchange
information and ideas in online groups and networks [15, 35]. Facebook, Twitter,
YouTube, and Instagram are a few of the widely used social media platforms. Social
media operates as a platform for both buyers and sellers [60, 72]. Businesses can
utilize social media to develop relationships with customers, employees, commu-
nities, and other stakeholders by using social media marketing [58]. Social media
indicates Online communication platforms for social networking, photo and video
sharing, blogging, etc., including blogs and web applications, are collectively referred
to as social media [10, 35].
Social media platforms are being used by an increasing number of customers
to voice their ideas, concerns, and complaints about the items and services they
have used. Social media interactions with customers can teach us about their
purchasing patterns and shopping experiences, which will help businesses improve
their marketing and customer care [28, 35].
Businesses’ social network presence comes with increased audience communi-
cation as well as identification of their brands and services to individuals. Due to
the fact that a significant portion of the community is present on social media plat-
forms, effective marketing on these platforms enables businesses to get a competitive
edge by attracting a big number of customers and recognizing the importance of the
customer to their success.
The Impact of Digital Marketing on SME’s Growth and Success … 529

2.3 Digital Marketing and Sales

There is a large volume of published studies indicating that digital marketing and
sales are significantly related. Digital marketing guarantees that new customers are
reached and given the necessary personalized communication, raising awareness and
sales Jain [32]. Small and medium-sized businesses can use digital marketing tools
like social media, email, and the newest social technologies to spread the word about
their products. These tools are generally inexpensive and ensure simple access to
potential clients [40, 50].
The goal of social media is to attract audience or viewers into customers, to engage
the target audience by graphically showcasing the brands’ products and services.
Selling digitally is crucial for generating income. The foundation of a carefully
designed digital selling process is utilising the benefits and opportunities provided
by digital tools.
Digital marketing’s influence on the dynamics of the corporate landscape has
significantly increased during the past several years. Digital marketing technologies
can be used to measure business success using a variety of indications that business
owners gather [26, 50]. The success of digital marketing could be evaluated using
analytics, which are included in the majority of digital marketing tools [22].
Information derived through supplied data analytics aids businesses in making
future decisions with precision through communicating with customers at the right
time and price. Big data analytics and the effectiveness of digital marketing are
strongly correlated, according to the growth of intuition-driven marketing.
Digital platforms are complemented by data presence and insights, giving markets
an excellent opportunity to draw conclusions from the used data and take the appro-
priate actions [31]. Through precise measurement and performance analysis for
each campaign or advertisement created for a particular brand’s goods and services,
SMEs will continuously learn how to enhance their performance [26]. From a busi-
ness standpoint, using contact points and message dissemination to reach the target
audience is quite beneficial.
The majority of small and medium-sized enterprises are often in the early stages
of business development, and at this point, customer acquisition and retention are
crucial to achieving a marketing objective of assuring operational reach to clients in
order to boost sales. Before the advent of the digital age, effective and prosperous
businesses relied heavily on “word-of-mouth” marketing. However, in the modern
era of digital technology as a marketing tool, the marketing strategy has expanded
beyond the exchange of merely things to include the supply of services, engagement,
and connections with clients [69, 74].
The shift is made feasible by technical breakthroughs, new marketing channels,
and regular changes to the media landscape [8].
Sales growth is an increase in the volume of commercial revenue generated over
time by a company firm. Increased sales of goods or commodities as well as greater
commodity prices are examples of improvements [44]. In another circumstance, it
might be better for both parties.
530 L. Alhalwachi et al.

Sales growth that results from price increases may, however, be related to adjust-
ments in inflation and hence may not be related to genuine or true growth in product
sales. But if costs continue to stay low, that would be considered a meaningful growth
in sales. The development of the geographical business environment, the growth in
the number of branches, the expansion of the quantity of items, as well as the growth
in the number of services offered, could all contribute to an increase in sales of goods,
on the other hand.
The traditional methods of marketing seem to be no longer relevant nowadays.
As a result, many SMEs have been advised to consider a well-liked option known
as digital marketing. As a result, they will be able to reach a wider audience and
increase awareness of their goods and services. It’s critical for small businesses
to know whether digital marketing will boost their product sales in a competitive
industry [59]. They must know whether digital marketing could benefit their business
by increasing sales and product promotion. According to [67], it is critical to take
into account both pecking order theory and the growth of SMEs in terms of both their
financial performance and commerce. This study focuses on how digital marketing
affects small and medium-sized businesses’ sales in Bahrain.

2.4 Relationship Between Digital Marketing and SMEs

Although it gives a wonderful incentive, SME’s often find it difficult and problematic
as digital technologies continue to evolve and be applied [46]. Certain potentials
that show SMEs’ dedication to leveraging newly emerging digital technologies that,
in the past, were dominated by larger firms demonstrate a change in dynamics,
encouraging them to test their potential in the global market and other competitive
business environments they compete in [47].
Small and medium-sized businesses (SMEs) undoubtedly face resource
constraints, which force them to be innovative when spending money on or imple-
menting marketing tactics with the sole purpose of expanding their target audience
or projecting their brand [46]. Currently, the use of an efficient digital marketing
strategy is necessary for their organization to expand moving forward because it
is substantially less expensive than traditional marketing. When done effectively,
marketing content on digital platforms may be quite efficient financially for SMEs
[12, 51].
When used effectively, reputable digital marketing channels like social media,
blogs, and viral marketing can interact with a wide range of audiences, guaran-
teeing new target interest, and building strong relationships with clients and pertinent
stakeholders [4].
Using various media, digital marketing ensures effective engagement with poten-
tial clients and perceived investors [25]. The following information highlights the
evidence that SMEs can gain from adopting a digital marketing business plan in
relation to [29].
The Impact of Digital Marketing on SME’s Growth and Success … 531

• Develop brand awareness

• Increase sales
• increase online conversation rate
• cut marketing costs
• boost customer engagement
• Influence purchasing decisions
• produce leads
• track return on investment.

2.5 Effects of Digital Marketing in SMEs

2.5.1 Growth of Company

Businesses in the SMEs business category have a very excellent growth prognosis to
digital marketing [64]. SMEs may successfully represent and advertise their brands
through relevant internet media thanks to digital marketing approaches, which helps
them achieve sustainable success [13, 39].
By appropriately exhibiting the brand products and services, they have become
recognized as the most significant method of reaching a larger audience [64]. The
basis of small and medium-sized businesses’ growth is digital advertising, which
is also a practical approach to manage spending without necessarily reducing the
visibility of products and services [13].
The planned creation of awareness and the appropriate fusion of effective digital
marketing strategies and patterns can ensure the competitive, thorough, and financial
success of SMEs organisations [64]. The importance of frequent communication
between the company and its clients should be emphasised. Business owners cry
for aid from digital marketing solutions to boost conversation rates because this is
crucial to evaluating a particular marketing campaign’s performance. Adopting a
digital marketing plan makes sure that business knowledge expands, revenues rise,
and new clients are acquired, all of which support the business objectives overall
[31]. 2016.

2.5.2 Brand Recognition

Labels and icons are less noticeable than brands. They represent consumer expecta-
tions as well as perceptions of the brand’s products and services as a result, the brand
has a genuine existence in the thoughts of consumers [41]. As a result, a successful
brand has a high level of market dependability, which demonstrates that consumers
have some relative influence over the brand [38].
Brand recognition is influenced by how well the products are linked. It’s crucial
to have a memory trail that shows a customer’s capacity to remember and iden-
tify a brand under various circumstances. Increasing brand recognition is the main
532 L. Alhalwachi et al.

marketing goal [6]. Digital marketing is essential for brand visibility. Through inno-
vation, the consumer experience, and contacts with the consumer, digital marketing,
which is made possible by technology, raises awareness [37].
Organisations may validate the value of creating a strong online presence by
adding the essential network and marketing deployments by firms [66]. Marketing
is recognised for its revolutionary impacts on businesses and subsequent dramatic
impacts on brand consumers. Customers must always find it simpler to interact with
businesses. SMEs benefit from social media and other digital marketing tools that
help them create stronger communities, networks, and brands [36].
Brand names can have a big impact on customers through this technique, according
to study [5]. It is necessary to strike a balance between branding activities and the
creation of a framework for organising and implementing a technological and digital
brand presence [71]. By building relationships with them through digital marketing
and sharing their own thoughts when communicating with potential customers, SMEs
can affect the perceptions of current customers of the business [42].

2.5.3 Building Trust

Building consumer trust is essential for SMEs to maintain customer loyalty [55].
As with everyday consumption, trust is a key factor in brand purchases. It imprints
the customer’s memory with a lasting impression. Building consumer trust is crucial
for SMEs to remain viable because, according to [43], consumers are more likely to
make repeat purchases when they have confidence in a brand [21].
Digitalized communication channels have a major effect on buying decisions,
they boost brand trust [57]. Digital marketing enables SMEs to stay in touch with
customers frequently, building relationships in the process. According to [1], through
web-based networking platforms, SMEs can increase their investment in visibility
obtain significant advantages and encourage competition utilising strategies for
digital marketing.
By using new digital platforms, Customers can now monitor corporate operations
and offer input on new digital channels. The two-way communication method makes
a significant contribution to customer brand trust [2]. To improve customer trust in the
brand, SMEs must comply with privacy and security laws. One of the key discoveries
was that, according to [62] referenced in [37], is that users placed greater trust in the
nature of the internet than in the confidentiality and customization of their perceived
value as individuals.
A revolutionary platform, digital marketing allows a whole customer experi-
ence, from product information to helping customers. Using a variety of knowl-
edge, customer engagement, and organized resources to assess consumer desire and
behaviour provides a way to spot new trends, consider novel ideas, and provide future
projections [25, 64]. Customers are engaged by digital marketing, which encourages
them to engage with the brand online [73].
The popularity of digital marketing, social media marketing, and search engine
marketing is rising as technology develops. Since digital marketing mainly relies
The Impact of Digital Marketing on SME’s Growth and Success … 533

on the internet and the number of internet users is growing quickly, it has profited
the most. Consumers are altering how shop, and they prefer digital marketing to
traditional marketing. This study focuses on how digital marketing affects small and
medium-sized businesses’ sales in the Kingdom of Bahrain.

3 Hypothesis

RQ 1: What impact does digital marketing have on small and medium-sized

businesses in terms of consumer engagement, brand awareness, and brand trust?
RQ 2: What impact does digital marketing have on the expansion of small and
medium-sized businesses?

4 Research Methodology/Population and Sample Size

The primary data used in this study was gathered through a standardised question-
naire. Along with statistics on SMEs’ increased sales and use of digital marketing, the
data also includes information on entrepreneurs and business features. A total of 180
respondents received were randomly sampled from registered small and medium
businesses in the Kingdom of Bahrain between the month of July and July and
September 2022. Data were collected between the months of November 2022 and
January 2023. The data collected were analyzed using percentages, frequency counts,
and regression analysis.
The demographic and sample size of the questionnaire has been analysed while
considering any sample has an impact on how boldly the study’s conclusions can
be drawn. Population, according to Sekaran and Bougie (2010, 61–84), refers to
complete groups of individuals, occasions, or interesting objects that the researcher
desires to study. The demographic of interest in this study is the Kingdom of Bahrain,
which was selected via the internet due to accessibility and ease. The researchers
believe it is necessary to work with only the SMEs engaged in commercial activity
in order to have a vivid sample size and to draw a broad generalisation about the
adoption of digital marketing because the study’s goal is to examine the impact of
digital marketing on the growth of SMEs.
534 L. Alhalwachi et al.

5 Results and Discussion

5.1 Characteristics of Business Firms

Data describing the business enterprise is presented in the table below. On the type or
form of business run by sample firms, 42.9% are partnerships, and 57.1% are limited
liabilities companies. The result also shows that 50% have annual sales between
300,000 BD and 500,000 BD; 25% have sales turnover above one million BD; 12.5%
of the firm’s annual sales between 100,000 BD and 300,000 BD and equally between
300,000 BD and 500,000.
Half of the firms are between 300,000 BD and 500,000 BD before digital
marketing adoption. The highest percentage of business (42.9%) firms earn between
50,000 BD and 200,000 BD after digital marketing adoption, 28.6% of the firms
earn above one million, and 14.3% earn between 100,000 BD and 400,000 BD.
By implication, there are changes in value after the adoption of digital marketing.
Descriptive analysis of years of business experience denoted by years of business
operation shows that 14.3% have between 1 and 5 years of experience; 85.7% have
been operating in the business for more than 5 years (Table 1).

Table 1 Characteristics of business firms

Variables Classifications Percentage
Type of business Sole proprietorship None
Partnership 42.90%
Limited Liability Company 57.10%
Total
Number of employees Less than 5 14.30%
Between 5 and 20 42.90%
Between 21 and 50 14.30%
More than 100 28.60%
Total
Annual sales after digital adoption Between 50,000 and 200,000 BD 42.9%
Between 200,000 and 400,000 BD 14.3%
Between 400,000 and 1 million BD None
Above 1 million 28.6%
Years of business operation Less than 1 year None
Between 1 and 5 years 14.30%
More than 5 years 85.70%
The Impact of Digital Marketing on SME’s Growth and Success … 535

5.2 Analysis of Digital Marketing Adoption in SMEs

Results in this section show the various digital options used by business firms in
the Kingdom of Bahrain, such as emails, social media marketing, mobile marketing,
search engine optimization, pay-per-click, and online advertising. The results show
that 44.4% of the respondents strongly agreed that e-mail marketing is used to
promote businesses. The response is corroborated by 23% who agreed that e-mail
marketing is used as a digital marketing strategy. However, 22.22% do not subscribe
to the use of email as a digital marketing option while 33.33% agreed that email
marketing has increased sales revenue in business. The use of mobile marketing is
supported strongly by 55.55% of the respondents as most of the firms depend on the
usage of mobile marketing. Additionally, only 11% were not sure about the usage of
mobile marketing as a digital marketing option.
In Bahrain, social media marketing is more adopted by respondents as 66.66%
strongly agree to use social media marketing as a digital option for promoting this
business, and 50% of the firms indicated that the use of digital marketing added value
to their sales. Search engine optimization option in digital marketing is supported by
33%. However, only 22.20% thought that the usage of search engine optimization
does not promote their business to that extent.
The use of Pay-Per-Click in the digital marketing business in Bahrain is supported
by 44, and 12% of the respondents and below did not support the use of Pay-Per-Click.
Approximately 50% and above supported online advertising as a digital marketing
option, and 10% disagreed with the use of online advertising as a digital marketing
strategy.
The estimated effect of digital marketing adoption on sales improvements in SMEs
is different from one digital marketing option to another, many of the respondents
thought that email as a digital marketing tool does not significantly contribute to sales
growth, this was similarly observed for mobile marketing; however, 44% indicated
that search engine optimization has increased the sales revenue in business, this
percentage was equal to the online advertisements as well. The use of pay-per-click
can contribute towards sales growth by only 22% [68].

6 Conclusion and Recommendations

There is a need to increase education on digital marketing in the Kingdom of Bahrain

for small- and medium-sized business owners. Such education could be by improving
the educational curriculum for the primary and secondary levels, as well as offering
courses for small and medium enterprise businesses.
Digital marketing is essential as it aligns with the way consumers make purchasing
decisions, the study revealed the positive impact of online digital marketing on small
and medium businesses as well as the performance of the business. Digital marketing
can help customers to increase new customer base, profit, sustainability and creating
536 L. Alhalwachi et al.

brand image on the market. Social media platforms are highly preferred by small busi-
nesses; additionally online digital marketing is highly impacting various functions
of the businesses and mainly small businesses.
All interested parties must use many digital technologies as part of their marketing
strategy in order to increase sales of SMEs products. Monitoring the effects of digital
marketing at different sales levels is necessary to develop the right policies and ensure
the long-term success of SMEs.

7 Limitations and Suggestions for Future Research

The study’s main findings were based on SMEs in Bahrain with a small number of
respondents, which may have led to a different outcome or set of findings. Due to
time constrain the researchers were unable to conduct interviews to address the issue.
Therefore, a qualitative research could be considered in the future studies.
Due to this difficulty, it would be dishonest to draw a generalized conclusion or
viewpoint that would apply to all SMEs, but the study does reveal trends among the
SMEs that took part in the research project and were addressed.
Future study in this area is recommended and in particular researchers can gather
data from SMEs that are active on both a small- and large-scale. Chief executives
and marketing managers of businesses are knowledgeable about useful informa-
tion and frequently willing to provide researchers with material that is pertinent to
their research. Finally, researchers in the future can do comparable analyses in more
nations with comparable industries. For such research, this might assist produce more
accurate data and a wider viewpoint.
A limitation in getting a wider representation or respondents’ validation before
drawing any conclusions is implied by the fact that interviews have been performed.
Due to this difficulty, it would be dishonest to draw a generalized conclusion or
viewpoint that would apply to all SMEs, but the study does reveal trends among the
SMEs that took part in the research project and were questioned.

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The Concept of Ijarah and Ijarah
Muntahia Bittamleek in Sudanese
Islamic Banks
Omer Eisa Omer Fadul, Yousif Abdelbagi Abdalla, Adel Sarea,
and Azam Abdelhakeem Khalid

Abstract The aims of this study to review and analyze the concept of Ijarah and
Ijarah Muntahia Bittamleek (IMB) in Sudanese Islamic banks. In conducting this
study, the researchers used descriptive analytical methodology and the inductive
method, as well as the comparative method to compare FAS No. 8 to IAS-17 in terms
of accounting treatments. In addition, the applied method was used for the practical
side of the study, which was based on financial reports from Sudanese Islamic banks.
According to the study, the main difference between the two standards is that FAS
No. 8 focuses on the legal aspect of financial transactions, whereas IAS-17 focuses
on the economic aspect. The study also discovered that Sudanese Islamic Banks were
committed to applying FAS No. 8 in terms of accounting measurement, but not in
terms of financial report recognition, presentation, and disclosure. The study helps
Sudanese Islamic banks apply FAS No. 8 in terms of recognition and accounting
disclosure. The analysis of the Ijarah idea and Ijarah Muntahia Bittamleek (IMB) in
Sudanese Islamic banks is pioneered in this study.

Keywords Ijarah · Accounting standards · Islamic finance · Conventional lease ·

Ijarah Muntahia Bittamleek

O. E. O. Fadul
Department of Accounting, Faculty of Economics and Commercial Studies, University of Nyala,
Nyala, Sudan
Y. A. Abdalla
Department of Accounting, College of Business Administration, University of Sharjah, Sharjah,
UAE
Department of Accounting and Financial Management, School of Management Studies,
University of Khartoum, Khartoum, Sudan
A. Sarea
College of Business and Finance, Ahlia University, Manama, Bahrain
A. A. Khalid (B)
Department of Accounting and Finance, Faculty of Business Management and Professional
Studies, Management and Science University, Shah Alam, Selangor, Malaysia
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 541
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_40
542 O. E. O. Fadul et al.

1 Introduction

Product innovation is the major driver of competitive advantages among Islamic

banks and finance. The focus was initially on creating financial infrastructure.
Nonetheless, a significant percentage of focus must go towards meeting client
demands by providing a range of goods and services. IBs use a variety of financial
instruments by including contracts that have had their structural design significantly
altered to include Shariah compliance requirements [5]. Ijarah is an innovation in
Islamic finance, where it is the substitute for the traditional leasing product. Islamic
finance has to adhere to Islamic principles where interests are prohibited. Businesses
are adopting Ijarah broadly where it is a well-known choice for the financing of
asset acquisition. Islam permits this form of transaction as evidenced by the Quran
and Hadith. The conventional and Islamic contracts for leasing differ due to their
fundamentals. Islamic leasing is a distinctive agreement where it involves the amal-
gamation of two forms of contracts, whereby leading to legal and Shariah concerns.
Lease is recognized as the main financial tool in both conventional and Islamic FIs [3–
5]. This is because it is flexible and has a various economic benefit to owners. Thus,
this paper intends to make a comparison between conventional and Islamic leasing
practices through a review on FAS No. 8 (Ijarah and Ijarah Muntahia Bittamleek)
against IAS No. 17 (leases). Analytical study is also conducted for the underlying
concepts: accounting measurement, recognition, and disclosure under each standard
in the books of leasor and lease [4].
Ijarah is an important financial source to Islamic and other Institutions. There-
fore, it is significant that the financial statements disclose sufficient data to their
users. Based on the above, it is this study’s objective to review and analyze Ijarah
and IMB from the accounting perspective. This research attempts to answer the
following question: Is there any significant differences in accounting convention in
operating Ijarah and Ijarah Muntahia Bittamleek under FAS No. 8 and IAS No. 17?
The subsequent section presents literature review on the concepts of Ijarah and Ijara
muntahia Bittamleek. This is followed by hypothesis development and explanation
on the connection with past research. The next section explains the methodology of
this research. The final section provides the results, and concludes.

2 Literature Review

2.1 Concept of Ijarah

Theoretically, Ijarah is an agreement where a party gains a benefit in exchange for

another party’s services, and asset utilization. Academics of four Islamic schools
(i.e. Maliki, Shafie, Hanafi and Hanbali) have each defined Ijarah. Briefly, all the
definitions agreed that Ijarah refers to the contract where one utilizing the services or
benefits and there are compensations as a return. Ijarah’s literal meaning is renting
The Concept of Ijarah and Ijarah Muntahia Bittamleek in Sudanese … 543

an object. From Islamic fiqh, Ijarah is applicable in two scenarios. The first is that
Ijarah means the salaries paid in exchange of the work done. In this form of Ijarah,
the worker is known as “ajir”, whilst “mustajir” is the employer. The second scenario
from Islamic jurisprudence perspective, i.e. an asset’s usufruct is shifted to another
party as an exchange of rentals.
On the other hand, Ijarah as an alternative to English term” lease” can be defined
as a contract between a lessee and lessor where within certain timeframe the lessee
is entitled to utilize the lessor’s asset. In exchange, the lessor receives periodic rental
payment from lessee. The second meaning of Ijarah under Islamic jurisprudence is
similar to ‘leasing’, an English word. Here, “mujir” refers to the lessor whilst “musta-
jir” is the lessee; and “ujrah” is the rental payment. Nonetheless, Ijarah and lease are
used as similar concepts in different jurisdictions. Followings are the classifications
of Ijarah.

2.2 Operating Ijarah and IMB

Ijarah according to [1] benchmark can be categorized as IMB and operating Ijarah.
The main condition of the categorization is whether the leased property’s title is
promised to be transferred to the lessee once the lease expires. AAOIFI stipulates
that if there is such promise, then it is IMB. However, it there are no promises
made, then it is operating Ijarah. The promise of transferring the possession title
may be done by: (a) gift (no consideration is given in title transfer), (b) the contract
specifies certain amount of consideration, (c) transfer done before lease duration
ended is subject to the amount equal to outstanding Ijarah periodic payments, or
(d) progressive ownership transfer (sale) of leased property. Meanwhile, IAS-17
categorizes leasing into two types: (1) operating lease; and (2) finance lease, in
accordance to the degree of rewards and risks involved in the ownership transfer
between lessee and lessor. All other leases not fulfilling the condition are deemed to
be operating lease. Meanwhile, IAS-17 stipulates that a lease is categorized as finance
lease or operating lease depending on the contract’s substance instead of its legality.
The substance over form concept can be explained as follow: In the form where a
lessee may not eventually obtain the leased property’s legal ownership, but in reality,
financially and economically the lessee stands to benefit and bear the accompanying
risks for the use of asset, then in substance the transaction is a finance lease [11, 15].
Thus, for finance lease, since the lessee will assume the risk and rewards the leased
property is assumed to be the lessee’s fixed asset even though the lessee may or
not eventually be the property’s registered owner [14–16]. Meanwhile for operating
lease, the lessee’s balance sheet could not reflect the leased property as the risks and
rewards associated to ownership are not transferred to the lessee.
It must be noted that operating Ijarah is similar to operating lease, and the IMB
seems similar to the finance lease, whereby the lessee will eventually hold the title
legally. However, it is still different because IMB is considered as two agreements
544 O. E. O. Fadul et al.

being combined; Ijarah runs over the leasing duration, and sale and purchase agree-
ment once the leasing duration is over. Furthermore, the substance over form concept
does not apply in Islamic lease. If the substance over form concept applies in Islamic
lease, it will imply that the asset is in full control of the lessee. However, for Ijarah,
the lessee only has the right to the benefits (usufruct) of using the asset but not the
right of ownership to the leased asset. Thus, the substance over form concept is not
consistent with the Shariah according to AAOIFI.

2.3 Types of Ijarah Muntahia Bittamleek

FAS No. 8 states that IMB has various categories. All the categories are aiming at
passing the asset’s ownership to the lessee; if not it is called operating lease contract.
The categories IMB agreements are: (i) IMB via gift (title is transferred without
consideration). In this type of lease the lessee assumes the ownership without any
consideration through a gift agreement entered upon the lease’s final payment, or
a gift deed that is subject to Ijarah periodic payments being settled. The ownership
transfer is automatic where no new agreement is to be entered and no additional
payment is required except for the Ijarah periodic payment be settled [6]. (ii) IMB is
done by transferring the ownership (sale) once the lease has ended through a certain
consideration. The contract encompasses:
(a) A feasible Ijarah agreement in which the rental payment and duration are
established. When the Ijarah duration ends, the agreement is no longer valid.
(b) A pledge into entering a sale agreement is made upon the expiration of Ijarah
contract should the lessee agrees, and to pay certain consideration. We must
note that upon IMB expiration the ownership transfer is either done with no or
minimal consideration by assuming that there will be higher rental earned by
the lessor against comparable property where in both scenarios the lessor will
regain the asset’s cost via Ijarah periodic payment [10].
(c) IMB via ownership transfer (sale) upon the final payment mentioned in the
contract. The agreement incorporates Ijarah contract and the pledge of entering
into a sale agreement. The sale agreement mentions the lessee’s purchase price
(purchaser) upon the Ijarah expiration. Therefore, once the lessee paid the price,
the property is sold and ownership is changed to the purchaser (lessee). He will
then assume the right to benefit and dispose the property through any lawful
means.
(d) IMB via ownership transfer (sale) before the ending of the lease at a price equal
the Ijarah’s outstanding periodic payment. This includes the lessor’s pledge that
ownership will be transferred to the lessee whenever the lessee requests during
the Ijarah duration at an amount equal to the outstanding periodic payment.
(e) IMB via graduate ownership transfer (sale). The contract has a condition stating
that the lessor agrees to progressively transfer the ownership until the lessee
gained full ownership of the asset. The asset’s price will be ascertained by
The Concept of Ijarah and Ijarah Muntahia Bittamleek in Sudanese … 545

dividing the duration of the Ijarah agreement where the lessee will possess
portion of the asset equal to the payment made. There has to be a sale agreement
for every portion purchased by the lessee. Additionally, the rental payment must
reduce in view that the lessee is now owning a larger portion of the leased
property.
It is the intention of the study by [13] to analyze the adherence of Malaysian
Islamic banks to the AAOIFI standard No. 9 in regard to Ijarah financing. The study
had used the semi-structured interview where open-ended questions were adopted.
For content analysis, the interviews were recorded and transcribed. It was found that
the modern Ijarah financing is flawed. This signifies that there is a slight variance
from the AAOIFI benchmark. This research assists the Malaysian IBs in reducing, if
not eliminating the discrepancies between the guidelines issued by [9] and AAOIFI
benchmark for Ijarah financing. Additionally, this study is the first to examine the
Ijarah financing practices among Malaysian IBs based on the AAOIFI benchmarks.
Study conducted on (Ijarah Muntahia Bittamleek under Shariah Standard No.
9 and Islamic Accounting Standard No. 8) [1, 2] intends: to know the historical
background of IMB as a financial product used as source of fund by Islamic banks,
practical reality of the IMB through Shariah standard No. 9 and Islamic Accounting
Standard No. 8., and compare the theoretical concepts between Ijarah and practical
application in Islamic banks. The study depends on descriptive approach in reporting
the historical background of IMB, and Inductive Method to know about the Shariah
standard and accounting standard issued by AAOIFI. Moreover, applied method was
also used to propose a model that shows the stages of Ijarah processing in Islamic
banks.
A study was conducted by [11] on Accounting for Ijarah Muntahia Bittamleek
from Islamic perspective in Islamic Banks. The study aims to know the legitimacy
of IMB contracts, and their adaptation with the opinion of Islamic Jurists. The study
also wants to know the accounting problems in Ijarah contracts and their treatments
from Islamic perspective through an analytical study of International Accounting
Standard and Islamic Standard. The researcher found that leased assets under IMB
contracts must be capitalized in the lessee’s books and depreciation be calculated.

2.4 Sale and Leaseback: Operating Ijarah and IMB

The type of Ijarah commonly used is in the scenario of a purchaser buys a property
and leases it back to the seller. Juristic rule stipulates that the sale agreement should
not be subject to lease agreement. This is not to breach the rule that a contract’s
execution not to be dependent upon another contract’s execution. IAS-17 mentions
that in determining whether a lease is a finance lease or operating lease, the substance
over the form is examined. IAS-17 prescribes that if a lease satisfies one out of five
situations, then a lease must be classified as finance lease. These five situations are
as follows:
546 O. E. O. Fadul et al.

(a) At the conclusion of the lease duration, the lessee is to assume the asset’s
ownership.
(b) The lessee is given the choice of purchasing the property at a certain cost. The
price is anticipated to not exceed the fair value on the date when the choice is
executable.
(c) The lease duration of the asset is at least 75% of the asset’s economic life [11].
(d) During the lease’s establishment, the minimum payment’s present value is at
least at the leased property’s fair value where it is equivalent to, or more than
90% of the property’s fair value.
(e) Leased properties with distinctive characteristics are to be used by the lessee
where no significant changes being done [11, 12].
Previous study on Islamic banking: Ijarah and Conventional Lease was the one
conducted by Ameer and Ansari [7]. It was the paper’s objective to study on the
elimination of interest among FIs, and the Islamic banks’ definition of acceptable
activities. In other words, the objective of the paper was on the analysis of interest-
free transactions among businesses. The study revealed that there are correlations
between IB and the determinants of conventional and Ijarah leases. The researchers
utilized questionnaire as instruments in data collection, and the data were entered
and analyzed by using software, i.e. SPSS and Excel.
Shariff and Rahman [15] explored the nature of Ijarah accounting and made
comparison between IAS-17 & FAS-8. It was discovered by the study that there are
significant dissimilarities in the characteristics of Ijarah and conventional leasing.
The study examined the level of acceptability of FAS-8 in Malaysian FIs. Their
surveys indicated that FAS-8 acceptance level was not high among Malaysian FIs.
Atmeh and Serdaneh [8] examined the dissimilarities between IMB and conven-
tional leasing through two dimensions, i.e. the contracts’ condition and structure,
and accounting approach. The study argued that the AAOIFI’s accounting approach
violates the matching principle and lacks honest presentation. The study also analyzed
IMB (through gift) accounting framework of AAOIFI where the Ijarah duration is
significantly shorter against the leased property’s useful life. Zafar [17] highlighted
on the shortcoming of Ijarah for vehicle. The research employed a genuine case
where a customer obtained a car financing through Ijarah contract from an Islamic
FI. The customer had then abused this contract. The research urged for more studies
to be done on Ijarah agreement in terms of vehicle leasing. Additionally, it stated
that there should be consideration for down payment in addition to satisfying other
conditions. It also mentioned that the deposit amount or down payment for the Ijarah
vehicle contract to not exceed the threshold of 40% [4, 13] made a comparison
between Islamic and conventional leases using Islamic and conventional accounting
standards as guidelines. The study also enlightened the financial report users and
the public about the dissimilarities between Islamic and traditional leases. The study
differs from other research as this paper included all the dimensions of Standard 8
in relation to IMB and Ijarah, and made a comparison against IAS-17 [1].
The Concept of Ijarah and Ijarah Muntahia Bittamleek in Sudanese … 547

3 Hypotheses Development

To answer the questions previously mentioned in research’s problem; the researchers

assume the following hypotheses:
1. There are significance differences in accounting treatments (measurement and
recognition) for operating Ijarah under FAS No. 8 as compared to IAS-17.
2. There are significance differences in accounting treatments (presentation and
disclosure) for operating Ijarah under FAS No. 8 as compared to IAS-17.
3. There are significance differences in accounting treatments for IMB (financing
lease) under FAS No. 8 compared to IAS-17.
4. The differences in accounting treatments has an impact on the financial
statements.
5. Islamic banks in Sudan are applying the FAS No. 8 issued by AAOIFI with regard
to accounting recognition, measurement and disclosure for the Ijarah and IMB.
The researcher adopted descriptive analytical methodology and Inductive method
for this study. The comparative method was also used to compare FAS No. 8 against
IAS-17 concerning the accounting treatments. Meanwhile, the applied method was
used for the practical side of the study in Islamic banks in Sudan. Both primary
data and secondary data were used. Primary data were obtained from the financial
statements of the Sudanese Islamic banks. Secondary data obtained from books,
previous research and studies, and the internet were used to build the theoretical
framework of this study.

4 Results and Discussions

The review on the annual reports of United Capital bank (UCB) for the year 2015
shows the following: the bank disclosed in note 6 (investments in securities) the
amount of SDG 64,548,000 as Ijarah Sukuk; which represents certificates of Ijarah
Sukuk assets for Sudan Electricity Distribution Company (Shahamah Certificate).
These were then leased back to the Ministry of Finance under operating Ijarah.
The bank also disclosed in note 7 (Financing to customers) a total amount of SDG
101,180,752 for Ijarah. The amount of Ijarah comprised of the following:

SDG
Cost of leased property 74,794,780
Cost of leased motor vehicles 18,962,432
Deferred rental 7,423,540
Total 101,180,752

The UCB also disclosed notes to the following: (i) note 22 (Income from Invest-
ment in securities) the amount of SDG 3,538,232 as income from shasha certificates,
548 O. E. O. Fadul et al.

(ii) note 23 (income from finance to customers) the amount of SDG 5,002,879 as
income from Ijarah. (iii) Note 27 General & Administrative expenses) the amount
of SDG 4,483,857 as Ijarah expenses.
There is an agreement between the two standards (FAS.8 and IAS-17) in rela-
tion to accounting recognition and measurement for operating Ijarah; but with the
exception to initial direct costs (under FAS-8 these costs must be recognized by the
lessor and lessee, but under IAS-17 these costs must be recognized by the lessor
only). There are differences between the two standards (FAS-8 and IAS-17) in rela-
tion to accounting treatments for Ijarah Muntahia Bittamleek contracts. The main
difference between two standards is that, the FAS No. 8 focuses on the legal form of
the accounting process, while the IAS-17 focuses on the economic substance rather
than the legality. The accounting treatments for each standard have an impact on the
financial statements and decisions of the users of the financial statements. This is
because the capitalization policy of leased assets can affect the liquidity and prof-
itability ratios. The Sudanese Islamic Banks are committed to applying FAS No.
8 in relation to measurement accounting, but were not committed in applying it in
recognition and disclosure accounting.
The study is limited by the followings: The study examines the practices confined
to year 2017. The findings of study are limited to Islamic banks in Sudan and cannot
generalized to other Islamic countries. Based on the results of this study, the main
recommendations and implications are as follows: First, the requirements for presen-
tation and disclosure in the financial statements must be expanded, whether for Ijarah
Muntahia Bittamleek or operating Ijarah to fulfil the requirements of financial reports’
users. Second, some of the accounting treatments contained in standard No. 17 must
be adjusted to conform to Islamic standard No. 8. Third, Islamic banks and Islamic
Institutions must apply the accounting treatments contained in Islamic accounting
standard No. 8. Fourth and finally, full compliance with standard and disclosure
requirements will make the financial statements more relevant and useful.

References

1. Accounting and Auditing Organization for Islamic Institutions. Financial Accounting Standard
No. 8 (Ijarah and Ijarah Muntahia Bittamleek)
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and IMB)
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meetings and independence matter? ISRA Int. J. Islamic Financ. 11(2), 303–321 (2019)
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of the Islamic banks in gulf cooperation council countries. In: 8th Global Islamic Marketing
Conference. International Islamic Marketing Association, Turkey (2017)
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2.0 applications and the firm value of Islamic financial institutions in the GCC countries. J.
Islamic Mark. 13(9), 1988–2005 (2021)
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7. Ameer, M.H., Ansari, M.S.: Islamic banking: Ijarah and conventional leasing. Dev. Country
Stud. 4(9), 126–129 (2014)
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Manag. 7(18), 49 (2012)
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10. Hassan, K., Kayed, R.N.. Oseni, U.A.: Introduction to Islamic Banking & Finance: principles
and Practice. Pearson Education Limited. (2013)
11. Mary Kelly, BBS, FCCA & Martin Kelly, B.sc. Accounting for leases-IAS 17
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technology. In: ICGER 2021. Lecture Notes in Networks and Systems, vol. 423. Springer,
Cham (2022)
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analysis on the practices of Islamic banks in Malaysia. J. Risk Financ. Manag. 13(2), 29 (2020)
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(1991)
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Antecedents of User Satisfaction
in the Context of Accounting Information
Systems: A Proposed Framework

Mahmoud Al-Kofahi, Aws Al-Okaily, Mohammad Enaizan Al-Sharairi,

Abdalmuttaleb Al-Sartawi , Manaf Al-Okaily, and Hamza Alqudah

Abstract Researchers and professionals are very interested in the value of

accounting information systems (AIS) in developing countries. Academics agree
that information system (IS) user satisfaction are crucial to the survival of any IS.
Hence, it is crucial to examine the impact of several factors including technological
factors on user satisfaction, as more and more developing countries adopt and deploy
such systems. In order to examine the factors affecting AIS user satisfaction from
the standpoint of Jordanian users, this paper provides a framework adapted from the
Seddon and IS Success models. The proposed framework theorises that informa-
tion quality and system quality are the factors that could potentially affect perceived
usefulness and user satisfaction, while perceived usefulness can potentially affect
user satisfaction in the context of Jordanian small and medium enterprises (SMEs).
By addressing questions pertaining to the theoretical and practical elements of AIS
user satisfaction, this study adds to the existing body of literature on the application
of IS. Additionally, the report offers suggestions for policymakers and stakeholders
in developing countries on how to ensure AIS effectiveness.

Keywords AIS · IS success model · Jordan · Seddon model · User satisfaction

M. Al-Kofahi · H. Alqudah
Faculty of Administrative and Financial Sciences, Irbid National University, Irbid, Jordan
e-mail: [email protected]
A. Al-Okaily
Graduate School of Business, Universiti Sains Malaysia, 11800 Penang, Malaysia
M. E. Al-Sharairi
Finance Department, College of Business, Amman Arab University (AAU), Amman, Jordan
A. Al-Sartawi (B)
Ahlia University, Manama, Bahrain
e-mail: [email protected]
M. Al-Okaily
School of Business, Jadara University, 733 Irbid, Jordan

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 551
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_41
552 M. Al-Kofahi et al.

1 Introduction

The use of IS is expanding quickly in the modern, globalised world. It is currently

impacting many sectors of life and acting as a development tool for people, organisa-
tions, and governments in general [1]. The level of IS utilisation that individuals and
organisations use determines how well they function and their capacity to withstand
competitive pressure. Without the end-users’ acceptance, adoption, and utilisation
of the system, IS cannot produce positive results [2–9].
According to several writers [10–16] the relationship between IS and user perfor-
mance is one of the most complex, pervasive, and unpredictable, especially in the
domain of AIS [17].
The AIS gathers, stores, processes, and records data to provide usable information
to decision-makers [18]. It consists of personnel, rules and regulations, information,
software, hardware, internal controls, and security measures. The system’s goal is to
raise employee and organisational performance.
For organisations, AIS provides a major benefit that does not exist in non-
integrated departmental IS [19–22]. An AIS database is a location where all business
transaction data are keyed-in, documented, evaluated, tracked, and reported. Such
system offers a single corporate view of the business which includes all functions and
divisions. The need for and the scope of interdepartmental cooperation and coordi-
nation grow as a result of this united perspective. It helps businesses reach their goals
of improved communication and responsiveness towards all stakeholders [4, 23, 24].
If implemented properly, AIS would be advantageous for the user [25]. With the
use of AIS, users can rapidly and easily share financial data, enable management to
perform financial control tasks and receive timely decision-making assistance, time
savings, enhanced job performance, greater staff productivity, and job ease are all
indicators of the effectiveness of the AIS [26–28]. Proper AIS usage also makes it
easier to extract the precise data needed to carry out various operations and functions.
AIS is one of the ISs with the fastest growth among SMEs as it has consistently
been a substantial component in private sector organisations [14, 29–35]. Even though
its importance has been extensively studied and that there are many managerial data
on this subject, the success rate of AIS initiatives in developing nations is very low [4,
36]. A few developing nations, like Jordan, have been experiencing growing failure
of AIS projects, which is now a common phenomenon. Consequently, AIS failures
have caused SMEs to lose millions of dollars annually, which in turn prohibit their
achievement of crucial goals.
Without the end-users’ acceptance, adoption, and utilisation of the system, IS
cannot produce positive results [2, 37–40]. It is widely known that IS user satisfaction
is an effective proximate indicator of IS success [18, 41–45]. Better technological
elements result in increased IS user satisfaction; in turn, user satisfaction is a key
indicator of the organization’s IS usage performance. As a result, research on the
variables that influence AIS user satisfaction is important given the expanding number
of businesses using AIS. The results have implications for raising AIS’s rate of
success in developing nations.
Antecedents of User Satisfaction in the Context of Accounting … 553

Accordingly, this study seeks to analyse AIS user satisfaction from the perspective
of employees. Therefore, this research constructs a success model of AIS based on
the works of [46, 47] to investigate the factors affecting AIS user satisfaction from
the perspective of employees. Pitt et al. [42, 48] may give a robust explanation for
AIS user satisfaction in the Jordanian context. The accuracy of this interpretation is
higher than those that are based solely on the IS Success Model or Seddon model
[18, 42–45].
Drawing upon the theories, we postulate five hypotheses. The IS Success Model is
used to hypothesize how technological factors (i.e., information and system quality)
explain AIS user satisfaction. Based on the [33, 38, 42, 49] model, we hypothesize
how technological factors (i.e., information and system quality) explain perceived
usefulness, and how perceived usefulness explains AIS user satisfaction [18, 42–45].
There are six sections in this paper. This current section highlights important
issues related to AIS user satisfaction, which drives the objective of this study. The
determinants of AIS user satisfaction based on the underlying theories, the proposed
study framework, and relevant literature evaluation are elaborated in the following
sections. The planned research approach and instrument development are illustrated
in the fifth section. Finally, the last section concludes the whole proposal.

2 Literature Review and Theoretical Background

Al-Hattami [18, 42–45, 50] provides a comprehensive and all-encompassing defini-

tion of IS success. Although several models for evaluating IS performance have been
developed, the IS Success Model [41] is widely considered as the best.
Eventually, due to the shortcomings of [49], which were exposed by [51], the
re-specified model of IS Success was created [18, 42–45]. Al-Okaily et al. [33, 38,
42, 49] had some criticisms about the previous model; he claimed that confusion
arose from the concept’s inception due to a conflation of the process and causal
models. The “Use” of IS, for example, could kick off a chain of reactions that results
in “User Satisfaction”, “Individual Impact”, and “Organisational Impact”. However,
the model could be interpreted as causal if one considers the success of the system as
hinging upon how it is implemented. It is presumed that the extent to which a system
is used is proportional to its degree of success or failure.
Seddon’s revised and expanded model, in which the process steps have been
removed, was then presented. Both the behavioural and IS success models make
up the model’s causal component. The “consequences of IS use” bridges the gap
between the two theories. Seddon hoped that the model would provide a more solid
theoretical basis from which to examine the ties between various IS success elements.
Seddon’s model classifies the factors into three categories namely: (1) indicators
of information and system quality, (2) a person’s general opinion of the overall useful-
ness of the IS success model, and (3) the value of the final variable which quantifies
the overall advantages of employing IS [33, 38, 42, 49]. Seddon hypothesised that
IS use is only behavioural and not a genuine evaluation of the performance. He then
554 M. Al-Kofahi et al.

Fig. 1 IS success sub-model of [18, 42–45] (partial)

substituted “perceived usefulness” with “use”. Seddon proposed three groups namely
individuals, organisations, and society as recipients of the IS’s positive externalities
in his discussion of the third factor. Al-Hattami [18, 42–45] IS Success Sub-Model
is shown in Fig. 1.
Accordingly [18, 42–45], revised their original IS Success model nearly a decade
later in response to criticisms in earlier works. Studies on this topic have been
conducted by several researchers [33, 52, 53] Fig. 2 depicts the current version
of the IS Success model.
Both models above have had considerable influence on studies of IS success.
Numerous empirical studies have used the two models to examine the success of
IS in various contexts [54–56]. For instance [40], investigated the efficacy of tax IS
from the perspective of Greek workers. In addition [18, 42–45, 46], evaluated the
effectiveness of e-Government IS in Serbia from the perspective of employees using
the IS Success model [18, 42–45].
Since this study seeks to analyse the satisfaction of users who had previously
used AIS, DeLone and McLean’s [37] and Seddon’s [38] models are deemed the
best fit. Four components from these models are employed to investigate the factors
influencing user satisfaction because of utilising AIS. Nevertheless, we exclude some

Fig. 2 Updated IS success model [18, 42–45]

Antecedents of User Satisfaction in the Context of Accounting … 555

factors (e.g., services quality, IS use, and net benefits) from these models owing to
the goal of this study.

3 Hypotheses

3.1 Information Quality

The desired qualities of an IS output are determined by the quality of the information
[57–59]. It concerns the calibre of the data generated by the system and the applica-
bility of that data to the user [50]. Information quality is pertinent to the IS model due
to its positive impact on user satisfaction [9, 22, 23, 60, 61] and perceived usefulness
[62, 63]. Alansari and Al-Sartawi [46] studied the Serbian e-Government system’s
performance from the employees’ standpoint and discovered a favourable relation-
ship between information quality and e-Government user satisfaction. Floropoulos
et al. [52] suggested that higher information quality would increase perceived utility
for enterprise IS. By offering current, accurate, and trustworthy information, this is
made feasible. It is expected that information quality will positively influence AIS
user satisfaction and perceived usefulness in the context of Jordanian SMEs. Hence,
this study proposes that:
H1. There is a positive relationship between information quality and AIS user
satisfaction.
H2. There is a positive relationship between information quality and perceived
usefulness.

3.2 Systems Quality

System quality includes measures of the IS itself and makes up the desired features of
an IS [43, 47, 64]. The perceived utility of the system and the degree of end-user satis-
faction would probably be directly impacted by system quality [22, 65]. This is since
these impressions can capture attitudes and ideas about the effort necessary to interact
with the system [52, 66]. Users would be able to take advantage of performance gains
more easily if a system were of excellent quality, which would boost perceptions of
the system’s usefulness [52, 67]. Accordingly, to enhance perceived usefulness and
user satisfaction, the relevant parties would need to develop the system to assure
greater accessibility, flexibility, usability, and user-friendliness [24, 68]. Thus, this
study proposes that:
H3. There is a positive relationship between system quality and perceived
usefulness.
H4. There is a positive relationship between system quality and AIS user
satisfaction.
556 M. Al-Kofahi et al.

3.3 Perceived Usefulness

In the context of IS success, according to [18, 42–45], perceived usefulness is the

extent to which a person thinks that employing a certain system has improved either
their own performance at work or the performance of their group or organisation.
Whereas user satisfaction reflects the customer’s delight or dissatisfaction with the
IS [31, 69–74]. The perceived usefulness of IS, according to [16, 36] is a significant
determinant of user satisfaction.
The IS’s success is determined by how well it serves its users; therefore, it stands
to reason that users who view the IS as valuable would be more satisfied with it
[75, 76]. The effective usage of IS makes it easier to extract precise information
needed to carry out various tasks, whilst saving time and effort in the process [52,
56]. Hence, users will be more likely to utilise this system and be happier with it if
they believe they have attained a high degree of benefits from utilising it [20]. The
fact that perceived usefulness would guarantee user satisfaction has been supported
by previous studies [34, 51, 77–81]. Therefore, this research suggests that:
H5. There is a positive relationship between perceived usefulness and AIS user
satisfaction.

4 Proposed Research Model

Based on the previous IS theories, the IS Success Model [18, 42–45] and Seddon
model [33, 38, 42, 49] provided the theoretical foundation for the present model.
Based on the goal of this study, it was decided that some aspects of these models
(e.g., service quality, IS use, and net benefits) would not be included in the design
and development of the proposed research model. Nevertheless, the model is thought
to be ideal for gauging AIS user satisfaction in the Jordanian context. This study’s
proposed research model is depicted in Fig. 3.

Fig. 3 The proposed theoretical research framework

Antecedents of User Satisfaction in the Context of Accounting … 557

5 Research Methodology

5.1 Proposed Method

The hypotheses and model will undergo empirical testing. To evaluate the structural
link between the variables identified in the research model, this study will use a
quantitative research approach. With the use of partial least squares (PLS) path
modelling, the study’s hypotheses will be put to the test. The needed will be collected
all at once for this study, which suggests a cross-sectional design. All AIS users in
Jordanian SMEs, independent of their profession or job description, are the proposed
population of interest. Employees who are now employed by SMEs and who use AIS
in their regular activities make up the respondents to this survey.

5.2 Instrument Development

To this research, a questionnaire will be developed based on the four factors of the
proposed theoretical framework. Items for measuring each factor will be identified
from previous studies. Six questions developed by [45, 79] will be used for assessing
Information Quality (IQ); four items from [80] for assessing System Quality (SQ);
four items from [56] for assessing Perceived Usefulness (PU), and four items from
[9] for assessing User Satisfaction (US). All of the sections will be graded on a seven-
point Likert scale, with (1) denoting ‘totally disagree’ and (7) denoting ‘totally agree’.
Questions regarding the respondents’ demographics (gender, age, education level,
and occupation) will also be included in the survey.

6 Conclusion

The current study is focused on Jordanian SMEs’ AIS user satisfaction. The IS
Success Model [18, 32, 42–45] and Seddon model [33, 38, 42, 49] serve as the
theoretical foundation for the model developed in this work. The model theorises that
perceived usefulness influences user satisfaction and that information and system
quality may also have an impact on perceived usefulness and user satisfaction. Thus,
information must be gathered from SME employees who use AIS. The research’s
conclusions will serve as a helpful manual for many stakeholders and policymakers
in developing countries on how to guarantee the success of AIS.
558 M. Al-Kofahi et al.

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Consequences of Fintech
on the Profitability of Banking System

Samer Abdelhadi and Ala’ Bashayreh

Abstract Recently, technology is growing in most fields involving financial issues.

Financial technology is considered a creative innovation that attracts more customers
and enhances the profitability and performance of many banks. This study revises the
literature review concerning the role of financial technology (Fintech) in enhancing
the performance of banks. By reviewing previous studies, the results of most of the
studies confirmed the effect of Fintech on bank performance measured by ROA and
ROE, including studies about the banks of Jordan. It was found that Fintech can really
improve the performance of banks measured by return on assets (ROA) and returns
on equity (ROE). The study recommends that the commercial banks in Jordan should
pay attention to new financial innovations and increase their dependence on financial
technology because of the positive impact on profitability and to enhance excellence
in customer service to raise the level of satisfaction with banking services.

Keywords Fintech · Technological innovation · Banking system

1 Introduction

Due to the contributions of Financial technology (Fintech), which has been able
to significantly alter the financial services industry, the world has today undergone
a qualitative transition from a monetary economy to a non-monetary economy. In
comparison to conventional methods, it offers services in a quick, simple, and more
affordable manner to a large number of people and businesses. The key compo-
nent of financial development is becoming Fintech, which focuses on the actual
implementation of cutting-edge technologies in the established financial sector [1].

S. Abdelhadi (B) · A. Bashayreh

The Hashemite University, Zarqa, Jordan
e-mail: [email protected]
A. Bashayreh
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 563
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_42
564 S. Abdelhadi and A. Bashayreh

Fintech has the real power to change the structure of financial services, making
them faster and cheaper. It is more secure and transparent, especially for the segment
of the population that does not deal with the banking system. Fintech is a broad
phrase that primarily refers to businesses that use cloud-based tools and other sorts
of technologies to advance the banking and financial industries [2]. As the rapid
development of financial services and the provision of innovative financial solutions
that simplify financial operations provided by banks contribute greatly to achieving
financial stability, and they also play a fundamental role in shaping the future of
transactions and future services.
Banks, being the main engine of the economies of countries, and in order to main-
tain this position, are working to ride the wave of financial technology by renewing
their basic structures based on the requirements of ways to keep pace with this
development. Commercial banks are being transformed toward digitalization and
intelligence as a result of the growth of Fintechs. In light of the opportunities and
difficulties presented by the growth of Fintech, banks should boost their investment
and research in the sector as the “new” topic of fintech development and the “old”
representation of traditional finance [1]. Improving their performance has become
an urgent necessity to face the wave of competition imposed by financial technology
companies, and without improvement and development in performance, banks will
disappear.
According to the authors of [3]. It is now feasible to utilize electronic documents
or papers in place of traditional paper documents in order to use money. Money is
no longer confined to traditional money, which is in the form of paper support. This
is the end result of technical advancements that created a demand for this distinct
sort of money. One of the key economic factors is the demand for money, which has
three main drivers: transaction, speculation, and precaution.
Despite major improvements in payment technologies and their widespread diffu-
sion over the past decades, cash transactions still account for a large share of overall
payment transactions, both in terms of total number and value. Thus, the current study
tries to review the previous literature on the modern term in the world of economics
and finance, which is financial technology. In addition, it presents the evolution short
summery of digital financial services in the banking system of Jordan and traces the
performance and profitability.

2 Literature Review

Due to globalization and the technology revolution, the banking system has definitely
changed over the past several decades, and this is reflected in many of the banking
services that are offered by that industry. To date, the development of digital money as
a form of technological evolution and a hallmark of this era has prompted numerous
studies on the role that this technological advancement plays in accelerating economic
growth through its effects on various economic sectors. As a matter of fact, Fintech
became a serious challenger since it dominates traditional financial services where
Consequences of Fintech on the Profitability of Banking System 565

clients are progressively moving towards carrying out their banking transactions
via electronic applications and smart solutions [4]. Previous studies reveal that the
opportunities offered by financial technology to the financial and banking system
can enhance performance, providing better and more convenient banking services to
clients. Besides, there is a potentially significant effect on banking system stability
due to increased competitiveness, and the role of regulatory technology can upgrade
compliance processes in commercial banks.
The linked studies were analyzed, and it was discovered that they were divided
into those that support the favorable correlation between Fintech and bank perfor-
mance and those that refute it. The research that support the substantial association
will be presented in the current study, followed by those that do not. For example,
authors of [5] found a higher positive effect of Fintech on digital financial perfor-
mance than the effect of traditional services. Ref. [1] showed that banks’ profitability
(ROE) has a positive bidirectional cooperative relationship with the development of
Fintechs. Authors of [4] confirmed the significant effect of Fintech on enhancing the
performance of banks and thus financial inclusion. Ref. [6] conclude that Fintech
provides a variety of high-quality financial services at a reasonable cost, which will,
in turn, enhance comprehensive development. In fact, adopting Fintech products and
improving financial services lead to improve profit, market share, clients’ confidence,
and competitiveness. Authors of [7] revealed that the coordination of the Modern
Bank and the Fintech is assumed to promote financial inclusion. During the COVID-
19 outbreak, Ref. [8, 9] concluded that the impact of mobile money on financial
inclusion is positive. Ref. [10] tested the effect of financial innovation on financial
inclusion in a larger group of countries and find a significant positive effect.
Authors of [3] researched how electronic money affects the demand for money and
discovered a favorable effect that improves performance. Also, authors of [2] discov-
ered a major impact of Fintech technologies on the banking industry’s profitability.
Authors of [11] concluded due to the divide between technology and humans, digital
financial services have a favorable impact on the performance of large banks but a
detrimental one on small banks. Ref. [12] found that financial technology influences
the performance of banks positively in Lithuania. Authors of [2] concluded that
certain banks’ profitability is significantly impacted by Fintech advances. Besides,
Authors of [13] discovered that using technology helps banks function better. Ref.
[14] found that policies that liberalize banking to include more branches and ATMs
could spur greater growth in emerging economies like those of Eastern Europe. Ref.
[15] suggested that managed institutions are significantly more effective at managing
raw data that can be digitalized. Authors [16] pointed out that Islamic financial instru-
ments offered via Fintech can likewise enhance financial performance. Authors [17]
argued that digitizing financial services can boost financial inclusion and enhance
the overall performance of financial institutions. Ref. [18] indicated that banking
applications are a common component of online financial services and can benefit
the banking sector by accelerating and strengthening transactions. According to Ref.
[19], digitization gives banks the chance to enhance client interactions, empower
client decision-making, and implement new business models in a more efficient and
creative manner.
566 S. Abdelhadi and A. Bashayreh

Authors [20] show that our understanding of money is evolving and is now very
different from traditional money, which central banks no longer control or produce.
But it has the same functions as money and has the same specializations. Additionally,
users are able to access and transfer electronic money without the use of middlemen
or central banks. Internet codes are used to create and safeguard electronic money.
Although the matrix codes are complex, there are still concerns about their security.
Some nations have made it a policy to forbid their use. Authors [21] argued that
e-money, as a network good, has the potential to grow into a significant form of
payment in the future. Such a change would affect how effectively and successfully
monetary policy is implemented. If the usage of e-money significantly reduces the
need for central bank reserves, the operational aim of the central bank will need to be
adjusted, and monetary and fiscal policy would need to be more closely coordinated.
On the other hand, and unexpectedly, Ref. [22] show that Fintech decreases the
profitability of banks and asset quality. Ref. [23] argues that the effect of Fintech on
financial inclusion is still not clear because Fintech solutions are not yet dependable
and unspecified in the future but are mandatory to disbar people from bank services
in MENA countries. Also Ref. [24] noticed that Arab countries still lag behind many
countries in the world in adopting financial inclusion, due to the inability to deliver
many formal financial services to those who are unable to access them. Moreover,
the study argues that digital technology is beneficial in enhancing financial inclu-
sion in these countries. Ref. [25] revealed that the present regulation of Fintech in
the regions of EU, USA, and India is unsuitable and may lead to negative impacts
on the world financial services sector such as deception of cybersecurity, contra-
vention of data privacy, and use Fintech services for illegal purposes. Bank Negara
Malaysia (BNM)’s Governor Datuk Muhammad Ibrahim warned of potential revenue
disruption from Fintech innovations in Malaysia.

3 Theoretical Framework

By relying on big data, AI, blockchain, cloud computing, and other technologies,
Fintech can minimize transaction costs, eliminate information asymmetry, lower the
entrance threshold, extend service areas, and reduce transaction risks. Banks must
benefit from the new technologies that Fintech provides. For instance, they might
promote the modernization and change of their business practices, which would help
them become somewhat more profitable.
In addition, as finance and technology have become more integrated, new financial
models have emerged that provide consumers of finance with more options and lower
investment thresholds. As a result, the new financial models indicated above have a
negative influence on the market share, business growth, and profitability of banks.
Fintech has both positive and bad implications for the profitability of commercial
banks, according to the analysis shown above. Depending on the level of development
at which it occurs, Fintech’s total impact on bank profitability varies. Therefore, by
Consequences of Fintech on the Profitability of Banking System 567

utilizing Fintech, banks can benefit more from lower input costs and increased bank
profitability.

4 Fintech in the Banking System of Jordan

Since the creation of the Central Bank of Jordan in 1964, the banking industry has
developed. A total of 12 commercial banks, 3 Islamic banks, and 8 international banks
now operate in Jordan. The number of Jordanian banks’ branches also expanded in
2021, reaching 830. Commercial banks, investment banks, and specialty banks were
added to the banks’ main diversification of operations. Additionally, the methods of
banking work and the kinds of services that banks offer their customers underwent
a notable qualitative evolution (Table 1).
In order to find an incubator for entrepreneurs and to enhance and encourage
innovation and development in the field of financial technology in a way that fosters
competitiveness in the market for digital financial services, the Central Bank of
Jordan announced the commanding guide for the Fintech Regulatory Sandbox in
2018. Strong cyber security is used to provide digital financial services quickly,
efficiently, and safely. However, banks may face significant risks as a result of their
growing reliance on financial technology, particularly risks related to compliance,
operations, and electronic dangers. The following elements are included in electronic

Table 1 Jordanian banks operating in Jordan as at the end of 2021

# Name of the bank Establishment date
Commercial Banks 1 Arab Bank 1930
2 Ahli Bank 1955
3 Amman-Cairo 1960
4 Jordan Bank 1960
5 Housing Bank 1974
6 Jordan Kuwait 1977
7 Arab Jordan Investment 1978
8 Commercial Bank 1978
9 Investment Bank 1989
10 Arab Bank Corporation 1989
11 Al Bank 1991
12 Societe Generale 1993
13 Capital Bank 1996
Islamic Banks 1 Islamic Bank 1978
2 Arab Islamic 1997
3 Safwa Islamic Bank 2009
568 S. Abdelhadi and A. Bashayreh

Table 2 Trends of ROA and

Years ROA ROE
ROE in the Jordanian Banks
(2010–2021) 2010 0.9 6.2
2011 0.9 6.2
2012 1.0 6.9
2013 1.2 8.3
2014 1.4 9.2
2015 1.1 7.7
2016 1.2 8.1
2017 1.3 9.1
2018 1.2 9.6
2019 1.2 9.4
2020 0.6 5.1
2021 1.2 9.5
Source CBJ

money: The number of Visa Cards issued by each bank, the total credit facilities
granted by each bank, the number of automated teller machines (ATMs), and the
bank’s branches’ number ratio.
In Jordan, Fintech services include Visa Cards, automatic teller machines (ATMs),
mobile banking (banks’ applications), mobile payments, …etc. These services are
vulnerable to expansion, development, or/and replaced by other newer services.
According to most of the studies that examine the performance of banks, it was
found that Fintech can really improve the performance of banks measured by return
on assets (ROA) and returns on equity (ROE) (Table 2).
According to the above table, the average value for ROA was 1.1 with a maximum
value of 1.4 in 2014, and a minimum value was 0.6 in 2020 due to the COVID-19
pandemic with a standard deviation reaching 0.2. On the other hand, the average
value for ROE was 1.1 for the period of the study. The maximum value was 9.6 in
2018 while the minimum value was 5.1 in 2020 with a standard deviation reached
1.5.
The profitability of the banking system (as assessed by both ROA and ROE)
increased continuously until 2019, but it declined in 2020. The banks’ use of credit
provisions as a COVID-19 risk hedge is what has caused this significant drop. Along
with delaying debt payments due to clients affected by the epidemic and rescheduling
a portion of loans given to the afflicted economic sectors without additional penalties
or late payment interests, this is done. Thus, ROA and ROE both decreased before
rising to normal levels in 2021 (See Fig. 1).
Consequences of Fintech on the Profitability of Banking System 569

Fig. 1 ROA and ROE (2010–2021)

5 Conclusion

In conclusion, the benefits, drawbacks, and effects of Fintech on bank perfor-

mance have recently received more attention. A few studies were conducted to look
into how Fintech is affecting bank performance across the globe. Looking back at
earlier research, the majority of studies—including those about Jordanian banks—
confirmed the impact of Fintech on bank performance as assessed by ROA and ROE.
Due to the positive effects on profitability, the study suggests that Jordan’s commer-
cial banks pay attention to new financial innovations, increase their reliance on
financial technology, and improve customer service excellence to increase customer
satisfaction with banking services.

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The Effect of Voluntary Disclosure
on Stock Liquidity: Evidence
from Jordan

Mohammad Abu Nassar and Zaina Safwan Rahahleh

Abstract This study aims to examine the effect of voluntary disclosure on stock
liquidity. The study sample consists of 23 insurance companies listed on the (ASE),
over 10 years (2010–2019), yielding 230 firm-year observations. To test the study
hypotheses, the quantitative research design was used, and cross-sectional analysis
was performed using Ordinary least square (OLS) regression. Voluntary disclo-
sure was measured using a self-constructed voluntary disclosure index, while stock
liquidity was measured using two variables; share turnover ratio and daily bid-ask
spread. The findings revealed that voluntary disclosure has a significant negative
effect on share turnover ratio, and thus on stock liquidity. Furthermore, voluntary
disclosure has no significant effect on stock liquidity as measured by the Daily bid-ask
spread.

Keywords Voluntary disclosure · Stock liquidity · Daily bid-ask spread · Share

turnover ratio

1 Introduction

For decades, investors and other external stakeholders have been used financial state-
ments as the primary source in order to examine company’s financial performance
and position. Also, financial statements are the main source that the investors rely
on when making decisions whether to invest in the firm or not [1].
Having access to information is crucial when making investment decisions [2].
Individuals invest more in firms with clear and concise financial disclosures [3].
As several stakeholders require greater disclosure not only of the performance but
to the human capital, training and voluntary details, many companies all over the
world have started reporting on these issues [4]. In order to provide more adequate

M. Abu Nassar (B) · Z. S. Rahahleh

Accounting Department/Faculty of Business, University of Jordan, Amman, Jordan
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 571
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_43
572 M. Abu Nassar and Z. S. Rahahleh

information to investors and other financial statements users, firms use a mixture of
mandatory and voluntary information disclosure.
The role of voluntary disclosure is to assist the investors and other stakeholders
to gain a better and clearer understanding of the firm’s operation. According to
[5] there is a positive effect of voluntary disclosure on firm performance and the
interest of shareholders, the study also found negative relationship between the lack
of clarity and ambiguity in reporting on the value of the firm. Prudent investors make
investment decisions based on the information at their disposal.
As much as investors need clear and adequate information, they also look for stock
liquidity before taking their investments decision, which also became a world-wide
concern since the global financial crisis [6]. Mentioned that stock liquidity can affect
the investor’s expected return and firm value. In addition, [6] found that stock liquidity
has a negative effect on the cost of equity and therefore the firm value. According to
[7] high stock liquidity can improve investment efficiency and help both currently
existing investors and potential acquirers in their investments decisions because high
stock liquidity means that they can easily start or quit a business (buy or sell) when
they feel dissatisfied with the currently management decisions.
This study attempts to investigate whether stock liquidity using Daily bid-Ask
spread and share turnover ratio are affected by voluntary disclosures. Voluntary
disclosure was measured using a self-constructed voluntary disclosure index (VDI),
and that was discussed in details in the following section, taking into consideration
that companies listed on the (ASE) are required to adhere with specific mandatory
disclosure requirements in their annual reports issued under the Securities Law and
its related instructions. The annual reports of insurance companies in Jordan start
with the chairman letter, followed by the board of directors’ report which consists
of twenty-one mandatory items that exhibited in specific sequence according to the
disclosure guideline issued by the Jordan Securities Commission (JSC), and then
followed by the corporate governance report prepared according to the corporate
governance instructions issued by the JSC No. 2 of 2006 and No. 18 for 2017.
Finally, the Audited financial reports and their notes and clarifications, prepared in
accordance with the “Instructions of the Accounting Policies to be Adopted by the
Company and the Forms Required to Prepare the Financial Reports and Statements”
issued by Insurance Commission under the Insurance Regulatory Decision No. (8)
Of 2007.
The main objective of this study is to investigate the effect of voluntary disclosure
on stock liquidity. And since there are two measures in this study for calculating
stock liquidity, the objective of the study is divided into two parts, first; to investigate
the effect of Voluntary disclosure on stock liquidity measured by share turnover ratio.
Second; to investigate the effect of Voluntary disclosure on stock liquidity measured
by Daily Bid-Ask spread.
The reminder of this paper is structured as follows: The second section provides
an overview the theoretical framework and development of the study’s hypotheses.
The third section presents the methodology. Section four discusses the empirical
results. The fifth and final section contains the conclusions.
The Effect of Voluntary Disclosure on Stock Liquidity: Evidence … 573

2 Theoretical Framework and Hypotheses Development

The information disclosure is one of the critical concerns and topics in the accounting
field, as this information summarize the performance, the managerial side, the oper-
ations efficiency and the human resources management. Prior studies showed that
firms’ disclosure is negatively related to the level of information asymmetry among
equity investors, that occurs when one or more investors possess greater knowledge
about the firm’s value than other uninformed investors or non-investment professional
[8]. Therefore, the presence of that asymmetric information can lead to create the
existence of two types of costs: the adverse selection costs, and the transaction cost
[9]. In other words, the gaps in disclosure lead to increase the cost that results from
introducing adverse selection into transactions between the firm and its shareholders
or among potential buyers and sellers which also lead to decrease stock liquidity [10].
The stock liquidity is one of the problems that should be taken into consideration
especially when investors’ trading skills vary from one investor to another; some
investors may have poor risk assessment, weak analytical skills and they may lack to
required trading experience, these factors act as real challenges that face the investors
and may influence their willingness to invest in the firms and therefore reducing the
stock liquidity. Therefore, firms reinforce those informed and uninformed investors
background by providing them with more disclosed information in order to enhance
their knowledge and awareness about the nature of the business and the firm’s oper-
ations and environment which may increase the market demand and therefore stock
liquidity. Theoretically, stock’s liquidity refers to the ability of the investors to buy
or sell their shares of a stock rapidly without substantially impacting the stock price.
Low liquidity stocks may be difficult to sell and may cause the investors high losses if
they sell the shares. Furthermore, because stocks are riskier, investors will be unable
to find a market for their securities, which may prevent them from buying or selling
their shares whenever they want. Shares that are difficult to sell in an illiquid market
carry a liquidity risk since investors cannot easily convert them into cash at the time
of their need, which force investors to hold the shares or sell them with losses. In
order to address investor hesitancy in holding shares within illiquid markets, compa-
nies opt to issue their capital at a discounted rate. However, this approach ultimately
leads to reduced proceeds and an elevated cost of capital [11, 12]. Deduced that more
information disclosure lead to increase market liquidity and hence, reducing cost of
capital, which will help to encourage investment by individuals who may have future
liquidity needs.
Therefore, the less voluntary disclosure will lead to ambiguity appearance, and
also will mislead the investors on several issues that may not be required within the
mandatory disclosure regulations, which in turn will reduce the investor’s willingness
to buy the stocks in order to avoid unknown risks, and that will decrease the demand
of the stocks which means lower stock liquidity. Voluntary disclosure encompasses
information that a company chooses to disclose on its own accord, and the degree to
which it is done plays a crucial role in enhancing and elevating transparency levels
[13]. Voluntary disclosure is an important communication tool that plays a major
574 M. Abu Nassar and Z. S. Rahahleh

role in enhancing the image of the company and its prospects [14, 15]. Voluntary
disclosure has a positive effect on reducing the information asymmetry and conflict
of interest, it also increases the confidence of external investors as it also allows the
companies to maintain their financial position and get the appropriate information
that may be needed [14]. The high voluntary disclosure leads to a lower cost of debt
that a company has, due to the negative relationship between them according to the
study of [1].
The voluntary disclosure plays a role in enhancing the value of the firm that
can be directed through two ways, first; it enables the shareholders to obtain better
expectations about the financial performance of the company. Second; voluntary
disclosure negatively affects the cost of capital, and by reducing the cost of capital,
thus increases the firms value [16].
Over time, voluntary disclosure has gained increasing interest from stakeholders,
so the American Institute of Certified Public Accountants (AICPA), Financial
Accounting Standards Board (FASB), and Canadian Institute of Chartered Accoun-
tants (CICA) have issued reports to motivate companies to voluntarily disclose
nonfinancial information [17].
The interests differ between the internal management and the external parties
of the company. Since each party seeks to maximize its own interest the most,
conflicts may arise between these parties [18, 19]. Managers may not be obligated to
disclose all data that belong to the company, even with the existence of regulations
the full disclosure of all non-financial data is not guaranteed, because the manda-
tory disclosure regulations include the minimum amount required to be disclosed to
outside parties to assist them in making decisions about their investments. Essen-
tially, management has the difficult task of deciding as to how much information
should be disclosed [19, 20]. There are several factors that affect the voluntary
disclosure according such as leverage, size, profit, ownership structure and board
composition [21]. Due to variations in accounting and auditing practices and proce-
dures, the impact of enhanced disclosure requirements may differ among countries.
Accounting and auditing practices that proportionate with international best prac-
tices play a major role in enhancing the quality of the information disclosed by the
company [22]. According to [23] numerous factors, both external and internal, are
believed to influence and shape the extent of corporate disclosure and transparency.
These factors include various aspects such as the characteristics of the board of
directors, audit committee, and ownership structure.
Albitar [3] focused on the voluntary disclosure practice of 124 listed companies
in ASE over the period 2010–2012 and found that the level of voluntary disclosure
in Jordanian corporate annual reports was low for the mentioned period, but the level
of voluntary disclosure was increasing year by year.
The Effect of Voluntary Disclosure on Stock Liquidity: Evidence … 575

2.1 Stock Liquidity

Stock liquidity refers to the market’s capacity to handle a large volume of securities
within a brief timeframe, with minimal impact on security prices and lower execution
costs [24]. According to [25] A liquid market is commonly defined as a market where
a substantial volume of trades occurs promptly, with minimal transaction costs and
negligible price impact. It is widely believed that the existence of stock liquidity
facilitates a seamless market performance, whereas its absence can create challenges
within the market.
Liquidity is a powerful factor affecting the equity returns, and can be described as
the costs incurred by the investor when trading, these costs are divided into explicit
costs such as bid-ask spreads, and implicit costs such as adverse price changes, and
the resulting additional costs incurred due to the difficulty of trading illiquid stocks,
investors must command premiums for holding illiquid securities [26].
Observing stock liquidity has presented challenges, prompting the development
of various liquidity measures within academic literature. According to [27] several
measurement tools have been used in previous studies in order to calculate stock
liquidity. These measures include the bid-ask spread [28], relative spread [29, 30],
effective spread [31], amortized spread [32–34], and trading volume [35].
In a liquid stock market, a trader can easily sell its shares without much impact on
the share price, while in a less liquid market, selling shares becomes more expensive
due to increase in the supply of stock that has a higher price impact [35, 36].

2.2 The Effect of Voluntary Disclosure on Stock Liquidity

According to the literature, stocks held by well-informed investors and those linked to
higher information asymmetry tend to experience a more pronounced enhancement
in stock liquidity. The underlying reasoning behind this prediction is that when traders
possess extensive knowledge, the underlying value of the stock becomes subject to
greater information asymmetry, thereby leading to more information being revealed
through portfolio disclosure [1, 12, 37].
The previous considerations lead to the hypotheses of the study:
H1: Voluntary disclosure has a significant effect on stock liquidity as measured by
the share turnover ratio.
H2: Voluntary disclosure has a significant effect on stock liquidity as measured by
the Daily Bid-Ask spread.
Population and Sample of the Study
There have been no studies examining the effect of voluntary disclosure on stock
liquidity in the Jordanian insurance sector. Therefore, the population of this study
entails all insurance companies that are listed on the (ASE). The population’s size is
576 M. Abu Nassar and Z. S. Rahahleh

23 insurance firms; the sample involves the entire population which consists of 23
firms, over 10 years (2010–2019), yielding 230 firm-year observations.

3 Measurement of Variables

This study uses two main variables; stock liquidity as a dependent variable and
voluntary disclosure as independent variable.

3.1 Dependent Variable: Stock Liquidity

Stock liquidity as the dependent variable will be measured in two ways; the first
measurement is the share turnover ratio which was calculated by dividing the total
number of shares traded over a year by the number of shares outstanding for the
year. Many studies used the turnover ratio as a proxy to measure the stock liquidity
[38, 39].
The second measurement is daily Bid -Ask spread which was measured as follows:
    
Daily Bid − Ask spread = (Ask Price − Bid Price) (Ask Price + Bid Price) 2 ∗ 100 N

while N = the number of traded days over the year.

The daily spreads are averaged to obtain the stock liquidity measures for each
year and each Jordanian insurance company [25]. Highlight that spread measures
are negatively correlated with market liquidity. That a higher value of SPREAD
indicates a wider spread and thus lower liquidity, suggesting that SPREAD is an
inverse measure of liquidity.
As utilized in previous studies such as [9, 40–43] one of the standard measures of
liquidity is the bid-ask spread, which is the difference between the lowest available
quote to sell and the highest available quote to buy [44, 45]. The daily Bid-ask spread
measure represents the cost an investor must incur to trade immediately [46].

3.2 Independent Variable: Voluntary Disclosure

This research employs a custom-made index to assess the extent of voluntary infor-
mation disclosed by companies in their annual reports. The voluntary disclosure
index (VDI) comprises a set of items that are not mandated by the statutory regu-
lations in Jordan. To ensure the credibility and accuracy of the index, measures
have been taken to establish its reliability and validity. a pilot-test was applied on
the constructed VDI using a sample of 16 insurance annual reports listed in ASE.
The Effect of Voluntary Disclosure on Stock Liquidity: Evidence … 577

Accordingly, many items were eliminated from the initial index before modifica-
tions that may be irrelevant to the Jordanian disclosure practices or inapplicable on
all Jordanian insurance companies. Using [47, 48] binary coding approach; when a
company discloses an item of information that is included in the index, it is assigned
a score of 1; otherwise, it receives a score of 0. The cumulative score reflects the
overall extent of information disclosed in the annual report by each firm. To calculate
the item-wise score, the scores assigned to various items in the score sheet of all the
companies are taken into account. Then, the total score for each company averaged
for each year, by dividing it over the total VDI items. The final index includes 6
categories with a total of 42 items, as follows:
A Voluntary Disclosure Index (VDI)

A. General information D. R and D

1. General objectives of the firm—Missions, 1. Developing new products/services
vision, objectives
2. Strategic and financial objectives 2. Automation and IT system development
3. The actions implemented throughout the 3. On-line interaction facilities (e.g., mobile
year to accomplish the corporate objectives application)
4. Web page address 4. Expanding business future plans (increasing
No. of branch)
5. Multiple language presentation for E. HR
non-financial data
6. List of branches in details (rather than 1. Recruitment info. (joining ratio; policy,
location) exams)
7. Email 2. Employee training policy
8. Ethical code or values 3. Employee appreciation or welfare (bonus
salary; insurance…etc.)
9. Summary of the annual report 4. The count of employees over a span of two
or more years
10. General outlook of the economy 5. years of experience for Executive
Management
11. Brief for the industry’s performance 6. General manager joint date
12. Images for (boards member, management, F. Board of directors
employees, events etc.)
B. Financial information and ratios 1. Shareholders that own less than 5% of
shares
1. Return on capital (ROC) ratio 2. Policy and achievements of BOD
committees
2. Liquidity ratio 3. Boards duties, responsibilities or
achievements during the year
3. Return on equity (ROE) ratio 4. Board of directors’ membership date
4. Return on investment (ROI) ratio
5. Equity to deposit ratio
6. Return on Assets (ROA) ratio
(continued)
578 M. Abu Nassar and Z. S. Rahahleh

(continued)
A. General information D. R and D
7. Asset turnover ratio
8. Diagrams (Charts) for the main financial
data
9. Horizontal Analysis for major items in the
financial statements
C. Historical financial information
1. Share price—more than 5 years
2. Solvency ratio—more than 2 years
3. Historical summary (Trend) for market
share
4. Profit or loss—more than 5 years
5. Assets—more than 2 years
6. Revenues (Premiums)—more than 2 years
7. Dividends Declared—more than 5 years

3.3 Control Variables

The following control variables was used in the study.

3.3.1 Firm Size

Firm size is considered to be an important determinant of corporate disclosure prac-

tice, prior studies support the hypothesis that disclosure is positively linked to firm
size, [49]. The natural logarithm of total assets will be used as a proxy to measure
the firm size.

3.3.2 Firm Age

Many prior studies concluded that older companies disclose more information than
younger ones, [49, 50]. The natural logarithm of Age will be used as a proxy to
measure the Firm age.
The Effect of Voluntary Disclosure on Stock Liquidity: Evidence … 579

3.3.3 Leverage

In the study, leverage is measured by calculating the ratio of total debt to equity.
Numerous studies have identified a positive correlation between leverage and
disclosure [21, 51].

3.3.4 Profitability

Prior studies document a relationship between profitability and disclosure [3, 21,
51]. Profitability measured with return on asset ratio which is the percentage of net
profit divided by total assets.

4 Regression Models

For the purpose of testing the study’s main hypotheses, two empirical models have
been developed and tested. The first model concerns the effect of voluntary disclosure
on share turnover ratio (TUROV) as stock liquidity measure, and controlled by the
firm size, age, leverage and return on assets. Thus, the first regression model is
identified as follows:

TUROVit = β0 + β1EXTVDIit + β2SIZEit + β3AGEit

+ β4LEVit + β5ROAit + eit (1)

The second regression model aims to examine the impact of voluntary disclosure
on the Daily Bid-Ask spread, which is a measure of stock liquidity. This model is
carefully structured by considering various factors such as firm size, age, leverage,
and return on assets. Consequently, the second model is formulated as follows:

SPREADit = β0 + β1EXTVDIit + β2SIZEit

+ β3AGEit + β4LEVit + β5ROAit + eit (2)

where:
TUROVit Share turnover ratio.
SPREADit Daily Bid-Ask spread.
I firm.
t year.
EXTVDIit A measure of voluntary disclosure.
SIZE Firm size is determined by taking the natural logarithm of the total asset
value.
AGE Firm age measured as the natural logarithm of the firm’s age.
580 M. Abu Nassar and Z. S. Rahahleh

LEV Leverage is determined by dividing the total debt of a company by its

equity.
ROA Return on asset measured by dividing net profit on total assets.
B0-β5 Regression coefficient.
e error.

5 Results and Discussion

5.1 Descriptive Statistics

Table 1 reports the descriptive statistics for the variables used in the study. A
minimum, maximum, mean, and standard deviation presented in the table.
Share turnover ratio and Daily Bid-Ask spread are considered the measures for
the stock liquidity which is the dependent variable of the study, the share turnover
ratio which represents the traded shares over a year by the average number of shares
outstanding for the year, range from 0 indicating that one or many companies did not
traded any shares for one or many years to maximum of 10.484, with a mean value
of 0.19418. The Daily Bid-Ask spread values range also from 0 which results from
many companies that show an equaled values for Ask price and bid price and for many
years, to 0.29179 with a mean value of 10.01188. This represents a lower spread mean
compared to some studies that were applied to the Jordanian market before, such as
[42] who studied listed companies in the Jordanian market during 2005 and found
mean spread of 2.2%; and [52] who examined non-financial Jordanian companies
listed on the (ASE) for the year 2004, and found mean spread of 5%.
The results also indicate that the mean of voluntary disclosure in the insurance
companies is 29.717%, the highest disclosure achieved by a firm is 60.465% and the

Table 1 Descriptive statistics of the study variables

Dependent Observations Mean Minimum Maximum Standard
variable deviation
TUROV 230 0.19418 0 10.4836 0.87411
SPREAD 230 0.01188 0 0.29179 0.02038
Independent variable
EXTVDI 230 0.29717 0.11628 0.60465 0.08828
Control variables
SIZE 230 7.41809 6.82661 8.04342 0.28636
AGE 230 1.45397 0.47712 1.83885 0.24792
LEV 230 1.92392 0.15889 10.05166 1.28583
ROA 230 0.00403 −0.50118 0.1583 0.06701
EXTVDI: Extent of voluntary disclosure, TUROV: Share turnover ratio, SPREAD: Daily Bid-Ask
spread, SIZE: Firm size, AGE: Firm Age, LEV: Leverage, ROA: Return on asset
The Effect of Voluntary Disclosure on Stock Liquidity: Evidence … 581

lowest value is 11.628% with a standard deviation of 8.828%. The results indicate that
there is a noticeable variation in voluntary disclosure between Jordanian insurance
companies that will be discussed in details in the next section.
For the control variables, the mean of firm’s size is 7.418, the highest value is
8.043 and the lowest value is 6.827 with a standard deviation of 0.28636, while the
mean of the firm’s age is 1.454 with a maximum value of 1.839 and a minimum of
0.47712.
As for the leverage; that indicates the ability of the insurance companies to meet
their financial obligations, the results showed a mean value of 1.924 with a maximum
value of 10.052 and a minimum value 0.15889. Finally, the mean of ROA is 00.00403,
a minimum value of −0. A maximum value of 0.1583, and with a standard deviation
of 0.1583 (Table 2).

5.2 Voluntary Disclosure Analysis

The following Table 3 shows the percentage of voluntary disclosure for each company
during the period 2010 to 2019, and the average disclosure was calculated for the
whole period for each company separately, which is shown in the table in the last
column as “AVG VDI for each company over the years”. The results shows the
variation in the extent of voluntary disclosure by the Jordanian insurance companies,
which ranges between 18% and 48%.
The Jordanian insurance companies show a variety of the level of voluntary disclo-
sure, Arab Jordanian Group Company scored the lowest level of disclosure with an
average of 18%, while the Arab Orient GIG Company received the highest level of
disclosure with an average of 48%.
The variation of the voluntary disclosure, is due to the difference in awareness
among the senior management of the companies concerned with preparing and
presenting financial statements, as some companies are only obligated to disclose
mandatory data, and their main objective is to avoid financial fines issued by the rele-
vant regulatory authorities as a result of non-compliance with the aforementioned
mandatory disclosure, and it may repeat exactly the same annual data with changing
numbers only, while some companies add and modify voluntary data in proportion
to their situation and the need of investors and other users of this data, especially
those statements that talk about the company’s achievements that distinguish it from
others in order to encourage investors to invest in the company.
The last row of Table 2 shows the percentage of voluntary disclosure for each
company during the period from 2010 to 2019, and the average disclosure for all
companies was calculated for each year separately. The results show the increase in
voluntary disclosure over the years, with the average VDI calculated for all companies
over each year starting at 25% at the start of the study period and ending at 35% at
the end of the study period.
The remarkable increase in voluntary disclosure of all companies across the study
periods can be explained by the increased awareness of the importance of voluntary
582 M. Abu Nassar and Z. S. Rahahleh

Table 2 The extent of voluntary disclosure by the Jordanian insurance companies

Company 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 AVG
name (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) VDI for
each
company
over the
years
Arab 16 16 16 16 16 19 19 16 21 21 18
Jordanian
group
Arabia 14 19 16 16 16 12 19 19 33 30 19
Holy lands 26 23 23 23 26 21 21 23 26 21 23
Jerusalem 12 14 19 14 12 12 28 44 42 42 24
Arab life 16 16 19 26 23 26 28 23 35 30 24
and
accidents
Midgulf 14 23 14 23 26 28 23 23 40 37 25
Almanara 23 26 23 26 21 23 28 28 26 28 25
Philadelphia 14 19 28 28 28 28 28 26 26 28 25
National 30 28 26 23 23 23 23 23 30 30 26
Middle east 30 28 21 23 33 33 23 21 26 33 27
Arab 23 23 28 26 30 28 28 28 28 30 27
assurers
Safwa 14 19 30 26 28 30 30 37 37 37 29
Jordan 28 28 28 28 28 35 28 30 35 28 30
French
United 23 28 28 23 30 30 33 33 35 35 30
Arab union 28 28 28 30 33 30 30 30 30 33 30
Delta 28 30 30 33 33 33 35 37 26 30 31
Alnisr 26 33 30 30 30 35 35 35 35 35 32
al-Arabiya
Islamic 28 35 26 37 30 28 30 37 44 44 34
First 26 40 40 40 40 40 35 35 42 47 38
Newton 37 35 40 40 40 42 42 42 42 40 40
Jordan 37 40 40 40 40 40 40 37 42 44 40
insurance
Euro arab 37 40 37 42 40 40 40 40 42 44 40
group
Arab orient 42 40 44 44 49 49 44 47 60 58 48
gig
AVG VDI 25 27 28 29 29 30 30 31 35 35 30
for all
companies
AVG VDI: average of voluntary disclosure index
Table 3 The correlation between dependent, independent, and control variables
EXTVDI TUROV SPREAD SIZE AGE LEV ROA
EXTVDI Pearson Correlation 1
Sig. (2-tailed)
N 230
TUROV Pearson Correlation −0.173** 1
Sig. (2-tailed) 0.009
N 230 230
SPREAD Pearson Correlation −0.072 0.136* 1
Sig. (2-tailed) 0.279 0.04
N 230 230 230
SIZE Pearson Correlation 0.519** −0.181** −0.06 1
Sig. (2-tailed) <0.001 0.006 0.361
N 230 230 230 230
AGE Pearson Correlation −0.121 −0.147* −0.081 0.035 1
Sig. (2-tailed) 0.068 0.026 0.224 0.598
The Effect of Voluntary Disclosure on Stock Liquidity: Evidence …

N 230 230 230 230 230

LEV Pearson Correlation −0.07 0.152* 0.014 −0.356** −0.005 1
Sig. (2-tailed) 0.297 0.022 0.83 <0.001 0.935
N 226 226 226 226 226 226
ROA Pearson Correlation 0.154* −0.316** −0.011 0.337** 0.014 −0.328** 1
Sig. (2-tailed) 0.019 <0.001 0.863 <0.001 0.835 <0.001
N 230 230 230 230 230 226 230
583
584 M. Abu Nassar and Z. S. Rahahleh

disclosure, in order to serve users of financial statements and facilitate the process
of obtaining the information they need. This increase can also be justified by the
positive effects of voluntary disclosure on the company, as it saves the time and effort
necessary to meet any of the shareholders’ requirements to collect the necessary data
that they may need or request.

5.3 Pearson Correlation Matrix

Pearson correlation matrix was used in order to examine the nature and direction
of association between the independent variable (EXTVDI), the dependent variables
(TUROV, SPREAD), and the control variables (SIZE, AGE, LEV, ROA) in the study,
as shown in Table 4.
According to the results presented in Table 3, the voluntary disclosure has a
significant negative correlation with share turnover ratio (TUROV) (R = −0.173,
sig 0.009) indicating that the higher the voluntary disclosure the lower the stock
liquidity measured by share turnover ratio and vice versa. These findings differ
from the results of [53] who found that there is no significant relation between the
amplitude of voluntary disclosure and daily stock turnover rate.
The voluntary disclosure EXTVDI has a significant positive correlation with firm
size (SIZE) (R = 0.519, sig < 0.001) indicating that the higher the size the higher
voluntary disclosure and vice versa. That result is consistent with results of other
previous studies such as [53, 54]. The Voluntary disclosure EXTVDI has a significant
positive correlation with firm’s return on asset (ROA) (R = 0.154, sig = 0.019)
indicating that the higher the ROA the higher voluntary disclosure and vice versa.

Table 4 Regression results for model (1): The dependent variable is Share turnover ratio
R Square 0.144
Adjusted R2 0.124
F 7.390
Sig <0.001
Model Beta T Sig Tolerance VIF
(Constant) 0.578 0.564
EXTVDI –0.155 –2.073 0.039 0.696 1.438
SIZE 0.018 0.223 0.824 0.592 1.688
AGE –0.162 –2.564 0.011 0.971 1.029
LEV 0.055 0.796 0.427 0.807 1.239
ROA –0.278 –4.079 0.000 0.837 1.195
EXTVDI: voluntary disclosure, TUROV: Share turnover ratio, SIZE: Firm size, AGE: Firm Age,
LEV: Leverage, ROA: Return on asset
Dependent variable: Share Turnover
The Effect of Voluntary Disclosure on Stock Liquidity: Evidence … 585

In this study there is a significant positive correlation between the share turnover
ratio as a stock liquidity measure and the daily bid-ask spread in the Jordanian
insurance market (R = 0.136, sig = 0.04), meanwhile the spread is an inverse stock
liquidity measure. That is, the relationship between the two variables logically should
be negative, as the increase in the share turnover ratio of the stock means an increase
in liquidity and thus a decrease in the daily bid-ask spread.
The share turnover ratio (TUROV) has a significant negative correlation with the
company size (SIZE) (R = −0.181, sig = 0.006). The result is inconsistent with [9].
However, there are several ways to measure a firm’s size; the measure may influence
the correlation result; for example, if the size is measured using the log of capital,
the result may differ.
The share turnover ratio (TUROV) has a significant negative correlation with the
company age (AGE) (R = −0.147, sig = 0.026). The result is consistent with the
study of [22]. The share turnover ratio (TUROV) has a significant positive correlation
with leverage (LEV) (R = 0.152, sig = 0.022).
Stock liquidity measured by Daily Bid-Ask spread (SPREAD) does not have
significant correlation with any of the variables EXTVDI, SIZE, AGE, LEV and
ROA. Also, The Voluntary disclosure EXTVDI does not have significant correlation
within (AGE) and (LEV).

5.4 Regression Analysis and Hypotheses Testing

Multiple Regression analysis has been conducted for the purpose of examining the
effect of voluntary disclosure on share turnover ratio and daily bid-ask spread taking
the effect of the control variables into consideration. Two empirical models have
been developed and tested.

5.4.1 Model (1)

This model is designed to examine the effect of voluntary disclosure on stock liquidity
using TUROV which represents share turnover ratio, and controlled by the firm size,
age, leverage and return on assets.

TUROVit = β0 + β1EXTVDIit + β2SIZEit + β3AGEit

+ β4LEVit + β5ROAit + eit (3)

Table 4 presents the results of the model and shows that the Adjusted R2 value
is 12.4%. This indicates that 12.4% of the variation in stock liquidity measured by
share turnover ratio was explained by this model. In other words, the variation in the
independent variables and control variables are able to explain 12.4% of the variation
of the dependent variable which is stock liquidity measured by share turnover ratio in
586 M. Abu Nassar and Z. S. Rahahleh

this case. The model has F value of (7.390) and a p value of <0.001 which indicates
that the first study model proposed is appropriate and has explanatory power. Thus,
the study accepts the first hypothesis and rejects the null hypothesis, which signifies
that there is a significant effect of voluntary disclosure on sock liquidity measured
by Share turnover ratio along with the control variables.
The voluntary disclosure has a negative (β = −0.155) and statistical significant
(sig = 0.039) effect on stock liquidity, measured by share turnover ratio. For control
variables, firm age variable has a negative (β = −0.162) and statistical significant
(sig = 0.011) effect on stock liquidity, which implies that more Age firms have less
stock liquidity. Furthermore, return on assets (ROA) has a negative effect on stock
liquidity (β = −0.278), and it is statistically significant (sig = 0.000), which indicates
that firms with high ROA have less stock liquidity.
Finally, the results of the first study model demonstrate that the variables size
and leverage do not have a significant effect on stock liquidity, measured by share
turnover ratio (TUROV).

5.4.2 Model (2)

The second model is designed to examine the effect of voluntary disclosure on stock
liquidity using SPREAD which represents average daily Bid-ask, and controlled by
the firm size, age, leverage and return on assets.
Table 5 presents the results of the model and shows that the Adjusted R2 value is
−0.009%. This indicates that 0.009% of the variation in stock liquidity measured by
Daily Bid-ask spread was explained by this model. In other words, the variation in
the independent variables and control variables are able to explain only −0.009% of
the variation of the dependent variable which is stock liquidity measured by Daily
Bid-ask spread in this case. Negative values of the Adjusted R2 may occur when
the adjusted R square contains terms that do not help to predict the response [55].
The results could be improved by adding more useful independent variables to the
model that has a greater ability to explain the dependent variable, or by removing
the ineffective variables.
The model has an F value equal to (0.605) and a p value equal to 0.696 which is a
non-significant value indicating that the second study model proposed is not suitable
and has no explanatory power. Accordingly, the study rejects the second hypothesis
and accepts the null hypothesis, which indicates that there is no significant effect
of voluntary disclosure and the control variables on the stock liquidity, which is
measured by the Daily Bid-Ask spread.
The Effect of Voluntary Disclosure on Stock Liquidity: Evidence … 587

Table 5 Regression results for model (2): The dependent variable is daily bid-ask spread
R square 0.014
Adjusted R2 −0.009
F 0.605
Sig 0.696
Model Beta T Sig. Tolerance VIF
(Constant) 0.879 0.381
EXTVDI −0.072 −0.901 0.369 0.696 1.438
SIZE −0.022 −0.247 0.805 0.592 1.688
AGE −0.088 −1.302 0.194 0.971 1.029
LEV 0.004 0.060 0.952 0.807 1.239
ROA 0.009 0.130 0.897 0.837 1.195
EXTVDI: voluntary disclosure, TUROV: Share turnover ratio, SIZE: Firm size, AGE: Firm
Age, LEV: Leverage, ROA: Return on asset
Dependent variable: Daily Bid-ask spread

6 Conclusions

This study aimed to investigate the effect of voluntary disclosure on stock liquidity of
23 Jordanian insurance companies for the period (2010–2019). The study used a self-
constructed voluntary disclosure index (VDI) to measure the independent variable
the voluntary disclosure, and for the dependent variable stock liquidity two measures
were used, first; the share turnover ratio, second; the Daily Bid-Ask spread. Moreover,
Firm size, firm age, leverage, and return on assets were used as control variables.
The study hypothesized that there was a positive effect of voluntary disclosure on
stock liquidity measured by share turnover ratio and also a positive effect of voluntary
disclosure on stock liquidity measured by daily bid-ask spread.
The hypotheses were rejected and the results showed a significant negative effect
of voluntary disclosure on stock liquidity measured by share turnover ratio, that the
higher voluntary disclosure leads to a lower stock liquidity. As for the Daily Bid-ask
spread, the study showed that there is no significant relationship between voluntary
disclosure and stock liquidity measured by daily bid-ask spread.
The results are inconsistent with [40, 41, 52] who found a positive significant
relationship between voluntary disclosure and stock liquidity. This inconsistency in
the results could be due to several reasons; first, the comprehensiveness of disclosure
regulations that governs the insurance sector which covers most issues of interest to
the investor, so that other disclosed information not significant enough to influence
investor’s investment decisions and hence the stock liquidity. Second, uncontrolled
conditions may affect the relationship between the variables of the study, to avoid
that issue the study recommends to use more useful control variables in the future
researches. Third, some companies publish almost the same annual reports every year
so that they adopt a set of voluntarily disclosed information and continue to disclose
588 M. Abu Nassar and Z. S. Rahahleh

them with only minor, insignificant adjustments to the voluntary disclosure, that the
trend of voluntary disclosure for each company ranges between close proportions
and does not change significantly overtime and that could affect the results, that it
do not properly deduce the relationship between the variables.

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Forensic Accounting in the Age
of Financial Technology

Zainab Abdulla Alaaris and Abdalmuttaleb Al-Sartawi

Abstract The current paper focus on the literature related to forensic accounting
and challenges can be faced in the financial technology age. As per the previous
studies reviewed the finding revealed that forensic accounting can be considered
as a tool to monitor the changes and control any expected fraud because of the
advancement of the technology. The paper recommends to establishing forensic
accounting departments in both the governmental and non-governmental sectors
to train and develop the skills of forensic accountants on the latest technologies,
including software used.

Keywords Forensic accounting · Auditing · Technology · Financial technology ·

Cybercrime

1 Introduction

The profession of forensic accounting provides wide range of services that can
support individuals, organizations, and governments during one of the most difficult
periods in the history [1]. Professional accountants work in various sorts of associa-
tions including, insurance agency, public establishments, police powers, banks, and
government organizations. Even though some forensic accounting services (such as
cybercrime detection and fraud detection) overlap, case administrations and busi-
ness valuation), by far most of exploration in the scientific bookkeeping region have
ordered the administrations presented by measurable bookkeepers into four primary
classes, which are suit administrations, extortion examination [3–5, 71].

Z. A. Alaaris
Freelancer, Manama, Bahrain
e-mail: [email protected]
A. Al-Sartawi (B)
Ahlia University, Manama, Bahrain
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 591
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_44
592 Z. A. Alaaris and A. Al-Sartawi

Forensic accountants may provide necessary information to the legal investiga-

tions or serve as an advisor, assisting lawyers with the litigation process [6, 65].
Support services for litigation may include dispute advisory, engagement of experts
as witnesses, and consulting services [7, 70]. In some cases, such as personal injury,
risk analysis advice for bankruptcy, family law, matrimonial issues, stock-based
compensation, and the fair value of financial reporting, forensic accountants may
offer business valuation services [8, 9, 64]. According to [10–15, 22, 69], dispute
resolution is another specialty in which forensic accountants provide financial and
court-related adversarial services.
For fraud investigation services they identify, prevent, and act against those who
engage in financial fraud, money legalization, and personality theft. In addition,
forensic accountants are expected to work in a variety of fields, including computer
forensics, data mining, and information technology [3, 10, 16–19]. References [20,
27, 32, 61] Named different cybercrimes where criminological bookkeepers can play
a critical job, for example, charge card misrepresentation, online opiate deals, media
communications misrepresentation, on the web/email blackmail, internet betting,
robbery of PC protection and licensed innovation privileges.

2 Purpose of the Study

Technology is about using science to find solutions to problems. Forensic accounting

has always been made easier by technological advancements [21, 63]. Forensic
accounting’s effectiveness and efficiency are both improved as technology knowl-
edge grows along with increase in financial crimes [22, 23, 60]. The technology will
enhance the performance of individual and companies. The weak points of tech-
nology can be used by investigators to analyze it and suggest solutions and can be
used by professional cybercriminals to complete their financial crimes [24–26].
It is easy to describe the manifest of financial and economic crime as untamed
and endemic [32, 62]. It is serious and affect in people in general and confidential
areas. We can look at the economic and financial crimes as any procedure which
will damage the economic results like achieving loss or earning unjustified revenue
through using un legal transactions and activities [28, 29, 58, 59].
Forensic accounting is important because it help people to find the people behind
every problem in the financial area as today you found different types of fraud and
it is by phone and they took all your money, so it is good to use forensic accounting
now to found them and give them what they deserve [30, 47].
Forensic Accounting in the Age of Financial Technology 593

3 Literature Review

3.1 Technology and Forensic Accounting

Technology is undergoing significant change in the accounting field. As a result,

accountants of today need to be knowledgeable and adept at technology use [33,
55–57, 66]. Accountants will be able to analyze a variety of important issues with
more ease if they have the skills and solid understanding of technology [22, 34–36].
Technology plays a variety of roles in the investigation of forensic accounting
because it enables the forensic investigator to a quantity of activities and transactions,
determining work patterns, and select files the need more examination and initial
comprehension [18, 37–40]. Technology will support forensic accounting in the
electronic reconstruction of damaged files, the identification of scam methods, the
recovery of deleted files, the detection of steganography, open coded files, and the
mining and keeping of data [2, 7, 41–44].
According to [31, 45, 54], the success of an accounting career depends on the
ability to obtain, manage, and analyze digital evidence. Now of the internet, forensic
accounting uses a lot of technology-based investigative tools, like data mining and
analysis, and sometimes the tools that used by cybercriminals are used in forensic
accounting to find them. Forensic accounting effectiveness and efficiency increase as
technology knowledge increases. Because of the American institutions Technology
and forensic accounting have no significant connection [46, 67].

3.2 Technology and Financial Crimes

The need for technology has grown because of the globalization of the world and the
widespread reliance of individuals and business organizations on technology [47,
68]. While technology has a positive impact on many aspects of our lives, it also
has negative effects in a few areas, and fraudsters use digital devices as fraud tools.
Expansion in the information on innovation expands productivity and viability of
criminological bookkeeping and in like manner speeds up and ease for crooks to
carry out monetary violations. Most of all financial fraud involves the use of digital
equipment and computers [48]. However, concluded that the benefits of technology,
such as computers and other digital equipment, outweigh the drawbacks [49]. The
perpetrators of economic and financial crimes and forensic accountants alike can
take advantage of new opportunities provided by technology [50–53].
594 Z. A. Alaaris and A. Al-Sartawi

4 Conclusion

This study shows that the application of forensic accounting faces many challenges.
The study also found that technology has important implications for both forensic
accounting and financial crime. Technology has A negative impact on financial
crimes.
Accordingly, forensic accounting has turned out to be a necessary tool to combat
the ugly problem of financial crime, so it is necessary to have a compulsory forensic
accounting department in regulators, institutions, and offices (public and private).
Establishing forensic accounting departments in both the governmental and non-
governmental sectors to regularly train and develop the accountant skills on the latest
technologies, software used to investigate the crimes. Governments must change
existing laws to meet the demands of today’s technological advances. Forensic
accounting can be offered in colleges, universities, and all professional accounting
organizations.

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The Performance of Internal Shariah
Auditor in Islamic Financial Institutions

Azam Abdelhakeem Khalid, Adel Sarea, and Zaroug Osman Bilal

Abstract The purpose of this paper is to examine the conceptual relationship

between Shariah audit independence, qualifications and performance of internal
Shariah auditor in Islamic financial institutions (IFIs). This paper is theoretical
in its approach; whereby it also undertakes an extensive literature review. From
a general agency theory, an Islamic agency theory is articulated and applied to
ascertain the attributes of internal Shariah auditor performance revolving around
the concept of independence and qualifications. Performance of internal Shariah
auditing, as a mechanism of assuring Shariah compliance by IFIs, varies directly with
the degree of independence and qualifications enjoyed by internal Shariah auditors
themselves. The study finds that in evaluating the independence and qualifications
of internal Shariah auditor performance, Islamic agency theory can potentially serve
as the theoretical foundation in developing a multi-dimensional conceptual frame-
work. Evidence is drawn strictly from secondary sources. To ensure that internal
Shariah auditor is performance, IFIs ought to improve the degree of independence
and qualifications of the auditors. Both the studies on external Shariah auditors’
performance in IFIs, and internal auditor’s performance in conventional financial
institutions have been extensively researched. However, research on the performance
of internal Shariah audit in IFIs is yet to be conducted extensively.

Keywords Internal Shariah audit performance · Independence · Qualifications ·

IFIs

A. A. Khalid (B)
Department of Accounting and Finance, Faculty of Business Management and Professional
Studies, Management and Science University, Shah Alam, Selangor, Malaysia
e-mail: [email protected]
A. Sarea
College of Business and Finance, Ahlia University, Manama, Bahrain
Z. O. Bilal
Department of Accounting, College of Commerce and Business Administration, Dhofar
University, Salalah, Oman

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 599
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_45
600 A. A. Khalid et al.

1 Introduction

The introduction of Islamic laws into Islamic financial institutions (IFIs) has resulted
in great changes; especially in the way the institutions do their business, which has
affected the audit of these institutions [15]. Accordingly, the normal audit objective
has been changed to agree with the Islamic law even though the normal conven-
tional auditing is unable to cater for the value of Shariah Islamiah [10]. In view of
the nascence of IFIs there have been no mandatory regulated guides on auditing
practices and accounting standards. Currently, auditing practice of IFIs in various
countries represent that besides external auditors who are responsible for financial
audit; all IFIs have Shariah supervisory board (SSB) in-house whose main duty
is to certify the adherence of the IFIs to Shariah principles. The failures of large
corporates such as Enron and WorldCom have emphasis on internal audit to increase
markedly, the increased need for internal Shariah auditor to monitoring role motivates
Islamic bank to invest in internal auditing and improve the performance of internal
Shariah auditor to ensure the achievement of organization objective ultimately. The
internal Shariah audit is concerned with sound and effective internal control system
for Shariah compliance through continuous periodical assessment [26].
The important of internal Shariah audit in IFIs setting especially in Islamic banks
leads various researchers to concern over its operation. The organization that has
effective internal audit function will be much better than those organizational that
has not such a function especially in related to fraud, detection and prevention [24].
The internal auditor not act only as a player to ensure corporate governance as well as
providing internal consultancy [31] but the role has been extended to practice Shariah
audit in order to ensure that the operations of IFIs are Shariah compliant. Shariah
auditing has currently emerged as an important subject of discussion in line with
the rapid development of IFIs. The independence of internal Shariah auditor plays a
crucial role in effective discharge of his duties and profession. He occupies a unique
position, as he appointed by the management but also review the conduct of the
same management, which potentially places him in a position of conflict and thus his
independence while conducting his work. This gives significant tension to the internal
auditor as he does not find himself independent from the management [3]. Without
independence, the internal auditor simply becomes a part of the management team,
losing the ability to offer a fresh perspective through an objective evaluation [7]. An
auditor is essential to be independence in both fact and appearance. Independence is
“(1) real independence of the individual practitioner in his performance of his work;
(2) and second, the apparent independence of auditors as a professional group” [21].
Independence is the cornerstone of the auditing profession, without independence
the auditor’s opinion is suspect.
Shariah audit function is handling by internal audit department of Islamic banks,
to be independence an auditor should be able to demonstrate that there is no threat to
his independence such that an outsider would not doubt the auditor’s objectivity [5].
The responsibility of internal auditors has extended their job scope, internal auditor
acts as a player to ensure corporate governance and providing internal consultancy
The Performance of Internal Shariah Auditor in Islamic Financial … 601

[31]. Thus, it was suggested that there is a need to have independent Shariah auditor
in IFIs [11]. As a new emerging discipline, there are several issues which need to
be resolved in order to develop a sound Shariah auditing system for IFIs [32]. One
of such issues is internal Shariah auditor independence, unsolved issues related to
Shariah auditing in terms of independence, qualification of internal Shariah auditor,
scope of internal Shariah audit work, and auditing standards, the Islamic banking
and financial industry will be distorted unless to solve the issues of Shariah auditing
[14]. This is evidence by the lack of literature review on the subject. Currently,
AAOIFI guidelines on Shariah audit can be considered as the most relevant guideline
available for Shariah audit practice. However, whether the standard is able to serve
to the practice of Shariah audit in comprehensive manner is still another question to
consider. The internal Shariah auditor should satisfy himself and formulate accurate
judgment that the transactions and controls he examined during his audit process
comply with Islamic Shariah rules and principles [35].
Shariah auditor that has qualifications tends to demonstrate better independence,
thus better auditing outcomes that will lead to a success in Shariah audit. Hence,
internal Shariah auditors are required to maintain their independence so that they
will issue unbiased and reliable audit reports. However, it has become increasingly
questionable whether the profession is able to maintain its independence not only in
fact but also in appearance [23]. This heightened concern expressed by many is owing
to the fact that internal auditors are also employees of the organization they audit and
report on. This makes it an interesting area to study. In view of the above, the objective
of the research is to examine the conceptual relationship between Shariah audit
qualifications and independence of internal Shariah auditor. However, few research
attention has been focued on these issues. The extent to which internal Shariah audit’s
independence and qualifications influences the performance of internal Shariah audit
still needs to be clarified. This study aims to explore the status of independence
and qualifications of internal Shariah audit in IFIs and how these contextual factors
contribute to the performance of internal Shariah audit in IFIs. The paper is being
with the definition of Shariah audit, roles and responsibilities, and independence
of Shariah audit; followed by relationship between Shariah audit qualifications and
independence of internal Shariah auditor together with underpinning theory and
ended with conclusion.

2 Literature Review

2.1 Definition of Shariah Audit

Since the research about internal Shariah audit is at the fetal stage, some basic issues
and concepts of it have not yet been resolved. For instance, any field of study needs
a proper definition before one can dig deep into its different aspects. However, there
has not been any unanimous and clear-cut definition of the term Shariah audit yet. In
602 A. A. Khalid et al.

its simplest sense, Shariah audit has been defined as an audit attestation for Shariah
compliance [35]. However, the term is not so easy to be explained by such a simple
expression and the writers confess this fact by pointing towards different issues that
might arise as a result of this definition. On the other hand, AAOIFI’s Governance
Standard for IFIs no. 3 elaborate the objective of Shariah audit as “the primary
objective of the internal Shariah review (carried out by independent division or part
of internal audit department) is to ensure that the management of an IFI discharge their
responsibilities in relation to the implementation of the Shariah rules and principles
as determined by the IFI’s SSB”. It is visible in this statement that Shariah audit
aims at Shariah compliance, and it has been taken as an internal matter of an IFI
which is the responsibility of an independent branch of internal audit department.
We find a more comprehensive definition of the term given by [9] which states
that Shariah audit is: “a systematic process of objectively obtaining and evaluating
evidence regarding assertions about religious and socioeconomic actions and events
in order to ascertain the degree of correspondence between those assertions and those
of the applicable financial reporting framework, including the criteria specified based
on Shariah principles as recommended by the SSB and communicating the results
to all interested parties”.
This definition catches the broad scope of Shariah audit by adding the socioeco-
nomic aspect into it apart from the religious obligations. An operational definition of
the term has also been provided which states that: “Shariah audit is the examination
of an IFIs compliance with the Shariah, in all of its activities, particularly the finan-
cial statements and other operational components of the IFIs that are subjected to the
risk of compliance including but not limited to products, technology supporting the
operations, operational processes, the people involved in the key areas of risk, docu-
mentations and contracts, policies and procedures and other activities that require
adherence to Shariah principles” [9]. Although the socioeconomic aspects of the
earlier definition are missing here, we can see that almost all the operational aspects,
including technology, processes, and procedures etc. are included in this defini-
tion. Whereas [26] defines Shariah audit as “the accumulation and evaluation of
evidence to determine and report on the degree of correspondence between informa-
tion and established criteria for Shariah compliance purposes”, [11] has defined it
as “a systematic process of objectively obtaining and evaluating evidence regarding
assertions about socio-economic, religious and environmental actions and events in
order to ascertain the degree of correspondence between those assertions and Shariah
(Islamic Law), and communicating the results to user.

2.2 Roles and Responsibilities of Shariah Auditor

It is debated that Shariah audit is one of the key pillars in corporate and Shariah gover-
nance of IFIs. They need to ensure compliance of the IFIs to all Shariah requirements
[20]. The Shariah audit function is performed by the internal auditors with adequate
Shariah related knowledge, competent, skills, experience, and training. Subsequently,
The Performance of Internal Shariah Auditor in Islamic Financial … 603

the report is forwarded to the SSB of the IFIs [33]. The SSB may give their opinions
only on Shariah matters to the board of directors, who will decide and make the final
decision [11, 12]. The primary objective of internal auditors is to ensure that the
management of an IFI discharge their responsibilities in relation to the implemen-
tation of the Shariah rules and principles as determined by the IFI’s SSB [1]. The
internal auditor may also engage the experts in the Islamic finance in performing the
audit as long as the audit objective is not being compromised [34]. The IFIs may also
appoint external party to conduct a Shariah audit.

2.3 Internal Shariah Audit Performance

According to GSIFI No. 3 issued by [1] the internal Shariah auditors shall plan each
internal Shariah audit assignment. Planning documentation shall include, but not
limited to, the following such as Obtaining background information about activities
to be reviewed, such as locations, products/services, branches, divisions, etc. estab-
lishing internal Shariah audit objectives and scope of work. Obtaining SSB Fatws,
guidelines, instructions, prior years internal and external Shariah audit results, rele-
vant correspondence including supervisory and regulatory agencies. Determining the
resources necessary to perform the internal Shariah audit. Communicating with all
individuals in the IFI who need to know about the internal Shariah audit. Performing,
as appropriate, a survey to become familiar with activities, risk, and control to identify
the area of the internal Shariah audit emphasis, and to invite auditees’ comments and
suggestions. Writing the internal Shariah audit programmes. Determining how and
when the internal Shariah audit results shall be communicated. Obtaining approval
of the internal Shariah audit work plan from the concerned authorities including the
SSB of the IFI.
The internal Shariah auditors shall collect, analyse, interpret and document infor-
mation to support their internal Shariah audit results. The information shall be
collected on all matters related to internal Shariah audit objectives and scope of
work. Information collected shall include examination of documentation, analytical
reviews, inquiries, discussions with management, and observation. The information
shall be sufficient, reliable, relevant and useful to provide a sound basis for internal
Shariah audit findings and recommendations. Working papers that document the
internal Shariah audit shall be prepared by the internal Shariah auditor and reviewed
by the head of internal Shariah audit. These working papers shall support the internal
Shariah audit findings and recommendations. Working papers shall be appropriately
prepared, completed, organized, reviewed and retained [1]. The head of internal
Shariah audit shall discuss conclusions and recommendations with appropriate levels
of management before issuing a final report. On completion of the internal Shariah
audit, at least a quarterly written report shall be prepared which must be signed by the
head of internal Shariah audit, addressed to the board of directors and copied to the
SSB and management. The report shall be objective, clear, constructive and timely.
The report shall present the purpose, scope and results of the internal Shariah audit
604 A. A. Khalid et al.

and it shall contain an expression of internal Shariah audit opinion. The report shall
also include recommendations for potential improvements and corrective action, and
knowledge satisfactory performance, when appropriate.
The auditees’ views about the internal Shariah audit conclusions or recommen-
dations shall be included in the internal Shariah audit report. All disputes between
management and internal Shariah auditors on matters relating Shariah interpretation
shall be related to the SSB for a ruling. The internal Shariah audit shall follow up
to ascertain that appropriate action is taken on their reported internal Shariah audit
findings. In addition, any other recommendations related to Shariah matters made by
SSB, external auditors, and regulatory agencies shall also be followed up. Therefore,
the internal Shariah audit function should specify that the internal Shariah auditors
must have direct and regular communications with all levels of management and
SSB. There should not be any scope of limitation and restriction of access to docu-
ments, reports, personnel, etc. place on the internal Shariah auditor. Thus, this will
ensure the efficiency and effectiveness of the internal Shariah audit function.

2.4 Internal Shariah Audit Independence

Independence in auditing means taking unbiased viewpoint in the performance of

audit tests, the issuance and the evaluation of the results of report [5] that management
can place full reliance on audit findings and recommendations [25]. Independence
requires both (i) independence of mind and (ii) independence in appearance [27].
Mautz and Sharaf [21] defined independence in fact or actual independence as the
auditors’ state of mind and his/her ability to maintain a proper attitude in the planning
of his audit program. On the other hand, independence in appearance or perceived
independence refers to the publics or others, perceptions of the auditor’s indepen-
dence. An internal Shariah auditor should be able to demonstrate that there is no threat
to his or her independence, and then only his/her independent can be seen. Indepen-
dence is a critical issue in auditing since it is the cornerstone of the profession [21].
Independence is achieved through the organizational status of internal audit and the
objectivity of internal auditors [22]. All the outcome of Shariah audit function listed
to the SSB may engage independence issues since the SSB of IFIs is responsible
in decisions, opinions related to Shariah matters. Shariah auditor must maintain a
high level of independence to keep the confidence of users relying on their reports,
the internal Shariah auditor must report directly to the board of directors to ensure
independent from the operating unit they audit. The Shariah Governance Framework
issued by bank Negara Malaysia [6] requires that the responsibility of conducting
Shariah audit lies in the hands of the internal audit unit. It indicates that the responsi-
bility of internal Shariah auditor has expanded his scope of work to perform Shariah
audit in ensuring that the operations of the IFIs are Shariah compliant [27–29].
In case of independence the Shariah auditors’ integrity are further promoted by
the stakeholders in Islamic financial institutions, for the Shariah auditors to be inde-
pendence enough to give opinions on the situations of IFIs in the term of Shariah
The Performance of Internal Shariah Auditor in Islamic Financial … 605

compliance in all its portions. The literature on internal audit independence pinpoints
three factors that significantly contribute to the degree of auditor independence (1)
Clear definition of the auditor’s responsibility (2) The position of the internal auditor
within the institution’s organizational structure, and (3) The reporting structure [33].
As stated by [14], in real practice, a heavy dependence on internal Shariah auditors
or the management of the Shariah unit is placed to carry out Shariah audit in Islamic
financial institutions (IFIs). No clear separation of duties been determined, this will
lead to self-review may occur. Thus, even though the respondents are clear of what is
actually desired of independence, but in actual facts they cannot avoid to be relaxed
on the principle of independence due to unavoidable circumstances. This lead to full
potential of an audit cannot be realized if they are not wholly and truly independent,
as the social purpose (benefit to the Ummah) will be frustrated. According to [26]
Shariah auditor is independent whether he/she individual practitioners or members
of public accounting firm who render professional auditing services to clients. By
virtue of his/her education, training and experience, independent auditor is qualified
to perform the audit work [27]. To be independent, auditor should be without bias
in respect of client under audit and should appear impartial to those relying on the
results of the audit. Currently, there is no specific training program or professional
qualification for the internal Shariah auditor to effectively function and express his
independent opinion.

2.5 Internal Shariah Audit Qualifications

According to the [1], “The auditor shall be knowledgeable about Islamic Shariah rules
and principles. However, he/she would not possess the same level of knowledge as
that of Shariah Supervisory Board members and thus the auditor shall not be expected
to provide interpretation of these (Islamic) rules and principles. The Fatwas, rulings
and guidance issued by the SSB form the basis on which the auditor considers
whether the IFI has complied with the Islamic Shariah rules and principles [15–
18]. The auditor shall also use this as a basis for concluding whether the financial
statements of the IFI have been prepared in accordance with the Islamic Shariah
rules and principles”. Till now, the lack of both Shariah and accounting knowledge
has decayed the crucial needs of the internal Shariah auditor. Those with accounting
knowledge tend not to have Shariah knowledge and vice versa [19, 20].
Flint [8] stated that audit competence requires both knowledge and skill, which is
the product of education, training and experiences. Carrying out responsibilities with
competence and due care is consistent with the Hadith: “God loves those, when they
do ask, they do it perfectly”. Competences cover a wide aspect. However, it could
be interpreted that technical competence alone would be insufficient to play the
expected role and to achieve the anticipated results within the framework of Shariah
Islamiah as being established criteria [14]. Investments for education in Shariah,
accounting and auditing is crucial to enhance the knowledge and expertise of the
actors involve with Shariah audit especially and IFIs in general [26]. Prior studies
606 A. A. Khalid et al.

focused on the need for personnel to be appropriately qualified to achieve a high level
of internal audit effectiveness [4] examined the significance of internal auditing in the
Malaysian public sector and found that a lack of qualified staff in terms of training,
experience, and knowledge about internal auditing negatively affected the role of
the internal audit and suggested training as an important requirement for improving
internal audit work [15].

Proposition
P1 Internal Shariah audit independence has significant impact on internal Shariah
auditor performance in IFIs.
P2 Internal Shariah audit qualifications has significant impact on internal Shariah
auditor performance.

3 Theoretical Framework

Based on the above discussion at literature review section, the following is the study
theoretical framework.

3.1 Underpinning Theory

An Islamic agency theory defines a contract under which one or more persons (prin-
cipal) engage another person (the agent) to perform some service on their behalf
which involves delegating some decision-making authority to the agent [13]. The
principal is the owner or managers of the organization who delegate and transfer
responsibilities or capital to the agent. The agent is the managers/employees of an
organization who manage the firm’s business transactions for the owner/principal
[13]. Proponents of the agency theory, define the agency relationship as a contrac-
tual relationship between the shareholder as the principal and the managers as the
agent who are given some authorities to perform services on behalf of the principal.
Agency problem is more intense in the case of Islamic banks as while investors in
The Performance of Internal Shariah Auditor in Islamic Financial … 607

conventional banks have a level of certainty in their returns, in Islamic banks the
profit as well as possible incurred loss and consequently the risk is shared between
the banks and its investors. A person can assign his business to an agent, for the
latter to perform and act on his behalf. However, the agency contract is subject to
regulations where the essential elements of the agency contract as the same as the
general Islamic contract, except the nature and scope of the authority are subject to
certain conditions. As a principal (muwakeel), he is obligated to give his authority to
an appointed agent. As insane minor principal cannot be part of any agency contract.
However, a minor person can appoint an agent for the performance that can benefit
the minor but not so for transactions that entail for the minor [30].
This proposed research focuses on two variables: Shariah audit qualifications and
internal Shariah auditor independence. The theoretical framework is based on the
agency theory where the principal will incur the agency cost in order for them to
observe the agent action. The relationship between principals and agents is that the
principals will incur monitoring expenditures while the agents incur bonding cost to
ensure that the work looking after the wealth of the principal is done [2]. Internal
Shariah auditors as agents must perform audits processes at the professional level
requiring education qualifications and audit scope or its performance, and standards
practices to enable the internal Shariah auditor to express an opinion on financial
audit reports and Shariah compliance matters and other competencies needed to
perform their responsibilities perfectly. Having internal Shariah auditors with such
requirements and the existence of training programs for internal Shariah auditors,
would increase the confidence level of the board and audit committee in the internal
Shariah auditor competence. Agency theory in this context provides the basis to
explain the independence role and responsibility assigned to the internal Shariah
audit functions [2].

4 Conclusion

This paper presents the conceptual relationship between Independence, qualifica-

tions of internal Shariah audit and its performance in IFIs. The paper is constraint
to only considering the independence and qualifications as the independent vari-
able; this paper is a conceptual literature review paper at Islamic banks. However,
despite the limitation of the paper, the paper contributes to knowledge of Shariah
auditing by extending the existing literature on the performance of internal audit
through determining the independence of internal Shariah auditor at IFIs in relation
to Shariah audit qualifications as recommend that more research should be carry out
on internal Shariah audit in IFIs. Likewise, future research should look at possibility
of introducing other moderating or mediating variables in order to strength or to
influence the relationship between Shariah audit independence, qualifications and its
performance.
608 A. A. Khalid et al.

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Real or Virtual: About the Future
of Education

Ismail Noori Mseer and Kholod Aggad

Abstract In many aspects, virtual learning environments are replicas of their phys-
ical counterparts, and they use symbolic illustrations to help students comprehend the
user interface. The architectural elements in physical institutions, such as an entrance,
administration buildings, lecture rooms, libraries, supplementary services, and recre-
ation facilities, are also present on digital campuses. Instead of lectures, students do
interactive learning exercises that foster a sense of community. We can compensate
for the lack of interactive web-based learning through cooperative learning. While
computer literacy is assumed, students in digital learning environments must be
literate in three distinct areas: academic, visual, and collaborative.

Keywords Education · Learning real · Virtual

1 Introduction

Since communications can now be shared more quickly and cheaply in a digital
environment thanks to e-mail and bulletin boards, e-learning courses offer a unique
advantage over traditional distant education [1]. However, they lack the intimate
component of contact education. Most of the time, a teacher cannot read a student’s
body language or hear their expressions of happiness or dismay. You also can’t smell
a misbehaving student’s stink bomb or feel the oppressive heat in a desert classroom.
So, how can one develop an interest in online learning?
The solution appears to rest in developing collaborative learning tasks and
metaphor-based learning communities. Students must understand the metaphors,
engage with their peers, and take ownership of their own learning to function in

I. N. Mseer (B)
Ahlia University, Manama, Bahrain
e-mail: [email protected]
K. Aggad
University of Business and Technology, Jeddah, Saudi Arabia

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 611
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_46
612 I. N. Mseer and K. Aggad

online learning communities. Visual, cooperative, and academic literacy are the three
types of literacy needed.
When he makes the distinction between “a virtual community’s cyber-place and
the virtual community itself,”) illustrates the connection between an online commu-
nity and the internet, while McInnerney and Roberts emphasize the significance of
social context in determining the success or failure of learning. A virtual village is the
cyber-location of a virtual community. This chapter compares virtual and physical
campuses metaphorically by examining the design and operation of virtual learning
environments and portals, which serve as communities of learners.
It is difficult to refer to the internet as a virtual environment now that digital
technology and the internet are present in almost every home in the developed world
and even in the wealthiest areas of the poorest developing nations. It has evolved into
the primary means of actual communication for many people [2].
In various application areas, including medical training, mainstream and special
needs education, and rehabilitation, virtual reality has been utilized to support
multiple forms of learning. A summary of outstanding research in these areas is
provided. The limitations of the available research knowledge are examined, and
suggestions for additional research are given.

1.1 Virtual Reality Multimedia Learning

Virtual reality and virtual environments don’t have a single, clear, or widely accepted
definition. This is partially a result of the several technologies involved being in a
constant state of innovation and the phrases employed in various settings. Virtual is
defined as “anything that can be done or observed via a computer and consequently
without going anywhere or talking to someone” in the Cambridge online dictionary.
According to the dictionary.cambridge.org, virtual reality is “a set of visuals and
sounds produced by a computer, which seem to reflect a place or a situation that a
person can experience or participate in.“ The term “virtual reality” is used in this
chapter to refer to a group of systems that include computer processing (PC-based
or higher), a platform for building three-dimensional environments, and add-ons like
visual displays and interactive tools to create and maintain virtual environments. The
term “virtual environment” describes the produced three-dimensional surroundings
[3].
Examines comparative media studies on how immersive technologies, such as
virtual reality and two varieties of mixed reality, augmented reality and augmented
virtuality, affect learning results. It also discusses several variables that may limit
these impacts. In conclusion, recent meta-analyses show that low-immersion virtual
reality (d = 0.22 − 0.41) and low-immersion augmented reality (d = 0.46 − 0.68)
have minor- to medium-sized effects on learning outcomes when compared to other
instructional mediums. On the other hand, high immersion augmented reality (median
d = 0.16) and virtual reality (median d = 0.10) show less promise. Although there is
little research on augmented virtuality, the few studies that exist indicate that it has a
Real or Virtual: About the Future of Education 613

favorable impact on learning (median d = 0.45). It is examined how these immersive

technologies may affect cognitive frameworks theoretically and practically in terms
of how technology will be used in classrooms in the future.
How feasible is it to use technology to deliver high-quality language learning and
teaching? In order to give students useful interactive language learning tools, this
study examines the benefits and drawbacks of employing CD-ROMs and Web-based
materials. It will show that, at least in terms of pedagogy, the benefits outweigh
the drawbacks and that, despite challenges and frustrations, technology is not to be
rejected because recent advancements in technology, particularly on the WWW, have
greatly increased the potential for even more genuine interaction in the classroom.
There are examples from our Vietnamese course as well [4].
Everybody who reads or writes is impacted by the rapid and significant changes
in learning, teaching, and research methodologies. Research findings are communi-
cated via information networks, and electronic resources are increasingly chosen as
information sources. The way librarians view their work, information users, and the
entire communication process they are a part of has changed due to electronic media
usage.
Digital publication significantly affects teaching and learning and necessitates
reevaluating instructional approaches and information accessibility. Digital libraries
and electronic resources have the potential to have a significant impact on education
and offer the chance to change the way that people teach and learn [5]. The library
at Tampere University has implemented activities that reflect environmental changes
that impact libraries and offer value to teaching and learning.

1.2 Alterations to the Workplace

There are many changes in scientific information and publication structures, and
anything that occurs in the publishing industry impacts libraries. Many significant
resources are no longer available in traditional formats since electronic publishing
has often exceeded its printed counterpart.
In addition to helping teachers and students use new publishing channels, libraries
play a significant proactive role in their development and utilization. Only when they
offer services and collections that adapt to the changing requirements of their users
on the desktop and in the classroom do libraries, continue to be helpful.
University libraries’ patron demographics are diversifying. Faculty and students’
interests, backgrounds, and talents are becoming more diverse, and they exhibit an
increasingly diverse set of information needs and expectations. The rise of online
universities and new disciplines of study have further increased the demand for
libraries.
614 I. N. Mseer and K. Aggad

1.3 Techniques for Teaching and Learning

The problem-based approach is becoming more popular, and new perspectives on

learning and teaching are developing that focus more on cognition. With a focus
on active learning, this approach anticipates that students will develop into self-
directed learners who take greater ownership of their knowledge acquisition through
examining information sources and networks. Electronic materials enable virtual,
web-based teaching and learning and present novel approaches teaching [6].
According to many, one of the most significant difficulties facing the library
profession since its establishment is arguably the recent scope and speed of worldwide
e-learning innovations. The way we support the e-learning experience is continuously
facing new problems thanks to technological advancements. Virtual learning envi-
ronments (VLEs) are now viewed as a crucial instrument in the education industry
by a rising number of traditional learning providers who, up until recently, were only
concerned with face-to-face delivery. The VLEs are thought to give provision a new
competitive edge.
Likewise, established distance learning institutions that once controlled the market
must adapt to growing competition by seeking fresh approaches to providing e-
learners with high-quality learning opportunities that inevitably boost retention and
advancement. This plan is heavily influenced by national and international political
and economic strategies.
The Devil project intended to identify and address significant concerns for
e-learning stakeholders against this context while considering the conflicting
perspectives of academics, librarians, and learning technologists.
The University of Edinburgh and the Open University collaborated on the DEViL
(Dynamically Enhancing Virtual Learning Environments from within the Library)
project, a UK Joint Information Systems Committee (JISC) funded project that is a
part of the JISC’s “Linking Digital Libraries with Virtual Learning Environments”
Program (JISC, 2002).

1.4 Disintermediated Methods of Learning Support

The project’s development of a prototype software solution to enable the expo-

sure of a variety of hitherto non-interoperable digital archives to proprietary and
non-proprietary virtual learning platforms was a crucial technical undertaking. The
project’s meta-evaluation strand examined the effects of disintermediating some of
the standard learner support services libraries have offered while mediating digital
collections at the object or asset level.
The evaluation methodology used various techniques, such as creating scenarios
from use cases, conducting in-person and phone interviews, giving presentations and
short workshops to library staff, and analyzing reflective reports from team members
involved in carrying out different project components within their institutions [7].
Real or Virtual: About the Future of Education 615

Learning transcends the specific institutional setting society has set aside for that
reason and is the generation of knowledge through the transformation of experi-
ence. Additionally, it’s critical to distinguish between learning and academic knowl-
edge, as knowledge can take many different forms and serve a variety of objectives.
Using Kolb’s theory of learning, change becomes a requirement for understanding
if a certain kind of change is used in place of transformation. From the time they
are born, people engage in educational environments. They move between environ-
ments, including the family, playground, school, service organizations, and churches,
and with time, they add work environments and other leisure pursuits. Our primary
research interests are in designing and analyzing such learning environments [11].
This particular focus includes both formal school settings and non-school settings
(including museums, scientific centers, open areas, and the Internet) and the spots
where these contexts converge. These interests encompass both offline and online,
physical, and virtual labor. Analyzing each context is necessary to determine partic-
ipant expectations and work requirements to understand the relationship between
learning and community. As a result, we acknowledge the variety of virtual envi-
ronments and the linkages between online and offline communities. The options for
education, which are not merely “school-based” or primarily the exclusive domain
of educational institutions, bind communities—virtual or otherwise—together [8].
Without physical fences, the No fence technology is a GPS-based virtual fencing
system that confines sheep to specific areas. As they enter and exit the virtual enclo-
sure, a sound signal and a little electric shock are given to sheep wearing No fence
collars. A novel learning protocol and two tests of the No fence system’s function-
ality are described. Nine ewes and their lambs were separated into three groups and
placed in an experimental enclosure with one No fence border for Experiment 1. A
physical fence was present outside the boundary for two days, it was taken down on
Day 3, and the wall was moved to the opposite end of the enclosure on Day 4. Over
the four days, the sheep were shocked 6–20 times, averaging 10.92.0 (mean) per
ewe. After the physical gate was removed on Day 3, the number of shocks dropped
from 4.380.63 to 1.50.71 on Day 4 (when the border was moved). On Days 1, 2, 3,
and 4, the ewes, on average, spent 3, 6, 46, and 9% of their time outside the border.
Thirty-two ewes, both with and without lambs, were separated into eight groups and
housed in an experimental enclosure for Experiment 2. Three physical fences and
one virtual border were used to enclose the area on Day 1; on Day 2, the number of
virtual boundaries was increased to two. At least 50% of the ewes in a group needed
no more than four shocks on Day 2 to proceed to Day 3, when there were meant
to be three virtual borders on the enclosure. After Day 2, the experiment was over
because none of the groups had met the learning standard.
On Day 1 and Day 2, the sheep received 4.10.32 and 4.70.28 shocks, respectively.
In sum, 71% of the ewes on Day 1 and 77% on Day 2 received the maximum five
shocks. The individual sheep spent between 0 and 69.5% of Day 1 and between 0
and 64% of Day 2 in the exclusion area.
In conclusion, it is too difficult to guarantee effective learning, so animal well-
being cannot be guaranteed. The collars had technical issues that might have impacted
616 I. N. Mseer and K. Aggad

the outcomes. Since the No fence prototype failed to keep the sheep inside the
designated boundaries, it cannot be used to substitute actual fencing for sheep [9].

2 Conclusion

The ways that research on Virtual Exchange (VE) has influenced language teaching
methods as well as the areas where research has been under-, incorrectly-, or
even excessively applied by VE practitioners in formal educational contexts. After
providing a brief historical review of VE, the essay goes on to describe the character-
istics that are generally recognized as being essential to this pedagogical approach
before examining the extent to which research findings can be applied to VE imple-
mentation. The key goals for language development when VE is used, evaluation
of language progress using VE, and intercultural competency are the main subjects
discussed. The article offers insight into the core areas of VE research and how these
discoveries are being applied in language classrooms, even if it is not meant to be a
comprehensive review (primary, secondary and university) [10].

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44821000069
The Impact of Earnings Management
on the Value Relevance of Earnings:
Empirical Evidence From Jordan

Marwa Rawashdeh, Mahmoud AlKhalailah, and Hala Zaidan

Abstract The purpose of this study is to examine the impact of earnings manage-
ment practices on the value relevance of earnings. To achieve this goal, a sample
of 89 manufacturing firms listed on Amman Stock Exchange (ASE) over the period
(2006–2018) is used to test the study’s predictions. The study’ findings confirm most
prior value relevant studies, by providing evidence indicating that both earnings
(EPS) and book value (BV) are value relevant. Although the regression coefficient
on both EPS and BV, are considered positive and are statistically substantial at the
conventional level, the regression coefficient on EPS is substantially higher than
that of BV. This result implies that EPS is more value relevant than BV. Consistent
with the study’s predictions, discretionary accruals (DAC), which used as a measure
of earnings management, is negatively related to share price suggesting that earn-
ings management activities reduce the value relevancy of accounting information.
Further, the interaction of earnings with DAC variable is negatively related to share
price indicating that earning management decrease the reliability and consequently
the value relevant of earnings. Findings on the direct and the indirect impact, the
moderating effect (interaction of DAC with EPS), of DAC on the value relevant of
EPS provides sufficient empirical evidence suggesting that DAC decreases the value
relevance of the earnings.

Keywords Earnings management · Value relevant · EPS · Book value ·

Discretionary accruals

M. Rawashdeh · M. AlKhalailah · H. Zaidan (B)

Department of Accounting, The School of Business, The University of Jordan, Amman, Jordan
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 619
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_47
620 M. Rawashdeh et al.

1 Introduction

The purpose of this study is to investigate the relation between earnings management
and the value relevance of earnings. Particularly this study aims to investigate whether
earnings management activities have a negative impact on the value relevance of earn-
ings of non-financial Jordanian companies listed in Amman Stock Exchange (ASE)
over the period (2006–2018). Healy and Wahlen [1] defined earnings management
as.
Earnings management occurs when managers use judgment in financial reporting and in
structuring transactions to alter financial reports to either mislead some stakeholders about
the underlying economic performance of the company or to influence contractual outcomes
that depend on reported accounting numbers.

The value relevancy of accounting information is an essential issue to all parties

concerned in prepare and use financial statements. Francis and Schipper [2] defined
the value relevance as” the ability of accounting information to summarize informa-
tion that affects stock values”. Based on previous studies on value relevance, there
are different factors affect the value relevance of accounting information such as
earnings management, non-recurring items, and firm size. This study concentrated
on earnings management as a factor that influence the value relevancy of accounting
information.
Several studies have addressed this issue in both developed markets and developed
economics (e.g., [3–6]) and provide contradicting results.
Further, most studies which addressed this issue are concentrated in developed
economics. Thus, this study attempts to obtain empirical evidence on this issue from
a small emerging market namely, Jordan. In specific, this study empirically examines
whether earnings management activities affect the value relevance of earnings for
Jordanian companies listed on ASE.
This paper will proceed as follows: the Sect. 2 summarizes the literature and
motivated the hypothesis. The Sect. 3 presents the methodology and data. Lastly, the
Sect. 4 concludes.

2 Literature Review and Hypothesis Development

Several empirical studies examined the impact of earnings management -especially

opportunistic earning-on the value relevance of accounting earnings. For example,
[7] examined the relationship between earnings management and value relevance
of both earnings and book value. The study utilized a sample of firms listed on the
Australian Stock Exchange (ASX), they used three alternative sources of earnings
management: short term discretionary accruals, long term discretionary accruals,
and total discretionary accruals. Earnings management measured by discretionary
accruals. The results showed that total discretionary accruals has no impact on the
value relevance of earnings or book value, also, the value relevance of earnings via
The Impact of Earnings Management on the Value Relevance … 621

long term and short term discretionary accruals reduced and they have no impact on
the value relevance of book value. In addition, long term discretionary accruals have
a higher impact on the value relevance of earnings and book value than short term
discretionary accruals.
Habib [4] examined the impact of earnings management on value relevance of
accounting information based on firms in Japan listed in Tokyo stock Exchange.
He used four different measures of earnings management (smoothing behavior
and managerial discretion, an aggregate earnings management score is composed).
Quality of accounting information is taken to be the explanatory power of earn-
ings and book values and the explanatory power of earnings alone related to share
price. The finding showed that earnings management negatively impact the quality
of accounting information.
Musleh Al-Sartawi [8] investigated the relation between earnings management
and the value relevance of the earnings and the book value on Indonesian firms listed
on IXE for the period 2009–2011. The findings of this study indicated that earnings
management practices reduce the value relevance of earnings and book value.
Fattahi et al. [9] investigated the association between earnings management and
the value of the accounting information, they utilize Leuz model. The study carried
out on firms listed on the Tehran Stock Exchange for the period 2003–2011. Results
indicate that there is no significant relationship between earnings management and
value relevance of the accounting information.
Dowlatabadi and Filsaraei [10] examined the relationship between earnings
management and the Value Relevance of earnings, the study period from 2009 to
2015, the study sample carried out on firms listed in Tehran stock exchange. The find-
ings indicate that there is no significant relationship between earnings management
and the stock price as a measure of the value relevancy of earnings.
Ahmadi and Bouri [11] examined the relation between the accounting value rele-
vance of earnings per share and book value and share price. The sample covered
Tunisian banks and financial firms over the period 2010–2015. Share price of three
month after year-end as a measure of value relevance. Study findings indicate that
book value and earnings per share statistically significantly associated with share
price. Also that BV and EPS particularly has greater explanatory power than any
other value, also findings indicate that accounting information is value relevant in
the Tunisian Stock Exchange.
Mostafa [6] examined the relation between earnings management and the value
relevance of earnings on the companies listed on the Egyptian Stock Exchange.
The study tested whether low operating performance companies attempt to upward
their earnings to hide their low performance. Consistent with previous studies he
confirmed that companies with low operating performance apply earnings manage-
ment activities to increase their earnings. After that, he examined whether oppor-
tunistic earnings management that applied by low operating performance companies
affect and reduces the value relevance of earnings. By utilizing a model of the rela-
tionship between stock returns and earnings. The findings indicate that companies
that applied opportunistic earnings management reduced the value relevance of their
622 M. Rawashdeh et al.

earnings and their earnings are less value relevant than high operating performance
companies earnings.
Oraby [12] examined the relationship between earnings management strategies
and accounting information relevance by using a sample of companies listed in
Saudi stock exchange over the period (2012–2016). Results indicate that management
in Saudi companies applied accrual earnings management strategies to manipulate
earnings downward, but it has no impact on share prices. Also, they found that
real earnings management strategies used to manipulate net earnings upward, and it
significantly impact the value relevance of earnings. Investors in Saudi capital market
understand these practices and adjust net income for their decisions.
Otluoglu et al. [13] examined the relation between earnings and stock returns and
investigated whether opportunistic earnings management activities have an impact on
the value relevance of earnings by using a sample of manufacturing companies listed
in Istanbul Stock Exchange of Turkey (BIST). They examined if low performance
companies applied earnings management strategies to hide their low operating perfor-
mance and increase their earnings upward. The study’s results show that companies
with low performance apply these practices to increase their earnings upward. Then
they examined if these practices decrease or affect the value relevance of earnings.
The results indicated that earnings were significantly and positively linked with stock
returns for low as well as high performance companies. Also they found that there
is no difference between low and high performance companies stock return, which
is inconsistent and different from previous studies (e.g., [6]).
A more recent study by [14] which carried out on Mining firms listed on the
Indonesia Stock Exchange, reports significant impact of earnings management on
future stock returns. However, [15] report very low and insignificant association
between real earnings management and stock return.
The review of prior studies reveals that the findings of prior Studies are incon-
sistent, some studies found that earnings management negatively affect the value
relevance of earnings (e.g., [4]). While others (e.g., [10, 12]) found that no relation
between earnings management and value relevance of earnings. While some studies
found that earnings management positively affects the value relevance of earnings
(e.g., [13]).
This study complements prior studies by providing empirical evidence on this
issue from a small emerging market. To the best of our knowledge this issue has not
been examined in Jordan before. Thus, we tested the following hypothesis:
H1: Earnings management activities impact the value relevance of earnings.
The Impact of Earnings Management on the Value Relevance … 623

3 Methodology and Data

3.1 Population and Sample

The study sample includes all manufacturing companies listed on ASE over the study
period between 2006 and 2018, for which all the information needed to measure the
study variables is available. The sample consists of 89 manufacturing companies.
Data needed to compute the studies variables is obtained directly from the sample
companies’ financial reports and from ASE website.

3.2 Research Model

Following prior related studies which examined the relationship between earnings
management and the value relevance of earnings (e.g., [12, 16], the study used the
following model which based on the work of [17], to examine the impact of earnings
management on the value relevance of earnings.

Pit = α + β1 EPSit + β2 BVit + β3 DACCit

+ β4 DACCit × EPSit + β5 DACCit × BVit + Eit (1)

where
Pit is the closing share price for a firm i at the end of fourth month of
the following year t.
EPSit is the per share earnings for a firm i in year t.
BVit is the equity book value per share for a firm i at end year t.
DACCit The absolute discretionary accruals for firm i in the year t.
DACCit × EPSit interaction variable of DACC and EPS.
DACCit × BVit interaction variable of DACC and BV.
Eit is error term for firm i in year t.

3.3 Measurement of Variables

Following prior related studies in the earnings management literatures (e.g., [3–5]),
discretionary accruals is used as a measure of earnings management using the cross-
sectional version of the modified Jones model (1991) proposed by [18]. To measure
discretionary accruals, we follow the following steps:
First to compute total accruals, the study used the cash flow approach to measure
total accruals by which total accrual is obtained by subtracting cash flow from
operation (CFO) from net income (NI) as follow.
624 M. Rawashdeh et al.

TACCit = NIit − CFOit (2)

The second step is to run the modified Jones model (1991) proposed by [18] to
estimate the DACC:
[ ]
TACCit /Ait−1 = α (1/Ait−1 ) + β1 (ΔREVit − ΔARit )/Ait−1
+ β2 (PPEit /Ait−1 ) + Eit (3)

where
TACCit is total accruals for a firm i in year t.
Ait-1 is total assets for a firm i at the beginning of year t.
ΔREVit is the change in revenues for a firm i in year t.
ΔARit is the change in receivables for a firm i in year t.
PPEit is the gross property, plant and equipment for a firm i end of year t.
Eit is error term for firm i in year t.
The above regression model is run for each industry. Then he non-discretionary
accruals (NDACCit ) is calculated using the following formula:

NDACCit /TAit−1 = α (1/TAit−1 ) + β1([ΔREVit −ΔRAit ]/TAit−1 )

+ β2(PPE/TAit−1 ) (4)

where estimated parameters (α^, β1^ &β2^) from the above regression model (model
3).
Then we use the following formula (Eq. 1 presented earlier) to compute
discretionary

DACCit = TACCit−NDACCit (5)

3.4 Dependent Variable: Share Price

Companies covered by this study are required by regulations to file and publish their
financial reports with in the three-period following the fiscal year end. Following
most prior value relevance studies, the closing share price at the end of fourth month
of the following is used to ensure that prices substantially reflected the information
embodied in the published financial report.
The Impact of Earnings Management on the Value Relevance … 625

Table 1 Descriptive statistics for study variables

Variables Min. Max. Mean S. dev.
Price 0.12000 46.51 2.55 4.4136
EPS −5.0000 3.74 0.0527 0.41874
BV 0.0000 12.18 1.56 1.5348
DACC × EPS −0.4700 1.18 0.0077 0.0919
DACC × BV 0.0000 4.01 0.292 0.3902
DACC 0.0000 6.820 0.2689 0.3067
Price: is the closing share price for a firm i at the end of fourth month of the following year t. EPS: is
the per share earnings for a firm i in year t. BV: is the equity book value per share for a firm i at end
year t. DACC × EPS: interaction variable of DACC and EPS. DACC × BV: interaction variable of
DACC and BV. DACC: discretionary accruals for firm i in the year t

4 Results and Discussions

4.1 Descriptive Statistics

Table 1 provides the descriptive statistics of the study variables. The value of the
absolute discretionary accruals (DACC), which is used as a measure of earnings
management, ranges from the minimum value of zero to the maximum value of (6.82)
with reported mean value of (0.269) and standard deviation value of (0.307). The
value of closing price ranges from the minimum value of (0.12) and the maximum
value (46.51). The reported standard deviation value of closing price of approxi-
mately (3.85) is substantially exceeds the mean value and indicates high variation
in this variable during the study period. The reported value for EPS ranges from the
minimum value of (−5.0) to the maximum value of (3.74). The reported mean value
for EPS of (0.0527) indicates relatively low performance of sample firms during the
study period. The value for book value ranges from a minimum value of almost zero
to the maximum value of (12.18). The reported mean value of book value is (1.516).
The value of first interactions variable DACC*EPS ranges from the minimum value
of (−0.47) to the maximum value of (1.18) with reported mean value of (0.0077).
Finally, The value of the second interaction variable DACC*BV ranges from the
minimum value of zero to the maximum value of (4.0) with reported mean value of
approximately (0.19).

4.2 Correlation Analysis

The reported binary Pearson correlation results in Table 2 indicate that price is posi-
tively and significantly associated with EPS. The reported correlation coefficient
(0.789) is statistically significant at the conventional level (α = 0.01). This result
626 M. Rawashdeh et al.

Table 2 The correlation results for the study’s variables

Variables PRICE EPS BV DACC × EPS DACC × BV DACC
Price 1
EPS 0.789a 1
BV 0.739a 0.664a 1
DACC × EPS 0.699a 0.786a 0.623a 1
DACC × BV 0.582a 0.516a 0.723a 0.640a 1
DACC −0.054 −0.053 −0.145a −0.047 0.194a 1
Price: is the closing share price for a firm i at the end of fourth month of the following year t. EPS:
is the per share earnings for a firm i in year t. BV: is the equity book value per share for a firm i
at end year t. DACCit × EPS: interaction variable of DACC and EPS. DACCit × BV: interaction
variable of DACC and BV. DACC: discretionary accruals for firm i in the year t
a Correlation is significant at the 0.01 level (2-tailed). b Correlation is significant at the 0.05 level

(2-tailed)

is consistent with most prior study’s findings (e.g., [12], Mustafa 2016), Mustafa’s
study which carried out on Egyptian firms provide finding which indicate that both
EPS and BV are positively correlated with share price. Consistent with most prior
studies and this study’s prediction the reported correlation value of (0.739) between
Price and BV, is positive and statically significant at conventional level (α = 0.01).
This result support the value relevancy of BV.

4.2.1 Multiple Regression Results

Table 3 presents the regression results of the general test model (1). The reported
F-value of (375.2) indicates that the regression model is statistically significant at
the conventional level (α = 0.01). The reported Adjusted R2 of 0.27 indicates that
approximately 70% of the variations in the dependent variable (price) is explained
by the model predictors. This result is consistent with most prior study’s findings
(Mustafa 2016) [12].
The reported regression coefficient on EPS of (0.594) is positive and statisti-
cally significant at the conventional level (α = 0.05). Also, the regression coefficient
(0.173) on BV is positive and statistically significant at the conventional level (α =
0.01). These results are consistent with study’s predictions and confirms the findings
of most value-relevant studies (e.g., [2, 16, 19]) which show that both EPS and BV
are highly value relevant for stock price.
A notable observation from the results reported in Table 3 is that the regression
coefficient on EPS (0.594) is substantially larger than the regression coefficient on BV
(0.174), which indicate that EPS ability in explaining price variation is higher than BV
and suggest that EPS is more value relevant than BV. This particular result confirms
prior study’s findings (e.g., [7, 12, 16, 19]) which report regression coefficient for
EPS higher than that of BV.
The Impact of Earnings Management on the Value Relevance … 627

Table 3 The regression results

Variables Reg. Co T-value Sig VIF
(Constant) 1.094 3.971 0.000 –
EPS 0.594 12.434 0.000 6.037
BV 0.174 3.339 0.001 7.207
DACC × EPS −0.113 −2.060 0.040 7.886
DACC × BV 0.283 4.340 0.000 11.264
DACC −0.148 −3.752 0.000 4.099
Dep. Var: price Adj. R2 : 0.217 F-value: 20.01 P < 0.001
Price: is the closing share price for a firm i at the end of fourth month of the following year t. EPS: is
the per share earnings for a firm i in year t. BV: is the equity book value per share for a firm i at end
year t. DACC × EPS: interaction variable of DACC and EPS. DACC × BV: interaction variable of
DACC and BV. DACC: discretionary accruals for firm i in the year t

Together these results provide support for the study’s hypothesis which suggests
that Earnings management activities have an impact on the value relevance of
earnings, and in line with prior related studies finding (e.g., [10, 12]).

5 Conclusions

The study aimed to investigate the impact of earnings management on the value rele-
vance of earnings for Jordanian companies by using a sample of 89 manufacturing
companies listed in Amman Stock Exchange (ASE) over the period (2006–2018).
Empirical findings indicate that earnings and book value are positively and signif-
icantly associated with share price, which is used as a measure of value relevance.
Furthermore, and consistent with most prior related studies’ findings (e.g., [12, 16]),
the study report regression coefficient on EPS substantially higher than that of BV
suggesting that earnings is more value relevant than book value.
The results show that discretionary accruals (DACC) is negatively related to share
prices indicating a direct negative impact of DACC on the firm value. In addition, the
findings provide evidence indicating the indirect impact of DACC on the earnings
price relationship. The regression coefficient on the interaction variable (DACC and
EPS) is negative and statistically significant suggesting that earnings management
practices moderate the earnings -price relationship. This result implies that the value
relevance of EPS reduced with existence of earnings management activities. Overall,
the empirical findings provide support for the notion that earnings management
practices undermined the reliability of accounting information and thus reduce its
relevancy for share pieces.
The study’s findings are likely to be useful for investors, creditors and other
users concerned about the relevancy of accounting information on firm’s value. This
study examined the impact of accrual earnings management on the value relevant of
628 M. Rawashdeh et al.

earnings. Further research could investigate the impact of real earnings management
practices on the value relevancy of earnings.

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A Journey Towards Restfulness
or Restlessness: An Inquiry
into the Impact of Online Education
in Working Women Parents

M. Shashi Kumar , A. Minu , Joshy Mathew , J. Chandrakhanthan ,

and R. Karthika

Abstract The resilience and inquisitiveness of the world for new pastures is a
wonder when it grappled with the pandemic Covid19. It transgressed all spheres of
human life by agreeing with the theory of survival of the fittest. Whatever was ready
to adapt to the unfamiliar order survived this pandemic phase. A revolutionary change
took place in the field of education when the initial inhibition and unwillingness to
adopt technology-enhanced learning faded away. Online platforms and the virtual
world become places of academic deliberations and technology-integrated learning
become the new normal and the end-word of this era. The world witnessed rapid
growth in the development of software and programs enabling the virtual transac-
tion of knowledge. Along with the advancements, studies have been conducted from
multi-dimensional perspectives about the merit, drawback, impact, and validity of this
new mode of education. The present study seeks to explore the impact of the online
mode of education on parents specifically working women parents. The influence of
online classes on the following binaries of mental and physical health, opportunities
and challenges, and achievements and failures in the life of working mothers will
be focused under the purview of this study. The targeted group of this study is 100
working women parents from Bangalore. The study adopts data collection through
a questionnaire and collected data will be analyzed with the help of SPSS.

Keywords New normal · Education · Technology · Working women parents

M. S. Kumar (B) · A. Minu · J. Mathew · J. Chandrakhanthan

Kristu Jayanti College Autonomous, Bengaluru, Karnataka, India
e-mail: [email protected]
R. Karthika
MAM B School, Avaravelli R.F., Tiruchirappalli, Tamil Nadu, India

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 629
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_48
630 M. S. Kumar et al.

1 Introduction

United Nations’ pursuit of sustainable development encompasses many indispens-

able objectives. The noble ideals of gender equality and the empowerment of women
are one of the 17 Sustainable Development Goals of the UN. The selection and
addressing of this as the 5th SDG Goal by the UN shows that the problem pertaining
to gender and moreover the identity of women is not unique to a particular region
but it has a universal appeal [7]. It exists everywhere and is very hard to overcome.
A historical analysis of the status of women reflects an upheaval of the position of
women. Cultural, political, religious, and social elements contributed to this disrup-
tion. The shift from agrarian-based life to industrialized life and culture has opened
new avenues for women. But they are not completely free from the imprints of patri-
archy [5]. Most of the roles of women constructed by the patriarchy still euphemisti-
cally dominate their life. Most of the unpaid work done by women is treated as their
moral obligation and it is always taken for granted. During the pandemic period, the
role of women become more challenging as they have to assume a dual model at
the time such as working from home and working for home. Along with household
works the most challenging responsibility that women faced during this pandemic
time is the education of children.
Gender stereotyping is one of the reasons for casting women in the web of
familial responsibilities. Assertiveness and performance are seen as indicators of
greater agency in men, and warmth and care for others are viewed as signs of greater
communality in women [1, 5]. Most women irrespective of country and culture
dedicate most of their time to household activities than men do even if they are
employed. In 2015, an average difference of 50 min/day in the time spent on house-
work was observed between the male and female members of couples living in the
United States [2, 7]. The perpetuation of gender stereotypes serves to reinforce the
artificially imposed divisions between women and men, thereby lending apparent
legitimacy to the symbolic and societal consequences that accompany gender in
terms of prescribed roles and systemic inequities.
A revolutionary change took place in the field of education when the initial inhi-
bition and unwillingness to adopt technology-enhanced learning faded away during
the pandemic period. Many studies have been conducted on the effectiveness of the
virtual mode of learning and how it impacts the education, mental and physical well-
being of children [9–12]. The present study seeks to explore the impact of online
mode of education in parents specifically working women parents. The influence of
online class on the following binaries of mental and physical health, opportunities
and challenges, achievements and failures in the life of working mothers will be
focused under the purview of this study. The targeted group of this study is 100
working women parents from Bangalore. The study adopts data collection through
a questionnaire and collected data will be analyzed with the help of SPSS.
A Journey Towards Restfulness or Restlessness: An Inquiry … 631

2 Literature Review

Feng and Savani [4], in the paper “Covid-19 created a gender gap in perceived work
productivity and job satisfaction: implications for dual-career parents working from
home” found out that work productivity and job satisfaction were lesser in women
than men during the lockdown period. The study also recommends the need to provide
additional support to women who are in working from home along with managing
household responsibilities and familial obligations.
Chandra [3] in the article “Online education during COVID-19: perception of
academic stress and emotional intelligence coping strategies among college students”
analysed the academic stress experienced by students during current online education
and the coping strategies derived by utilizing emotional intelligence by students
themselves.
In the article “Challenges for Women Entrepreneurs in the Wake of COVID
19 Pandemic” Madhavilatha Sangem explored the current challenges to women
entrepreneurs during COVID 19 and the different methods adopted by women
entrepreneurs to combat the grappling pandemic period [10].
“The impact of the COVID-19 pandemic on maternal and perinatal health: a
scoping review” found out that mothers with children are more likely to suffer job
and income losses during the pandemic than men and women without children. Single
mothers in particular are likely to suffer from food insecurity. These socioeconomic
consequences for women are similar across many high- and low-income countries. It
also stated that pregnancy may constitute a particularly vulnerable period for COVID-
19 and an increased risk of distress and psychiatric problems during pregnancy and
postnatally during the pandemic is more likely than other times [6].
Sharma and Vaish [9] in her article “Impact of COVID—19 on mental health
and physical load on women professionals: an online cross-sectional survey” traced
out that musculoskeletal problems are increased among women professionals as a
result of COVID-19. It also detected that the mental and physical stress on women
professionals increased considerably.
The article “Impact of Covid-19 pandemic on working culture: an exploratory
research among information technology (IT) professionals in Bengaluru, Karnataka
(India)” found out the following results as employees spend more time working
from home, employees start to feel alienated and disengaged due to prolonged
work from home, job insecurity, the need to protect and maintain the organizational
culture, communication gap among team members, and psychological stress, etc.
The study recommended keeping safeguard measures to protect and maintain a work
and organizational culture [8].
The study “Addressing work-life balance challenges of working women during
COVID-19 in Bangladesh” explored the life of Bangladeshi working women. It found
out that socio-cultural elements, enforced family norms, and gender stereotypes are
the root cause of the various challenges that working women faces and it disturbs
the work-family balance [9].
632 M. S. Kumar et al.

3 Objectives

1. To find out the impact of online mode of education of children on working women
parents.
2. To trace out the effect on the physical and mental health of working women
parents due to online mode of education of children.
3. To detect the nature of opportunities and challenges of working women parents
due to online mode of education of children.
4. To measure the rate of achievements and failures of working women parents due
to online mode of education of children.

4 Hypothesis of Study

H0: There is no significant relationship between working women’s restlessness and the online
mode of education of children
Ha: There is a significant relationship between working women’s restlessness and the online
mode of education of children

5 Methodology

The study follows an empirical method wherein both the primary and the secondary
data were collected and analyzed. Secondary data collection was taken place by
referring various repositories including websites, books, and scholarly journals,
and A meticulously designed structured questionnaire was employed to collect
primary data, focusing specifically on the experiences and perspectives of 100
working women. The sampling approach employed for data collection followed
a convenience-based methodology. The data were analyzed and interpreted with the
help of SPSS software. Statistical tools are Regression, Paired T-Test, and Anova.

6 Analysis and Interpretation

For the analysis impact of the online mode of education of children on working
women parents used Regression analysis (Table 1).
From the above-shown table R Square Value = 0.717 which means 71.7% positive
impact of online mode of education of children on working women’s restlessness.
The F value of the model = 4.115 and significant value = 0.001 which is less than 0.05
A Journey Towards Restfulness or Restlessness: An Inquiry … 633

Table 1 Regression variable and its impact on online education

Dependent variable Impact of online mode education of children
Predictors (Independent Variable) Mental health, extending working hours of academic
deliberations, technology-enhanced learning, Physical health
R Square value 0.717
F value of the model 4.115
Significance 0.001

hence research has got enough evidence to prove the statement. It means there is an
impact of the online mode of education of children on working women’s restlessness.
To trace out the effect on the mental and physical health of working women
parents before and after the implementation of online mode of education of children
(Table 2).
The above table explains the paired difference between the mental and physical
health of working women parents before and after the implementation of online mode
of education of children in which it can be seen that there is a difference and paired
t-test values are 6.513,23.127and degree of freedom is 99, significance level (5%)
is p and p values of these variables 0.000,0.000, from which researcher comes to
a conclusion i.e., there is a paired difference in the mental and physical health of
working women parents before and after the implementation of the online mode of
education of children.
An analysis is made to find out the relationship between the online mode of
education of children and working women’s restlessness by testing the hypotheses
using a one-way Anova test.
H0: There is no significant relationship between working women’s restlessness and
the online mode of education of children.
Ha: There is a significant relationship between working women’s restlessness and
the online mode of education of children (Table 3).

Table 2 Paired difference

Mean Std. deviation T df Sig. (2-tailed) Hypothesis
Pair1 Mental health 0.93333 0.78492 6.513 99 0.000 Accept Ha
Pair2 Physical health 3.03333 0.71840 23.127 99 0.000 Accept Ha

Table 3 One-way Anova

Sum of squares df F Sig.
Between groups 2.073 3 0.687 0.048
Within groups 66.517 96
Total 68.590 99
634 M. S. Kumar et al.

Level of Significance = 5% (0.05)

One way ANOVA test was conducted to find out if there is any significant rela-
tionship between working women’s restlessness and the online mode of education
of children.
The test result shows that.
F = 0.687, P value = 0.048.
Since P value is <0.05, the result is significant.
Therefore, Ha : is accepted.
There is a significant relationship between working women’s restlessness and the
online mode of education of children.

7 Findings

The age group of the majority of the women who took part in the study is from 30
to 45.
The majority of the women are working in the private sector.
The income range of the majority of the women in this study ranges from Rs.
25,000–40,000.
The educational qualification of the majority of the women in this study is between
graduation and post-graduation.

8 Conclusion

The impact of the online mode of education of children on working women parents
is greater than on working men parents. It accelerates health issues and leads to an
increase in BP, sugar levels, anxiety issues, sleeplessness, and fatigue. The high-stress
level is beyond their control and it results in an imbalance of their life. It increases the
challenges of working women parents compared to working men parents [7]. There
is a considerable amount of loss in opportunities due to the acceleration of physical
and mental stress as an impact of the online mode of education of children. The
achievements of working women parents before the implementation of the online
mode of education of children are greater than the achievements of working women
parents after the implementation of the online mode of education of children. The
failure rate in the both professional and personal arena of working women is higher
compared to the time of offline mode of education of children.
A Journey Towards Restfulness or Restlessness: An Inquiry … 635

9 Recommendations

Programmes should be organized for both men and women to create awareness about
this disparity in unpaid and household work and make them alert the need to have
women-friendly policies in household work.
Enhance flexible working space for women, specifically working mothers.

References

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Studies 10(2), 229–238 (2021). https://doi.org/10.1108/AEDS-05-2020-0097
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Psychology of Women: A Handbook of Issues and Theories, vol. 2, pp. 205–236. Praeger, New
York (2008)
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Investigating the Impact of COVID-19
on Organizational Performance the Case
of Sappi Saiccor in Kwazulu-Natal

Kusangiphila Kenson Sishi, Vannie Naidoo, and Saad Darwish

Abstract This research presents the findings of a qualitative study that aimed to
examine the effects of the COVID-19 pandemic on the performance of Sappi Saic-
cori, a company located in Umkomaas, KwaZulu-Natal. The study focused on key
management personnel and their perspectives on the impact of the pandemic on the
organisation’s performance. The study utilised purposive sampling, which is a non-
probability sampling technique. The study employed an interview schedule as a data
collection tool to elicit responses from participants at Sappi Saiccori in Umkomaas
regarding their perceptions of the impact of the pandemic on organisational perfor-
mance. The findings of the comprehensive thematic analysis conducted identified
four key themes that significantly affect organisational performance. These themes
include decreased employee productivity, emotional and psychological distress,
modifications in work arrangements, inadequate social support and employee well-
being. Suggestions were presented to the managerial authorities to mitigate the
disparities in organisational efficacy that emerged due to the COVID-19 outbreak.

Keywords Covid19 · Human resources · Organizational performance ·

Productivity · Emotional distress

1 Introduction

Organisational performance is an important area to investigate, as it affects the

company’s financial bottom line. If a company is not performing well, then it can
lead to big financial losses and future closure. Many factors can affect organisational
performance, but for this study, the researchers will concentrate on how COVID-19

K. K. Sishi · V. Naidoo
University of KwaZulu-Natal, Durban, South Africa
e-mail: [email protected]
S. Darwish (B)
Kingdom University, Riffa, Bahrain
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 637
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_49
638 K. K. Sishi et al.

affects an organisation’s performance [11–14]. The COVID-19 pandemic affected

the South African business sector. Sappi Saiccor also felt the ramifications of the
pandemic on its’ organisation operations. The study aimed to shed more light on the
impact COVID-19 had on Sappi Saiccor’s organisational performance.

2 Overview of Sappi Saiccor in KwaZulu-Natal

The study was conducted at Sappi Saiccor, Umkomaas, in KwaZulu-Natal, South

Africa with workforce of 1200. South African Pulp and Paper Industries (SAPPI)
Limited was founded in 1935. It is 50 km south of the port of Durban in KwaZulu-
Natal, South Africa. It is one of the production facilities for Dissolving Wood Pulp and
production facilities. The mill can produce approximately 800,000 tons of elemental
chlorine-free (ECF) dissolving wood pulp (DWP) annually, mainly for the export
market. This company is the world’s single largest manufacturing site for dissolving
pulp, and it has played a vital role in establishing Sappi as the global market leader
in dissolving pulp.

3 Research Statement

What effect has COVID-19 had on the performance of the human resources at the
selected company?

4 Research Objectives

The purpose of this research was to examine how the COVID-19 pandemic affected
organizational performance in the selected company.

5 Literature Review

5.1 Covid 19 and South Africa Business

The notable increase in occurrences of chronic pneumonia in Hubei province’s

Wuhan, China has attracted considerable worldwide interest. This is the location from
which the virus originated. According to [10], the 2019 novel coronavirus (COVID-
19) was initially discovered in December 2019. The identification of this virus was
based on laboratory test results and the manifestation of symptoms. As per [16]’s
Investigating the Impact of COVID-19 on Organizational Performance … 639

recent publication, the global impact of COVID-19 and the resulting destruction it
has caused to various nations is evidently ubiquitous, as can be observed through
media outlets. Like numerous other nations, South Africa expeditiously formulated
policies to support corporate enterprises and SMEs, under the Disaster Management
Act. The country implemented these policies and procedures to ensure the safety
of all South Africans. The COVID-19 pandemic has necessitated a change in the
operational procedures of various sectors including businesses, hospitals, schools,
and other societal domains [8, 9].
To mitigate the spread of infection and reduce the infection rate, it is imperative to
adhere to certain preventative measures such as wearing masks, regularly sanitising
one’s hands, practising social distancing, and limiting exposure to densely popu-
lated areas such as shopping malls and other public spaces by staying at home. The
emergence of COVID-19 in South Africa in 2020 constituted a significant human-
itarian crisis and pandemic of unprecedented magnitude. COVID-19 has caused
widespread illness, mortality, and devastation, impacting all aspects of global society.
The commercial industry and its diverse constituents suffered a severe blow, as the
implementation of lockdown measures resulted in the temporary cessation of busi-
ness operations for several weeks or even months. The COVID-19 pandemic has had
a negative effect on the business sector in South Africa. The business operations of
Sappi Saiccor, located in Umkomaas, KwaZulu-Natal, were significantly affected by
the pandemic, thereby adversely impacting its overall organisational performance.
This is attributed to the fact that Sappi Saiccor is a large-scale enterprise operating
in South Africa.

5.2 Conceptualizations of Organizational Performance

Coetzee and Steyn [7] define “organisational performance” as the concrete results
or accomplishments of an organisation, which are assessed in relation to its pre-
established outputs, objectives, and goals. Al-Sartawi et al. [1] posits that organi-
sational behaviour can be impacted by various factors such as socially responsible
conduct, cross-cultural activities associated with expansion and adaptation, and other
phenomena at the sectoral or organisational level [20].

5.3 Impact of Covid-19 on Organizational Performance

The global effects of COVID-19 on employees and organisations have been signif-
icantly detrimental. The COVID-19 pandemic has engendered a tension between
prioritising profitability and safeguarding the well-being of employees within organ-
isations. According to [13], the imposition of lockdown measures on industries,
organisations, and businesses was intended to mitigate the transmission of the
virus. However, this action has resulted in significant difficulties for employees and
640 K. K. Sishi et al.

employers worldwide. The COVID-19 pandemic has disrupted conventional work

routines, leading to an expedited shift towards online or virtual work environments
for employees operating within an organisation. The COVID-19 pandemic expe-
dited the adoption of Work from Home for many individuals. It has had significant
influx on both employees and organisations worldwide. The COVID-19 pandemic
has created a dilemma between prioritising profitability and ensuring safety. The
COVID-19 pandemic has resulted in noticeable effects, particularly in the disruption
of financial streams caused by the closure of businesses due to lockdown measures.
Implementing restrictions and closures in businesses has threatened their produc-
tivity and sustainability by significantly reducing their revenues and disrupting their
supply chains [20].

6 Research Methodology

The research utilised a qualitative methodology and executed an exploratory investi-

gation. In this section, we will discuss the exploratory study. Exploratory research is
a frequently employed research design by qualitative researchers and is considered
one of the primary types of research. Sekaran and Bougie [17] posit that exploratory
research is a research design that facilitates the generation of additional insights
into a specific phenomenon and, subsequently, the development of focused research
questions that can be investigated through extensive studies. According to [3], using
an experimental research design enables the researcher to assess the viability of
conducting a comprehensive investigation and formulate specific research inquiries
for further exploration. Sekaran and Bougie [17] posit that a deductive and qualita-
tive approach characterises exploratory research. Babbie [2] posits that exploration
is warranted when there is limited knowledge about the research topic, variables,
or situation being investigated. Given that COVID-19 was a novel occurrence for
organisations, a qualitative study was deemed appropriate to elicit comprehensive
perspectives on this unprecedented phenomenon and its impact on organisational
performance. The methodology facilitated the researcher in obtaining the partici-
pants’ perspectives about the subject of inquiry via in-person interviews. The util-
isation of Microsoft Teams facilitated the acquisition of comprehensive data from
participants via in-person interviews conducted by the researcher.
The research was conducted at Sappi Saiccor in Umkomaas, KwaZulu-Natal,
South Africa. SAPPI Limited, a company based in South Africa, was established in
1935. A production facility for Dissolving Wood Pulp is positioned approximately
50 kms to the south of the port of Durban. As per [5] scholarly work, purposive
sampling is a sampling methodology in which the researcher deliberately selects the
individuals to be included in the sample. To find and choose appropriate managers and
HR managers, deliberate sampling was used who possess the requisite experience
and knowledge of organisational performance to participate in the interviews. As
mentioned earlier, the study employed purposive sampling to collect targeted data
from the participants via interview sessions.
Investigating the Impact of COVID-19 on Organizational Performance … 641

Consequently, human resources personnel, HR managers, and seasoned

employees facilitated the researcher in acquiring comprehensive data about the
subject matter being examined. The study interviewed a sample of ten manage-
rial employees at Sappi Saiccor, consisting of one HR manager, two production
managers, two operations managers, three heads of departments, and two super-
visors. The researchers exercised their discretion to determine that these pivotal
participants were most capable of furnishing comprehensive insights and perspec-
tives on the subject matter about the key personnel at Sappi Saiccor. Consequently,
an interview protocol was formulated.

6.1 Thematic Analysis

The phase of thematic analysis is initiated after the coding and collation of data,
as per [6] methodology. During this stage of the thematic analysis, the codes were
organised into potential themes and the corresponding coded data extracts were
gathered within the identified themes. At this juncture, themes were derived from the
dataset and the theoretical framework that served as the foundation of the research.
During the process of identifying themes, a set of predetermined codes was initially
established to facilitate the analysis of the data. Identifying pertinent themes was
undertaken to facilitate comprehension of the phenomenon being examined. Mind
maps were a graphical tool to categorise diverse codes into distinct themes. Specific
codes were designated primary themes, while others were classified as secondary.
Furthermore, a collection of codes that lacked a specific category was generated and
designated as “miscellaneous themes”. The current stage of the research process
entails a comprehensive examination of the previously identified themes within the
dataset, as outlined by [6]. The coded data extracts for all the themes were evaluated
to determine their cohesive patterns. Furthermore, an analysis was conducted on the
individual themes to determine their accuracy in representing the meanings derived
from the entire dataset. Furthermore, the investigation ensured that every recognised
theme was substantiated with empirical evidence. Specific themes were merged,
whereas others were categorised into distinct themes. Moreover, the information was
condensed into a feasible collection of pertinent themes that concisely encapsulated
the text [15].
A comprehensive examination was carried out to ascertain the narrative conveyed
by each thematic element. In addition, designations were allocated to each theme to
facilitate readers’ comprehension. The themes were meticulously selected to align
with their respective narratives by the research inquiries, as per the dataset. The
study sought the input of external experts with proficient knowledge in qualitative
data analysis and research to ascertain the adequacy of the themes in terms of clarity
and comprehensiveness. The dataset underwent peer debriefing to facilitate the audit
trail and inform methodological choices.
The production of the paper is encompassed within this particular phase, as
[6] noted. It presents a succinct, coherent, and engaging data description within
642 K. K. Sishi et al.

and across different themes. According to [19], it is recommended that researchers

effectively communicate the analytical procedures utilised to obtain their results
in a manner that is comprehensible to discerning readers. This approach is crucial
in ensuring the data is trustworthy and convincing. During this phase, records of
trustworthiness and audit trial were maintained, facilitating the reporting process..
Furthermore, incorporating additional quotations bolsters the identified themes
derived from the dataset, thereby affording readers a deeper understanding of the
primary text.

7 Discussion of Qualitative Data

Through thematic analysis, it was determined that four themes had the most signifi-
cant influence on the study. These themes included decreased employee productivity,
emotional and psychological distress, alterations to work arrangements, and a lack of
social support and employee well-being. The study’s key themes will now be utilised
to examine and analyse them.

A. Decreased Employee Productivity

As per the study, the COVID-19 pandemic had an adverse impact on the work
productivity of the employees at Sappi Saiccor located in Umkomaas. As per the
statements provided by the interviewees, the pandemic has resulted a decrease in
employee work output, thereby causing suboptimal performance levels at Sappi
Saiccor located in Umkomaas. The following quotes served as evidence to support
this finding. The COVID-19 pandemic has had a detrimental effect on our operations.
We have observed a significant decline in attendance due to concerns surrounding
the virus, which has subsequently impacted employee productivity. Additionally, we
have noticed that some employees are struggling to maintain their focus and well-
being due to personal circumstances such as the loss or illness of family members.
Participant 2, a male, expressed concern regarding the potential fear experienced by
employees who are uncertain about their future.
The global impact of the event necessitated widespread measures, resulting in
the closure of entire nations and various institutions. The COVID-19 pandemic
has great impact on organisations, resulting in a hindrance to employees’ ability
to perform their duties and responsibilities efficiently. Due to unforeseen circum-
stances, employees were unable to physically attend work and were required to work
remotely from their homes. Certain employees were unable to fulfil their responsi-
bilities due to an unsuitable work environment, and a few were even furnished with
the necessary resources to work remotely. The employees were unable to perform
their duties due to an unsuitable work environment.
The COVID-19 pandemic has led to employee fatigue because of reduced
personnel available to carry out various duties. The implementation of COVID-19
restrictions and remote work arrangements has resulted in a notable decline in the
Investigating the Impact of COVID-19 on Organizational Performance … 643

psychological well-being of a considerable portion of the workforce. Participant 4

is a male individual.
From a critical standpoint, it is important to acknowledge that while employees
are present for work, their personal lives and backgrounds cannot be disregarded.
Numerous employees have experienced a loss of direct connections with their
acquaintances or have been indirectly affected from a social standpoint. This has
resulted in a negative impact on their workplace performance, particularly with
regards to complying with additional rules and regulations such as wearing masks
and sanitising. The male personnel at the facility are observed to be constantly in
motion throughout the day, and have expressed difficulty in breathing while wearing
their protective masks. Additionally, when safety glasses are worn, they tend to
fog up, thereby impeding the visual acuity of the employees. The reduced pace of
work was further compounded by intermittent plant closures and the close proximity
of contractors and personnel. Participant 7, a male, has reported that adherence to
COVID-19 regulations has resulted in a slowdown of work. This is due to the need
to maintain a minimum distance of 2 m between individuals, which has impacted the
speed of work completion.
The organisation experienced a significant level of absenteeism due to employee
concerns regarding the virus, which had a notable impact on their job performance.
As a result, there was a shortage of available personnel to fulfil necessary duties.
According to Participant 8, a male employee, many individuals encountered difficul-
ties while working remotely and were unable to meet their deadlines. Based on the
perspectives shared by the study’s participants, it can be inferred that COVID-19 had
a negative impact on employees’ productivity, resulting in suboptimal organisational
outcomes.

B. Emotional and psychological distress

Employees are experiencing a negative state of mind, which is impacting their work
performance and personal lives. This emotional burden is carried into the workplace,
resulting in decreased productivity and overall well-being. Several employees have
reported experiencing significant personal loss, with some indicating that they have
lost multiple family members within a short period of time. The situation has been
difficult for all involved. Participant 2 male. According to Participant 4, a male
employee, a significant number of employees were experiencing negative mental
states because of COVID-19 restrictions and remote work.
Numerous individuals experienced apprehension and anxiety regarding the possi-
bility of contracting the virus. This was a common and understandable concern.
Therefore, we made efforts to provide them with ample protection in the form of
masks, sanitizers, and personal protective equipment, as well as information and
knowledge sharing. “We made every effort to keep them informed regularly in order
to alleviate their concerns,” stated Participant 6, male. Additionally, there was a risk of
infection both inside and outside of the workplace. Balancing work and home life has
also been challenging during this time. These issues were expressed by Participant
7, male.
644 K. K. Sishi et al.

Individuals experienced a pervasive sense of fear in relation to COVID-19, and

the stress induced by the virus resulted in the loss of family members within the
workforce. A considerable percentage of the workforce demonstrated inadequate
psychological states that impeded their capacity to perform their job responsibilities.
The male identified as Participant 8 conveyed a negative sentiment, expressing that
the situation had been unfavorable.
C. Alterations to work arrangements
The present study revealed that the COVID-19 pandemic necessitated modifications
in the work arrangements of the organisation in question. The findings of the inter-
views indicate that a significant proportion of the participants held the perspective that
the COVID-19 pandemic necessitated modifications to the work arrangements within
the organisation. According to the participants, COVID-19 has changed how work
is conducted, such as reducing the number of on-site employees, enabling remote
work, and implementing staggered shifts to ensure physical distancing among on-site
personnel. I will examine the actions that have been taken within this organisation.
“We have adopted measures to ensure the safety of our employees, including
the administration of a survey at the outset to promote awareness of COVID-19,
its ramifications, and its potential impact on individuals. We provided COVID-19
education to our employees and maintained consistent communication regarding
the virus. We aggregated accounts of individuals who have already been impacted
by the virus, intending to disseminate information regarding how they contracted
it. The corporation heightened cognisance regarding the COVID-19 pandemic and
advocated for remote work. We increased our transportation capacity by a factor
of two to reduce the number of individuals per taxi for the employees who were
mandated to commute. As a chemical organisation, we produced our hand sanitiser
and distributed it throughout all the buildings on our premises and across the nation”.
It was reported by Participant 1, Male.
One potential approach for organisations is to closely monitor government
communications and implement the Disaster Management Act in order to reduce
unnecessary expenditures. If the organisation occupies a larger space, it may be
advisable to negotiate and relocate to a smaller space, given that a significant number
of employees may be working remotely while only a few come into the office. As
stated by Participant 3, a male contributor, it is imperative to minimise shifts in
organisations that operate on a shift basis in order to adhere to social distancing
guidelines.
The implemented strategies aimed to provide training to our employees on how to
maintain their safety amidst the pandemic. A limited number of critical staff members
reported to the physical workplace while the remaining workforce operated remotely.
We disseminated information regarding the pandemic and its prevention measures to
increase public awareness. "We implemented screening measures for all individuals
entering the company’s premises, and employees displaying symptoms were advised
to remain at home," reported Participant 4, who is male.
The company’s approach is to align with the government’s directives, avoiding
non-compliance. Our actions have entailed adhering to governmental regulations
Investigating the Impact of COVID-19 on Organizational Performance … 645

and implementing additional measures. Participant 5, a male, suggests that if the

government mandates a 50% on-site employee limit, a more stringent and regulated
approach should be implemented to allow only 25% of employees on-site. This
approach aims to ensure that individuals are well-informed about the pandemic and
equipped with knowledge on how to maintain their safety.
An attempt was made to segregate individuals by implementing two distinct shifts,
namely the 6–2 shift and the 2–10 shift, to maximise physical distancing. Another
approach involved relocating individuals from their workstations to enable physical
distancing. A partition was implemented to ensure compliance with masks, sanitisers,
and other essential personal protective equipment. The study revealed that most
infections occurred outside the premises instead of within, with a notable increase
during the second wave of the COVID-19 pandemic. It was reported by Participant
6, Male.
Due to the inability to operate at total capacity, additional transport services
were procured to facilitate commuting for individuals to their workplaces and resi-
dences. The quantity of transport services was doubled to enable the observance of
social distancing protocols among employees. Furthermore, we have expanded the
duration between work shifts. The employee I work with has been absent for three
weeks, indicating a shift-based separation. Additionally, the organisation has height-
ened consciousness and disseminated all pertinent details regarding COVID-19 and
measures to ensure safety. Participant 8, a male, stated that their chemical company
has also produced sanitisers. Based on the testimonies provided by the participants
in the study, it can be inferred that COVID-19 impacted the reconfiguration of work
arrangements within the organization.
D. Lack of support and employee well-being
According to the study, COVID-19 has resulted in a lack of social support and well-
ness for employees within the organisation. Four participants, constituting 50% of
the sample, expressed the perspective that the COVID-19 pandemic had a detri-
mental impact on the social support and wellness of employees at Sappi Saiccor in
Umkomaas. The subsequent voices of the participants that were presented provided
corroborating evidence for this discovery. According to a male participant (Partici-
pant 2), employees are experiencing a negative state of mind not only in the workplace
but also in their personal lives. As illustrated by tales of workers who have experi-
enced the sudden loss of many family members, this has led to employees carrying
their emotional burdens to work. Distressing is how the scenario is characterised.
“Stress levels were greater; they feared getting the COVID-19 while also being under
pressure to produce and adhere to deadlines. Their performance suffered because of
the stress levels. Because workers are having personal issues and sought assistance
with such issues, the number of EAPs has climbed over the months since March.
Most workers are not used to collaborating closely with their spouses or working
from home (Participant 3, Male).
COVID-19 led to weariness since there were fewer personnel required to do a
variety of activities. Due to COVID-19 constraints and working from home, the
majority of workers were not in a good mood, according to Participant 4 (Male).
646 K. K. Sishi et al.

“We were all terrified about COVID-19, and the deaths of family members brought
stress to the workplace. The majority of workers were not in an appropriate mental
condition to carry out their duties. It’s been awful,” said participant 6 (a man).
Employee wellbeing and social assistance were taken away by COVID-19. The
results of the qualitative analysis point to a decline in staff productivity as a result
of the COVID-19 epidemic. Employers and workers worldwide faced considerable
challenges as a result of the global installation of lockdown measures by businesses
intended to stop the virus’s spread. According to [20], the COVID-19 epidemic
made it impossible for many firms to maintain social distancing policies and make
the switch to remote work. Individuals have struggled to fulfil deadlines as a conse-
quence, which has a detrimental effect on organisational performance. The COVID-
19 pandemic has provided a challenging position for human resource management,
according to [18]’s conclusions. In particular, managers are in charge of helping
staff members manage and adapt to the considerable changes that have taken place
at work. Around the globe, the COVID-19 epidemic has had a profound impact on
both workers and companies. The COVID-19 epidemic has created a conflict between
putting economic growth first and protecting public safety and health [4–6].
The interruption of money sources brought on by the shutdown of enterprises
as a result of government-imposed lockdown measures demonstrates the immediate
impact of the COVID-19 epidemic. Businesses’ productivity and sustainability have
been put at risk by limitations and closures, which have considerably decreased
their revenues and disrupted their supply networks. According to [18] analysis, a
major effect of COVID-19 is expected to be a loss in operational efficiency for many
organisations. Sintema [18] asserts that the methods businesses use to stop the spread
of COVID-19 and any subsequent actions taken to stop long-term effects might have
an effect on the productivity of their staff. Despite governmental limitations forcing
the majority of firms to stop operating, certain organisations took steps to maintain
worker productivity and speed their recovery.

8 Recommendations

8.1 Providing a Safe Work Environment

Staff felt very scared during COVID-19, and this led to absenteeism. The company
should ensure they have proper safety in place to protect their employees during
COVID. The workplace should have social distancing protocols in place. Use of
protective gear must be in place, and all entrances should have sanitisers so that staff
can use them when necessary.
Investigating the Impact of COVID-19 on Organizational Performance … 647

8.2 Training of Staff

Staff should have proper training if they are required to migrate to online platforms
or, where possible, where they have to work from home. The training will assist
them in being better equipped to work with new technologies and online portals.
The training can also be beneficial to assist staff on how to manage their time when
working from home.

8.3 Proper Wellness Support Should Be Provided to Staff

During COVID-19

Proper support and wellness programs must be placed within the organisation to
foster the good emotional well-being of employees. Staff wellness programs can
provide online counselling sessions for those dealing with COVID or who have lost
loved ones due to the pandemic. The organisation can bring a guest speaker, like a
health professional or doctor, to speak online or Face to Face staff. They can provide
guidelines on keeping staff safe and healthy during COVID-19.

8.4 Management Having Better Understanding and Empathy

Towards Staff During the Pandemic

COVID-19 brought many emotions to the surface. It brought sickness and sometimes
loss and sadness that added to the stress levels of staff. Proper training should be in
place for senior supervisors and managers to be better trained to react to emotionally
charged situations like a pandemic. A pandemic is unique, and stress and emotions
brought on by not knowing whether the pandemic will kill staff had devastating conse-
quences on the minds of staff. Treating staff with care, empathy and consideration
was required as well.

9 Conclusions

COVID-19 was a new and unique phenomenon, and in this paper, the researchers
critically outline a few key areas that COVID-19 impacted organisational perfor-
mance. This new information in the African continent can benefit other organisations
facing similar challenges. COVID-19 affected all areas of life, business included.
Employers had to draw up new policies in keeping with the government and labour
laws regarding COVID-19. Employees had to deal with significant adjustments that
came with COVID-19. The various lockdowns forced many companies to migrate to
648 K. K. Sishi et al.

online platforms, Sappi Saiccor, Umkomaas, included. It created many challenges.

The paper clearly outlines recommendations that could assist Sappi Saiccor, Umko-
maas, going forward. More studies in Africa on the different industries should be
conducted to ascertain and compare the impact of COVID-19 on organisation perfor-
mance. Since there is a limited body of knowledge in this field of study, these studies
are highly regarded in academia. Future studies can specifically focus on other areas
of workplace performance, such as discipline and how its impacts employees during
the COVID-19 pandemic. Studies on leave policies and wellness programs and how
they impact employees during COVID-19 are also required to add more knowledge
to organisational performance and the pandemic.

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Traditional Human Duties
and the Challenges of Digitization

Ismail Noori Mseer and Nadra Tawfig

Abstract A new digital care ethic is required. To regain control over our time, as
well as our digital footprints and shadows, we must adopt and practice the philos-
ophy of slow computing. This involves taking a step back and releasing the digital
leash. If we pursue individual and collective, pragmatic, and political initiatives, we
stand to enjoy computers while reducing some of the more negative features of the
coming digital society and economy. We broaden our central thesis by elaborating
on the philosophical foundations of and for slow computing. The goal is to provide
a justification and urgency for delayed computing, which would apply to the larger
society and businesses. While we can embrace specific acts as they fit and practice
slow computing without adhering to a slow philosophy or joining a slow computing
movement, our practices are more meaningful and have a greater impact when they
are based on a coherent set of concepts and principles that support and encourage
them.

Keywords Digitization · Human duties · Cyber · Information technology

1 Introduction

An incredible illustration of how information technology (IT) can replace or enhance

traditional human duties is digitalization in the legal sector. This phenomenon of digi-
tization is being fueled by the current advancements in artificial intelligence (AI) (big
data, machine learning, natural language processing, etc.). There are many different
operational examples of digitalization in the legal field, from investigating patent
classifications to forecasting the results of judicial disputes (e.g., the anticipation of

I. N. Mseer (B)
Ahlia University, Manama, Bahrain
e-mail: [email protected]
N. Tawfig
University of Business and Technology, Jeddah, Saudi Arabia

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 651
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_50
652 I. N. Mseer and N. Tawfig

predictable damages from an action). 2 E-discovery3 and the digitization of legal

document organization and review are further topics that can be brought up [1].
Understanding the main normative justifications for slow computing is an issue
here. By “normative,” we imply a way of thinking that focuses on how things ought
to be rather than how they are [2].
The distinction between “genuine” photos and those that have been digitally modi-
fied has become hazier as a result of the phenomenal expansion of digital imaging in
recent years. The majority of our films and print commercials use incredible effects
to produce pictures that appear real but are not.
Films have been the most popular recording medium for scientific images seen
through Microscopes over the previous few decades. Because it was challenging to
change once the exposure was made and the film or print produced, the film has been
widely considered a legitimate, historical recording medium. The scientific commu-
nity has been motivated to switch from photographic methods to digital images due to
advancements in computing power, image resolution, and environmental concerns.
Now, procedures that used to take hours or days may be completed quickly. All of
the photography processes that once required a darkroom may now be completed
using imaging software like Adobe Photoshop and a lot more. The image can be
“burned” onto an unchangeable CD or DVD. Inkjet prints may now compete with
photographic prints thanks to the rapid advancement of printer technology. Images
are frequently distributed digitally, and viewers can see them on displays that get
better. The quality of digital photos is approaching photographic quality for a frac-
tion of the price as digital imaging gear advances, and publication-quality images
are produced in a fraction of the time needed for film-based photography [3].
How can a state respond to becoming the focus of propaganda campaigns by
another state without jeopardizing the moral position it is trying to uphold? This
paper contends that the idea of moral authority provides a novel background for
resolving this conundrum. Only when an actor’s behavior does not vary from partic-
ular moral norms can it use moral power as an authority resource to have its arguments
prioritized by others and to garner support for its activities. A person fighting digital
propaganda needs to cultivate six normative qualities to gain moral authority: truthful-
ness, discretion, and effectiveness to show the nature of the adverse effects of misin-
formation; responsibility, honesty, and usefulness to establish the actor’s normative
position to participate in counter-intervention; and responsibility to demonstrate the
proportionality of the reaction [4].
Digital and social media technologies have given rise to new possibilities and
methods of seeing, thinking, being, and communicating. They have altered the way
we see and interact with technology, as well as how we view ourselves and interact
with others. Although these innovations present never-before-seen opportunities,
they are also disruptive since they depart from the past and alter accepted norms,
attitudes, and behaviors, posing severe and new hazards and ethical dilemmas. The
quick pace of technology prevents the possibility of critical analysis and evaluation of
its consequences and implications adds to these difficulties. As a result, it explores the
idea of digital professionalism and some of the ethical issues related to online interac-
tion and identities. To emphasize the requirement for digital professionalism, it opens
Traditional Human Duties and the Challenges of Digitization 653

with a case study from the HCPC fitness to practice hearings and highlights some
of its learning. The term “digital professionalism” is then defined, and some distinc-
tions between online and offline environments are examined along with their effects
on digital professionalism. This includes a discussion of the information-sharing
domains and the Social Media Activity and Reflection Tool (SMART) mapping for
visualizing and considering one’s online persona and social media participation as a
part of one’s digital citizenship and professional online presence. A summary of the
information, skills, and abilities needed for digital professionalism is then provided,
along with a framework for building, maintaining, and assessing an online identity
and presence.

1.1 Online Professionalism and Morals

This first case study highlights the importance of digital professionalism when using
social media. It draws attention to a fitness to practice hearing and a decision made
by the HCPC regarding a social worker’s use of Facebook in connection with a case.
Using Facebook both personally and professionally, for instance. An experienced
children and family social worker posted the following note on her Facebook page
on the day of a court hearing for a case that had been transferred to her around three
weeks earlier [5].

1.2 In the face of Racism

Interconnectedness, as in her 1989 essay “Demarginalizing the Intersection of Race

and Sex: A Black Feminist Critique of Antidiscrimination Doctrine, Feminist Theory,
and Antiracist Politics,” Kimberlé Crenshaw introduced a phrase and a framework.
She begins the piece by stating that: Crenshaw argued that intersectional, multi-
axis analysis must be the focal topic of research in order to comprehend how “black
women are subordinated fully.” In order to recognize the impacts and scope of “com-
pounded” harm on women of color in legal settings, she employs “intersectionality”
as the primary lens through which to reexamine the accounts of women of color in
court hearings [4]. In the writings and assertions of the Combahee River Collective
in the 1970s and their vocalization of a black women’s liberation that discusses the
connections of gender, race, and sexuality, a significant portion of her exploration of
intersectionality has a recognizable black feminist pedigree.
We have contended that pedigrees of reproach—often emanating from perilous
race and legal concept—have been omitted in talks of technological civilizations and
buzzwords. Talking about intersectionality means putting black feminism critical
racial work is front and center, especially as it developed in the 1970s and 1980s
in terms of shaping African American feminist movements and legal debate. I am
also aware of conversations by black, indigenous, and women of color (BIPOC)
654 I. N. Mseer and N. Tawfig

activists in widely attended public settings that criticize the antiblack use of the term
“intersectionality” to mean something that is somehow “universal” for all bodies [6].

1.3 Cyber psychology

As new inventions advance and increase in our daily lives, cyberpsychology is a

growing area of psychology that is becoming increasingly important. Cyberpsy-
chology is a field that combines elements of media psychology, emotional computing,
digital psychology, and human-computer interaction [7].
While few have substantial capability working as ethicists, and most cyber
psychologists are not philosophers, they frequently deal with ethical problems and
puzzles. These vary from debating and weighing the complex challenges involved
in research to raising daily knowledge of distributive impartiality as they deliberate
the unequal distribution of technologies in civilization. These circumstances might
be difficult and even confusing at times [8].

1.4 Language and Memory

An ecological and humanitarian disaster is affecting the entire linguistic commu-

nity. Simon Gikandi writes in a moving meditation in PMLA that language dying
worldwide is a subject of urgent social concern and that the loss of any language
(and of a culture nourished by it) is a cause for sorrow. He reflects on the moral
and political ramifications of prevalent language loss, recalling his distress when
the “UNESCO Atlas of the World’s Languages in Danger presented me with the
sad reality of language endangerment measured in maps, graphs, and data sets.” He
concludes by citing and interpreting a poem by the anthropologist Miguel León-
Portilla that “capture[s] what occurs when a language dies,” building to the stern
conclusion: “Letting a language die is an injustice, a denial of the will to those who
speak it.” This persuasive essay transitions from figurative language death talk to a
moving elegy that reflects a solid affective and political commitment to the survival
of languages [9].
The use of digital audio sampling by producers, engineers, and artists has grown
over the past several years to the point where the sampler is now just as common in
recording studios as the microphone. A sound snippet of one to several seconds can
be compressed into a digital binary form and kept in computer memory using digital
samplers. This recorded sound can be played back over a keyboard while having its
pitch and tone characteristics faithfully replicated or, as is frequently the case, edited
electronically. The sampler’s unmatched mimetic powers have made it a popular tool
for storing notes or sets of notes played by musicians with distinctive playing styles
in computer memory. One could create a complete solo line that, when played back
through a keyboard, may appear to be played by that individual. With no discernible
Traditional Human Duties and the Challenges of Digitization 655

loss in sound quality across several generations of extraction and repositioning, the
sampler is also frequently used to remove a sound fragment from one environment
and insert it into a different one. Understanding the sampler’s popularity and its ability
to upend the music industry’s production process depends on its three capabilities:
mimetic/reproductive, manipulative, and extractive [10].

1.5 Punishment and Supervision

Researchers now have unprecedented options to gain access to users’ most private
thoughts thanks to digital technologies. The ethics and ramifications of using infor-
mation from daily individual encounters have recently gained widespread attention.
One could argue that algorithmically generated decisions are preferred in some situa-
tions, such as governance, above the knowledge of individuals and communities. Our
work is being done at the same time as the other projects mentioned, COVID-19. The
crisis has brought to light the moral dilemmas that arise when vulnerable people who
need information are monitored in a situation that is changing quickly. Data-intensive
technology, such as methods of data collecting and surveillance, is currently governed
by changes in global law. Recent experience shows that legislation continues once
the preliminary risk has subsided and becomes the “new normal.” Universities and
other organizations are setting up systems for gathering and maintaining stakeholder
data that will last long beyond the pandemic. The information collected will be used
to create a hidden curriculum, subliminal messages sent to pupils about the values of
an organization, and the nature of the control dynamics present in its relations. With
a focus on using Chabot transcripts, we outline and discuss the ethical procedures
involved in collecting such data.

2 Conclusion

We examine the prospective of Chabot’s as a tool to enhance information learning

and focus in particular on the effect of crisis scenarios on undergraduate students’
“information anxiety.” Individuals can use Chabot’s to search for information ranging
from practical to private, including information that might be delicate or private.
People may have information anxiety as they seek reassurance to assist them in coping
with new and changing conditions as they adjust to the new normal of education amid
a crisis. These include an increase in digital learning, an increase in employment off
campus, and an increase in social isolation during the COVID-19 epidemic. As
organizations attempt to offer advice and help on a wide range of topics, information
overload can play a crucial role in information anxiety. If it is easier to search for the
information that a particular person prioritizes, this may lead to clarity. Tools that
improve information literacy and facilitate efficient filtering are needed during times
of crisis [11].
656 I. N. Mseer and N. Tawfig

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Assessment of the Challenges
and Benefits of Implementing
International Public Sector Accounting
Standards (IPSAS) in Jordan

Alaa Khrais, Mohammad Abu Nassar, and Hala Zaidan

Abstract This study aims to assess the challenges and benefits that Jordan faces
in implementing International Public Sector Accounting Standards (IPSAS). To
achieve the objectives of the study, a questionnaire distributed on 14 Jordanian
government ministries and their affiliated departments, the Amman Municipality
and the Jordanian Audit Bureau. The final sample consists of 131 respondents.
Based on a single sample (T-Test) in addition to conducting personal interviews
with the persons concerned, the participants believe that the most influential chal-
lenges respectively: organizational challenges, educational challenges, time chal-
lenges, resistance to change, accounting system challenges, financial challenges,
and legal and legislative challenges, with the exception of technological challenges,
where the sample members see that they have no statistically significant effect on
the rate of implementation of IPSAS in Jordan in terms of their availability. More-
over, they expect the benefits of IPSAS to increase the level of accountability and
transparency and improve the quality of financial reports. As well as enhancing the
comparability and accuracy of the decision-making process.

Keywords Accrual basis and modified accrual basis · Cash basis · International
Public Sector Accounting Standards · IPSAS · Jordan

1 Introduction

Governmental accounting occupies great importance of both practitioners and

academics all over the world, in addition to the fact that the government sector is one
of the most important sectors due to the significant role that government units play
in economic and social development. Therefore, the development and complexity of
government activities caused difficulties in many countries in terms of interpreting
financial statements and using them for comparative purposes [1]. This encouraged

A. Khrais · M. A. Nassar · H. Zaidan (B)

Department of Accounting, The School of Business, The University of Jordan, Amman, Jordan
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 657
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_51
658 A. Khrais et al.

the creation of a unified global framework for accounting in the public sector and the
unification of principles to be responsible for providing guidelines for fair dealing
rather than flexible accounting rules and techniques, to ensure the integrity of the
financial statements as well as the information provided to users, which reflects posi-
tively on improving confidence in the quality and reliability of financial reports [2].
International Public Sector Accounting Standards (IPSAS) is the global transfor-
mation in public sector accounting to strive to make financial statements compa-
rable and more coordinated through global best practices. According to Interna-
tional Federation of Accountants (IFAC) in 2017, IPSAS are highly rated worldwide
accrual-based accounting standards promote more transparency, improves account-
ability and provides better information for decision-making purposes in addition to
build trust with citizens as well as creating accurate and qualitative financial infor-
mation. Chan [3] mentioned that the introduction of IPSAS is a centerpiece of the
“global revolution in government accounting” [4] and forming an important part of
public sector reforms. IPSAS ensure improved operational performance, account-
ability and efficient allocation of resources by providing transparent financial data,
accurate and comprehensive accounting information in order to reach a tangible
level of credibility, accountability and oversight [5]. According to [6] IPSAS give
accurate judgments on financial reports and clear choices, which leads to effective
decision-making. It is also one of the latest solutions in increasing transparency and
accountability for public sector drivers of economic growth.
It is worth noting that in November 2014, the Jordanian Cabinet, represented
by the Jordanian Ministry of Finance (MOF), discussed the possibility of adoption
and implementation of (IPSAS), in its session held on Tuesday November 4, 2014 in
accordance with Article 4 of the Law Regulating the Legal Accountancy Profession in
Jordan No. 73 of 2003 [7]. This change will help in the development of perspective
of accounting and give the Jordanian public sector the international character in
addition to open up to global trade. Since the adoption of IPSAS, and despite the
many benefits of its implementation Jordan still uses the cash basis IPSAS according
to MOF website. Therefore, this gives indications that there are obstacles and barriers
that negatively affect implementation and face the Jordanian public sector.
Based on the above discussion, this investigated the actual and desired benefits
and challenges facing the Jordanian public sector in implementing IPSAS [8]. Jordan
adopted IPSAS in 2014, the MOF is responsible for the adoption of public sector
accounting standards in Jordan which are modified cash-basis and, in 2015, officially
endorsed the adoption and implementation of IPSAS, a roadmap for IPSAS imple-
mentation was developed, with implementation assistance provided by the United
States Agency for International Development (USAID) under the Jordan Financial
Reform Project.
Many studies have indicated that there are obstacles that prevent the transition
from cash basis to accrual basis in the government sector in accordance with IPSAS.
Babatunde et al. [9] found that the significant factor for the slow implementation of
IPSAS in Nigeria is the political buy-in of all the government functionaries as a collec-
tive decision. Schmidthuber et al. [10] reported that several criticisms were directed at
Assessment of the Challenges and Benefits of Implementing … 659

applying the standards in terms of lack of pressure, implementation costs, and align-
ment with public sector specializations. In addition, many countries have refused
to adapt their governmental accounting systems to IPSASs. A study by Musleh Al-
Sartawi et al. [11] found that there are inadequate scientific and practical expertise
and qualification, inappropriate legislation and environment in addition to the inad-
equacy of the current information systems for the requirements of implementation
of IPSAS.
In Jordan, limited number of studies have indicated that Jordanian public sector
is implementing the IPSAS in a weakly form and not applying it correctly also there
is a problem in monitoring the applying procedures as (e.g., [12, 13]) Therefore, this
research addressed the actual benefit and challenges in implementation of IPSAS in
Jordan and recommend possible solutions to overcome those challenges.
This paper will proceed as follows: the second section summarizes the literature
and motivated the hypothesis. The third section presents the methodology and data.
Lastly, the fourth section concludes.

2 Theoretical Background and Literature Review

Heald [4] argued that IPSAS is the centerpiece of the “global revolution in govern-
ment accounting”, “In response to calls for greater government financial account-
ability and transparency”. This revolution developed on two stages in the standards
setting the first one from 1996 to 2002, during which 20 international accounting and
financial reporting standards were issued through the adaptation of the International
Accounting Standard (IAS), and the second stage from 2003 and so far, issued many
standards that focused on a unique matter to the public sector like tax issues, budget
implications for financial reporting and other non-exchange transactions [14].
Formulate high-quality accounting standards and other publications for use by
public sector entities around the world derive their importance from the role they
play in achieving international accounting compliance in order to obtain government
financial statements that include reliable and transparent accounting information that
helps in making economic decisions [15]. In addition to IPSAS require, inter alia,
that all expenses and income as well as all assets and liabilities be presented. They
ensure that public sector entities and stakeholders have complete information on:
financial performance, changes in net assets, budget/actual comparison, financial
position, cash flows.
Alshujairi [16] investigated the government accounting system reform and the
adoption of IPSAS in Iraq. The research used questionnaire to the accountants in the
finance ministry, auditors, supreme audit board and lecturers in Iraqi universities,
specialized in government accounting. The results revealed that the main challenge
during adoption includes big costs of implementation, poor IT accounting system,
shortage of qualified and professional accountants, and shortage of trained human
resources being the main challenge. On the other hand, adoption of IPSAS in Iraq had
achieved many of benefits such as meeting requirements of international financial
660 A. Khrais et al.

organizations or sponsors and providing financial position and performance, more

efficient to make use of the knowledge of IPSASB, assuring a better financial integrity,
improving accountability and transparency for resources, being a benchmark for
evaluating and improving government accounting, facilitating the consolidation of
financial statements, enhancing international comparability of financial information
of the Iraqi government with other governments better than the present accounting
system and improving public financial management.
In addition, [17] This study examined the potential benefits associated with
adopting IPSAS in the domain of Brazilian public accounting. The research employed
a questionnaire rooted in five theoretical frameworks. The primary findings of the
study revealed a consensus among participants regarding the feasibility of imple-
menting IPSAS. Additionally, the cost–benefit analysis was deemed crucial in
reaping the advantages of IPSAS application. Another noteworthy outcome pertained
to the educational responsibility for training and implementing IPSAS, with expec-
tations placed on universities to assume this role. The findings also indicated that
Brazil displayed a willingness to accept and adapt to the forthcoming changes in
the public sector. However, despite these positive tendencies, the study identified
resistance towards updating existing concepts and facing new challenges associated
with the next phase of public accounting.
Brusca and Martínez [18] investigated the effect of implementing IPSAS on Latin
American Countries. The study adopted a method of structural analysis of the data of
the reports issued by the legal auditor of the target countries, in addition to personal
interviews with specialists. The examination revealed a growing global inclination
towards the adoption of IPSASs in Latin-American nations; however, concurrently,
significant barriers impeded the attainment of reform objectives. In the context of
Colombia, ongoing reforms were observed, making it difficult to assess the extent
to which IPSASs contributed to enhancing decision-making processes at the orga-
nizational level. There were 6 countries that have adopted the application while 10
countries were still in the transition stage. The results showed that the application of
the accrual basis in preparing reports was one of the most important pillars on which
to apply the IPSAS. The study recommended the importance of applying the stan-
dard and adopting the principle of accrual in preparing reports and focusing on the
application of the disclosure standards proposed in IPSAS, as they have an effective
role in enhancing transparency.
Abdulkarim [19] study aimed to assess the preparedness of the public sector in
Qatar to adopt IPSAS, utilizing the framework of the innovation diffusion theory,
while also examining the challenges associated with its implementation. A question-
naire was devised and administered to gather responses from a total of 101 partic-
ipants, including accountants (preparers) and auditors working in the public sector.
The research focused on five dimensions: relative advantage, satisfaction with the
existing accounting system, top management support, barriers to IPSAS adoption,
and attitudes towards innovation.
The findings indicated that barriers to adopting IPSAS, relative advantage, and
satisfaction with the current system emerged as the most significant factors. These
variables were found to either impede or facilitate the implementation of IPSAS
Assessment of the Challenges and Benefits of Implementing … 661

within the public sector of Qatar and potentially extend to the broader region.
Furthermore, it is crucial to consider higher-level cost–benefit analyses that have
been approved when embracing these standards. As a result, policymakers should
recognize the necessity for a comprehensive shift in the perception and enhancement
of IPSAS, from a top-down perspective, to ensure its successful implementation.
Ahmad and Nassereddine [6] assessed and determined the challenges facing the
implementation of IPSASs in Lebanon, and to achieve that, it was carried out using the
descriptive analytical method. A questionnaire was distributed to 100 public accoun-
tants and financial system managers working in the public governmental sector in
Lebanon. The findings indicated that the level of awareness of IPSAS in Lebanon
is high among accountants, auditors and system administrators. However, the full
implementation of the IPSAS guidelines still faces many challenges, which these
include the high cost of implementation, lack of government support, resistance to
change, and a lack of a better understanding of the importance and operation of the
IPSASs tool.
Al-Kharabsheh [20] examined the effect of adopting IPSAS on financial perfor-
mance in the Jordanian public sector in order to reform its accounting system to
control public money. The study has applied descriptive and inferential approaches,
survey designed for this study and was distributed to a sample consist of accoun-
tants in the MOF amounting (250) employees 250 questionnaires were distributed
to these employees. The results revealed that adopting IPSAS in the public sector in
accordance with the accrual basis to achieve transparency, credibility, reliability and
full disclosure of financial statements, reform the monitoring system and improve
performance through improving the quality of the financial information provided
and adopting the IPSAS helps in changing the accounting policies and applying the
accrual basis and in improving the efficiency of the performance of the MOF and
public sector.
Haija et al. [21] examined and explored the factors that may motivate or limit the
effective adoption of IPSAS in Jordan. The study examined training, local legislation,
infrastructure, external support and stakeholder engagement. The results of this study
showed a positive and significant relationship between training, local legislation,
infrastructure, external support, stakeholder engagement and IPSAS. The two most
important challenges were local legislation and infrastructure. External support and
stakeholder engagement came in the second level. They were needed to share their
resources and experience and to enhance the adoption process. Notwithstanding that
training came at the bottom of list.
As examined in the previous literature, which are related to IPSAS adopting and
implementation in developed and developing countries, researchers paid attention
to investigate the impact of IPSAS on accountability, transparency, financial perfor-
mance and comparability as well as the level of readiness of countries, the require-
ments to implement IPSAS in addition to assess and determine the challenges that
face the implementation of IPSAS. According to the researcher’s best knowledge,
there are still a real challenges facing the IPSAS implementation especially the fact
that the COVID19 crisis helped in slowing the implementation. Moreover, there are
many benefits IPSAS implementation can achieve. In this respect, this study adds to
662 A. Khrais et al.

the related literature by identify the current level of IPSAS implementation in Jordan,
find out the most important challenges and obstacles facing IPSAS implementation,
determine the benefits of IPSAS implementation on governmental agencies within
the general budget (ministries and government departments) and independent non-
profit bodies (Amman Municipality) in addition to the supervisory body (Jordanian
Accounting Bureau), and thus the research included the central government and local
government.

3 Methodology and Data

3.1 Population and Sample

The target population for the study is the Jordanian government ministries and their
affiliated departments, the Amman Municipality and the Audit Bureau as a super-
visory body. The study sample size was 131 respondents from consultants, finan-
cial managers, auditors and accountants working in fourteen Jordanian government
ministries and their affiliated departments, the Amman Municipality and the Audit
Bureau.
For answering the study questions and examining its hypotheses, the required
data were collected from its primary source through design and distribution of a
questionnaire consisting of two parts as follows: the first one contained questions to
obtain general demographic information about the participants in the study, which
is (Gender, educational level, scientific specialization, professional field, current
job title and professional qualification) in addition to three questions to determine
the direction of the study sample, the first is the entity in which he/she works, the
second is the number of specialized courses in IPSAS in which the target audience
participated, and the third is about the degree of their knowledge of those standards.
While the second part contained various questions about the challenges and benefits
of implementing IPSAS in Jordan.

3.2 The Framework of the Study

The overall study challenges and benefits in general can be shown as follow:

Challenges
1. Organizational challenges
2. Resistance to changes
3. Accounting system
4. Technological challenges
(continued)
Assessment of the Challenges and Benefits of Implementing … 663

(continued)
5. Financial challenges
6. Time
7. Law and legislation
8. Educational responsibility
Benefits
1. Alignment with best practices
2. Improved stewardship of assets and liabilities
3. Availability of more comprehensive information on costs
4. Improved consistency and comparability
5. Increased transparency and accountability
Source Prepared by researcher

4 Results and Discussions

A method that is employed to test the objective of the study is One Sample T-Test,
which aims to investigate the effect of challenges and benefits in implementing IPSAS
in Jordan.

4.1 Descriptive Statistics

The questionnaire statements include two sections, the first is the challenges of IPSAS
implementation, and the second is the benefits of IPSAS implementation. Table 1
show the descriptive statistics for questionnaire statements challenges axes. Table 2
show the descriptive statistics for questionnaire statements for benefits axes.
Based on standard deviation values the results show that, resistance to changes
challenges, time challenges and law and legislation challenges axes have high stan-
dard deviation values compared to other challenges axes, which may imply that the
respondents have heterogeneous opinions (answers) about these axes. Finally, and
in pertain in maximum and minimum values the results show that statement data
ranging from 1.00 to 5.00 which mean that the statement answers ranging from
strongly agree to strongly disagree.
Table 2 shows that, there is significant homogenous in respondents answers for
benefits statements. Since the values of mean to a significant extent are closed, and
equal to 4.20 and 4.21. As for standard deviation values it is ranging from 0.61
to 0.70. The results also show that the minimum values are equal to 2.00, while
the maximum values are equal to 5.00 which imply that the answers ranging from
disagree to strongly agree. That is the choice strongly disagrees is not recorded.
664 A. Khrais et al.

Table 1 Descriptive statistics for challenges axes

Descriptive statistics for challenges axes N Mean STD DEV Max Min
Organizational challenges 131 2.57 0.67 5.00 1.00
Resistance to change challenges 131 2.53 1.00 5.00 1.00
Accounting system challenges 131 2.72 0.85 5.00 1.00
Technological challenges 131 2.90 0.80 5.00 1.00
Financial challenges 131 2.76 0.75 5.00 1.00
Time challenges 131 2.47 1.10 5.00 1.00
Law and legislation challenges 131 2.67 1.08 5.00 1.00
Educational challenges 131 2.57 0.67 5.00 1.00
Overall Challenges’ Axes Statements 131 2.66 0.63 5.00 1.00
N is number of observations
STD DEV is standard deviation value

Table 2 Descriptive statistics for benefits axes

Benefits axes N Mean STD DEV Max Min
Alignment with best practices benefits 131 4.21 0.64 5.0 2.0
Improve stewardship of assets and liabilities benefits 131 4.20 0.62 5.0 2.0
Availability of more comprehensive information on costs 131 4.20 0.70 5.0 2.0
benefits
Improved consistency and comparability benefits 131 4.21 0.64 5.0 2.0
Increased transparency and accountability benefits 131 4.21 0.61 5.0 2.0
Overall Benefits’ Axes Statements 131 4.21 0.58 5.0 2.0
N is number of observations
STD DEV is standard deviation value

To test of study hypotheses, we use One Sample T-Test. One Sample T-Test is
used to investigate the significance of the difference between an assumed population
mean and sample mean. The study assumes the mean (Test Value) = 3. This value
calculated based on the athematic average for multiple-question Likert scale.
Table 3, shows the results of One Sample T-Test for Challenges statement axes,
and for overall challenges’ statements. If Sig. value is less than 0.05 the result is
statically significant. The outputs show that, all challenges axes except technological
challenges are statistically significant and represent challenges for IPSAS imple-
mentation. The results to some extent are consistent with, [16, 22] and [21]. The
respondents strongly agreed that organizational challenges represent the most diffi-
cult challenges faced by the Jordanian public sector, and this is agreeing with [23]
study in addition to the Law and regulation challenges. As for technological chal-
lenges the result is insignificant, which mean that the technological challenges do not
Assessment of the Challenges and Benefits of Implementing … 665

represent a challenge for IPSAS implementation. This result may imply that, respon-
dents believe that the existing technology is already sufficient and sophisticated and
capable of implementing IPSAS in terms of their availability.
Table 4, shows the results of One Sample T-Test for Benefits statement axes, and
for overall Benefits’ statements. If Sig. value is less than 0.05 the result is statically
significant. The results document a statistically significant effect for the benefits of
implementing IPSAS for public entities. The results are consistent with, [24] who
documented that, the adoption of IPSAS will increase the level of accountability and
transparency in public sector. Also, comparability and international best practices
will enhance. Furthermore, the study found that adoption of IPSAS based standards
will provide more meaningful information for decision makers and improve the
quality of the financial reporting system.

Table 3 One sample T-Test for challenges statements axes

Variables T-Test value Df Sig.
Organizational challenges −7.297 130 0.000
Resistance to change challenges −5.317 130 0.000
Accounting system challenges −3.858 130 0.000
Technological challenges −1.385 130 0.168
Financial challenges −3.609 130 0.000
Time challenges −5.537 130 0.000
Law and legislation challenges −3.464 130 0.001
Educational challenges −5.861 130 0.000
Overall Challenges’ Statements −6.221 130 0.000
T is the value of One Sample T-Test
Df is the degrees of freedom
Sig is two tailed significant

Table 4 One sample T-Test for benefits statements axes

Variables T-test Value Df Sig.
Alignment with best practices benefits 21.857 130 0.000
Improve stewardship of assets and liabilities benefits 22.234 130 0.000
Availability of more comprehensive information on costs benefits 19.652 130 0.000
Improved consistency and comparability benefits 21.796 130 0.000
Increased transparency and accountability benefits 22.786 130 0.000
Overall Benefits’ Statement 23.912 130 0.000
T is the value of One Sample T-Test
Df is the degrees of freedom
Sig is two tailed significant
666 A. Khrais et al.

4.2 Personal Interviews

The researcher conducted several personal interviews with those in charge of the
project to implement IPSAS in the MOF, the Amman Municipality and the Audit
Bureau as a supervisory body, and these interviews had a significant impact on
enriching the study.
In MOF, Mr. Wael Mohsen (Head of the IPSAS Unit in the Directorate of Govern-
ment Financial Management Information System (GFMIS)) affiliated to the MOF,
said that the implementation of IPSAS help to effectively control public money and
increase transparency and credibility represented in the financial position and thus
raise Jordan’s level economically and politically. However, there are major obstacles
facing the implementation of standards, the most important of which is the difficulty
of inventorying and evaluating the assets as it is large and needs experts for evalua-
tion. In addition to that MOF is responsible for the rest of the ministries, and in the
event that any standard is applied, it will initially be applied to the MOF and then
the rest of the ministries and in stages.
In the Audit Bureau, which is an external control body responsible for financial
oversight (accounting and legal) and performance control in accordance with the
Audit Bureau Law No. (28) for the year 1952 and its amendments, the basic reference
for external control. Mr. Munther Al-Naber and Dr. Bilal Akasha (Internal Control
Manager, Director of Directorate of Oversight of Companies and Final Accounts)
respectively, they stressed the importance of adopting and implementing IPSAS
because of their many benefits in increasing transparency and increase the quality
of disclosure. The MOF has gone through many stages since the adoption of stan-
dards and developed a plan for 5 years and formed a special unit (GFMIS) for these
standards in the MOF, and the Audit Bureau was visited this unit to follow up their
work, which is still in the process of implementing, reevaluation, inventory of state
assets, requires great effort, high staff efficiency and advanced accounting systems.
Regarding the Municipality of Amman, Dr. Ahmad Al-Amoush, the financial
director of the Municipality, said that international accounting standards occupy a
high global position among countries and have become an international requirement
by many organizations. It was necessary for Jordan, as the Municipality of Amman,
which is an independent non-profit governmental body, to start adopting and imple-
menting IPSAS, in 2019, experts from a French company were hired to develop an
appropriate action plan for the transformation in order to reach the accrual basis,
several steps must be taken. The Transfer to the accrual basis is expected at the end
of 2022. At the present time, the financial statements of the Municipality of Amman
are audited by Talal Abu-Ghazaleh & Co. International. as an external audit, and
it acknowledged in the financial report for the year 2020 that the Municipality of
Amman prepares financial reports according to the cash basis of IPSAS.
Assessment of the Challenges and Benefits of Implementing … 667

5 Conclusions

This paper has examined the challenges and benefits of implementing IPSAS in
Jordan. The results indicated that, at the aggregate level of the sample, the adoption
of IPSAS led to an elevation in accountability and transparency. Furthermore, it
fostered enhanced comparability and increased the efficiency of the Ministry of
Finance (MOF) and the public sector’s performance, thereby fortifying the principles
of good governance and improving relationships between the government and the
general population. Thus, raising the level of classification of Jordan as one of the
first Arab countries to adopt these standards. Conversely, participants in the survey
expressed their belief that the implementation of IPSAS is accompanied by numerous
challenges that warrant careful attention. The foremost among these challenges, as
identified by the respondents, include limited awareness and knowledge regarding
the standards, the difficulty of keeping up with frequent updates and revisions to
the standards, prolonged duration of time required for implementation, inadequacies
in accounting curricula offered by universities, inefficient accounting systems, and
organizational resistance to change. While technological challenges do not have a
significant impact and this indicates the presence of advanced technology in Jordan,
however, the inability to own it or not knowing how to transform this technology to
be in line with the technological systems applied at the present time to government
systems. We strongly recommend future researchers to examine the best ways to
increase the implementation in Jordan. Lastly, we recommend that universities in
Jordan to include the IPSAS in the material related to governmental accounting.

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The Emergence of Islamic Fintech
and Bahrain: Prospect for Global
Financial Sectors

Zakir Shaikh , Mohammad Irfan , Adel Sarea ,

and Rashmi Ranjan Panigrahi

Abstract It is an exciting to study the future prospects of financial technology in

Islamic Finance. Technology and automation have moved to many sectors including
the finance sector. In Islamic finance sector it is still developing, and the future
of Islamic finance industry looks promising with this innovation. “Artificial intelli-
gence, machine learning, robotic process automation, the Internet of Things, cloud
computing, big data, and blockchain” are a few of the technologies employed in
the banking industry. in addition to financial results FinTech apps are being used
in Islamic finance to offer financial goods and services such as lending, investing,
invoicing, risk evaluation, data analytics, and fund management to increase the
sustainability and productivity of the sector and society. The Kingdom of Bahrain,
is the hoariest and most recognized financial center in GCC, has used its exten-
sive banking expertise to grow a modern fintech ecosystem and promote fintech
success, both in the GCC and around the globe. This chapter attempt to highlight new
challenges and prospects for Islamic fintech such as offering innovative goods and
services, greater regulatory compliance, improved client accessibility, and consider-
able cost reductions are some of the important areas that Islamic fintech must focus on

Z. Shaikh (B)
Department of Finance and Accounting, College of Business Administration, Kingdom
University, Isa Town, Kingdom of Bahrain
e-mail: [email protected]
M. Irfan
NSB Academy Business School, Bangalore, India
e-mail: [email protected]
A. Sarea
Department of Accounting and Economics, College of Business and Finance, Ahlia University,
Manama, Kingdom of Bahrain
e-mail: [email protected]; [email protected]
R. R. Panigrahi
GITAM School of Business, GITAM Deemed to Be University, Visakhapatnam, Andhra Pradesh,
India
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 669
A. M. A. Musleh Al-Sartawi et al. (eds.), Artificial Intelligence-Augmented Digital
Twins, Studies in Systems, Decision and Control 503,
https://doi.org/10.1007/978-3-031-43490-7_52
670 Z. Shaikh et al.

in order to remain sustainable. These obstacles include integrating Fintech and over-
coming them. In the digital age clients demand services in digital mode particularly
in the banking sector and fintech has been filling up the gaps. Islamic fintech cannot
elude the fintech revolt in the digital age. According to the study’s findings, fintech
could have an impact on the future of Islamic banking and finance by delivering new
and creative financial services that are more effective and less expensive.

Keywords Financial technology · Islamic finance · Islamic Fintech-Bahrain

1 Introduction

According to the World Population Review, 1.9 billion Muslims worldwide partic-
ipate in Islamic finance. Islamic finance is one of the financial sectors with the
strongest growth [20], despite making up a relatively small fraction of global finance.
The company’s total assets have topped $2 trillion, and $3.8 trillion is its goal for
2023. Islamic finance dates back to the seventh century, but it was only formalized
in the 1960s. Islamic finance is the activity of businesses and people raising money
in accordance with Sharia, or Islamic law. Which is a unique method of socially
responsible investments [15].
Bahrain is a leader in Islamic finance globally, ranking second globally in terms
of development and first in the Middle East and North Africa [19]. Before the global
financial crisis of 2008, technological advancements were transforming the nature
of financial markets, services, and institutions in unforeseen ways (GFC). FinTech,
or financial technology, provides alternative solutions to traditional banking and
payment methods by combining technology, consumer-centric services, and flexible
business practices. Fintech Bahrain is the world’s oldest and most well-established
financial center in GCC has created a sophisticated FinTech environment using
its substantial banking knowledge [21]. Because it is merely a facilitator, Shariah-
compliant Fintech is Shariah-neutral. Certain fintech advances for Islamic financial
services, on the other hand, must follow Sharia norms [12].
Financial inclusion indices have improved in recent years as a result of concerted
attempts to develop the kingdom into a regional fintech center [24]. Financial inclu-
sion is measured by the number of bank branches, ATMs, POS terminals, bank
accounts, online banking users, and debit and credit cards, among other things. These
indicators have all shown steady growth in recent years.
FinTech is profoundly altering and transforming how customers and businesses
approach financial services all around the world [4]. Young fintech companies have
a unique potential to be a part of this change, improving customer financial expe-
riences and ushering in the new millennium for financial institutions. However, in
order to do so, they must be free to function in the manner that best meets their
needs. Bahrain offers a unique environment for fintech success in the “Gulf Cooper-
ation Council (GCC) and around the world” [1]. Most importantly, because Islamic
finance is a new and mostly untouched business, the potential market for fintech in
The Emergence of Islamic Fintech and Bahrain: Prospect for Global … 671

the sector is enormous. Customers are demanding creative, convenient, efficient, and
cost-effective financial services as a result of the digital revolution. Between 2 and 3
billion new users are expected to enter the digital finance market by 2020, according
to estimates 80% of these new consumers will be Muslims. Fintech has a huge possi-
bility in Islamic finance because of this. Strong awareness among Islamic finance
stakeholders, encouragement from monetary authority senior officials, and favorable
regulatory conditions in important Islamic financial markets will all contribute to the
growth of fintech in Islamic finance [1, 2].
The date has been collected from various secondary sources like journal, news-
paper, internet and reports of Central bank of Bahrain. This chapter’s goal is to outline
the most recent advancements and future prospects for Bahrain’s financial inclusion
as well as the FinTech industry. This study emphasizes the initiatives taken in this
area by CBB and other business players in the Kingdom. This chapter is divided
as follows: section one begins with an introduction, while section two focuses on a
literature review on Shariah compliant fintech. Section three provides an overview
of Fintech Bahrain’s development and potential, Section four covers recent Fintech
trends and advancements, and the study’s conclusion and the topic of future research
are covered in the final part.

2 Literature Review

FinTech is referred to as a “combination of financial technologies” that characterizes

financial services in the twenty-first century [23]. FinTech is a term that combines
the words “finance” with “information technology”. FinTech allows for the develop-
ment of new services and business models while also posing a threat to established
financial service providers. Innovation can improve the financial services industry’s
“operational effectiveness, customer-centric offerings, and transparency” [25].
Fintech technology integration into Islamic finance, which is governed by Shariah
law, has potential benefits. Recent studies have focused on the computability issues
with Fintech-based Islamic financial solutions. Aslam et al. [6], Banker [7] and Bian-
cone 8] has examined the computational difficulties associated with Fintech-based
Islamic financial solutions. Fintech has several applications in the Islamic banking
industry, despite the fact that there are arguments both for and against its Shariah
compliance. The application of smart contracts to guarantee Shariah-compliant goods
and services in the Islamic banking sector emphasized by [13]. Abojeib and Habib [3]
addressed the potential uses of blockchain for good, particularly in the zakat collec-
tion process. Fintech might be applied similarly to increase the usefulness of waqf.
As a result, the Islamic Fintech sector has experienced rapid growth since 2010. A
7.7% compound annual growth rate (CAGR) is predicted for the sector, which was
valued at “USD 2.4 trillion in 2017 and is forecast to reach USD 3.8 trillion in 2023
[8]. Banker [7] underlined how Islamic banks in Malaysia and the UAE can retain
their customers, through crowdfunding technology”. Biancone et al. [8] investigated
the Shariah compliance business models of crowdfunding and Fintech companies,
672 Z. Shaikh et al.

we draw the conclusion that Shariah-compliant business models are realistic, crowd-
funding shares risk, invests in halal goods, and doesn’t charge interest. Biancone
et al. [8] went on to say that the ban of interest is crucial to the Shariah compliance
of Fintech-based business models.
According to [18] fintech can develop a non-bank intermediary platform and
become a competitive alternative to IFIs. In order to operate on such principles,
crowdfunding platforms are currently collaborating with IFIs. Shaikh et al. [22] may
help the Islamic finance industry become more useful against traditional finance
without negotiating on benefits, enabling the sector to attract more consumers,
enhance productivity, lower costs, and offer a wider range of goods. Najjar et al.
[20] suggest that blockchain can enhance suppliers’ visibility.
The fourth industrial revolution, or IR4.0, will occur as a result of the digitalization
of more than half of the world’s GDP by 2022, which will have an impact on every
industry [14]. Through the creation of new prospects for the creation of value and
income, digitalization is changing the way we conduct business. This digitalization
process is being accelerated by new technologies like “blockchain, artificial intel-
ligence (AI), augmented reality (AR), biometrics, the internet of things (IoT), and
cloud computing” creating some disruptions that may eventually revolutionize the
financial sector [4]. Islamic fintech enables the acceptance and implementation of a
risk-sharing model in Islamic financial institutions through tiny creative start-ups that
want to support the Islamic finance sector. The ideal Islamic economy’s real sector is
underleveraged, risk-shared, and asset-backed. should be pretty similar to the Islamic
fintech model [4–6]. The IFI might reap significant benefits and achieve a number
of its goals by using digitization. The IFI, for example, The IFI can use a variety
of existing digital transformation channels, including “crowdfunding, peer-to-peer
model and payment platforms, smart contracts and blockchain, cryptocurrencies,
cybersecurity” to reach its objectives of inclusive growth, provide financial services
that are focused on the needs of the customer, achieve operational excellence, and
gain a competitive edge over their rivals [15, 16].

3 FinTech Developments and Vision 2030 of Bahrain

2014 Non-bank enterprises’ entry into banking services. Bahrain’s Central Bank provides
payment and card processing services (CBB)
2015 By tying together regional banks and significant billers, CBB and “Benefit Company”
created the Electronic Financial Transfer System (EFTS) for payment via the Fawri +
service, which enables close to real-time financial transfers up to 1,000 BD
2016 To increase the effectiveness of financial transfers, the Bahraini Central Bank has
developed a “ground breaking Electronic Fund Transfer System (EFTS) that links all
retail banks in the Kingdom with one another and with major billers”
(continued)
The Emergence of Islamic Fintech and Bahrain: Prospect for Global … 673

(continued)
2017 The Central Bank of Bahrain (CBB) has announced “National electronic wallet to
transfer funds using the wallet for Fawri, Fawri Plus, and online bill payment,” in
addition to opening the first phase of the regulatory sandbox for fintech start-ups as
well as opening its regulatory sandbox framework to provide companies with a virtual
space. Bahrain’s Information and eGovernment Authority established a Cloud First
Policy to decrease government ICT costs and improve security. Sharia-compliant
financing-based crowdfunding sites now have to meet an additional criterion,
according to the CBB
2018 A secure private network was established to link all retail banks and act as the main
communication hub for “real-time Inter-Bank payments settlement (RTGS)”. The
CBB approved three “Regulatory Sandbox applicants (Wahed, Inc., BitArabia, and
Belfrics)”, allowing them to experiment their solutions in the Kingdom alongside three
prior applicants—“Tramonex Limited UK, Norwex WLL, and Rain Financial”
2019 Alliance between “CBB and Information and eGovernment Authority and BENEFIT”
developed the first Electronic Know Your Customer (eKYC) project in the Arab
region. The first Crypto-Asset Module license was given to Rain, a Bahraini
cryptocurrency exchange, and the Kingdom also got its first property technology
company, Estater, which offers a user-friendly platform for listing, sharing, locating, or
managing a property
2020 FinHub 973, of CBB the first comprehensive digital fintech lab in Bahrain and the first
cross-border project to create a collective network for investigating, testing, and
prototyping on a centralized digital sandbox
2021 Bahrain Supernova Fintech Challenges on FinHub 973, promotes open innovation in
the financial sector, towards the growyh of fintech
Vision Bahrain’s Economic Vision 2030 includes digital transformation as one of its pillars,
2030 towards “sustainability, competitiveness, and fairness”. The emphasis of the Digital
Government Strategy 2022 is on the use of emerging technology to transform services.
To attain Vision 2030 goals for smart cities, Internet of Things (IoT), and
Machine-to-Machine (M2M) connectivity, the Information and eGovernment
Authority (iGA) has assigned frequency bands to government organizations

3.1 Islamic Finance and Fintech

According to many, the Kingdom of Bahrain is the region that leads the world in
Islamic finance, placing first worldwide in the growth of Islamic banking and second
in the Middle East and North Africa [12]. Through a constant focus on innovation and
client satisfaction, Bahrain Islamic Bank, which was created in 1978, was the first to
set the benchmark for Islamic banking management. Bahrain has become a leading
destination for Islamic finance growth, developing Shariah banking compliance prin-
ciples, norms, and standards in the industry, making “Bahrain a top destination for
Islamic finance development” such as:
674 Z. Shaikh et al.

• Expertise ranges in this intricately entwined context from wealth management

and Sukuk issuance to takaful and re-takaful (Islamic insurance and reinsurance).
• Implementation of the new Takaful model, which allows for a more accurate
assessment of these businesses’ solvency. A new “Takaful model and a Shariah-
compliant Wakalah investment instrument” were recently introduced.
• To boost Bahrain’s position in Islamic finance, the Central Bank of Bahrain is
introducing new initiatives and policy tools.
Zakat, Qardh-Al-Hasan, Awaqaf, sadaqa, and Islamic microfinance are only a few
of the ethical and social financial services offered by the Islamic financial system.
These services are geared toward the underprivileged and disadvantaged members
of society. Islamic financial services based on fintech that can be used to offer clients
effective, dependable, affordable, and creative financial services (Fig. 1).

Fig. 1 Islamic global fintech and type of financial services: Source World Bank 2020
The Emergence of Islamic Fintech and Bahrain: Prospect for Global … 675

3.2 Prospects of Fintech in Islamic Finance

Islamic FinTech solutions through Shariah compliant procedures providing more

prospects in the market and choices to customer which are more aligned to indi-
vidual needs [10]. Islamic financial organizations can use blockchain technology
to improve transaction transparency. Smart contracts can be used to conveniently
execute substantial contractual duties in Islamic contracts, which are governed by
Shariah regulations (Fig. 2).
The Islamic finance sector benefits from fintech’s contribution to the innovation
and evolution of financial goods and services. Due to the removal of credit interme-
diaries, prices have decreased and/or potential profits have increased. Additionally,
peer-to-peer lending and crowdfunding provide a platform for equity financing based

Fig. 2 Prospects to leverage fintech for Islamic finance. Source World Bank 2020
676 Z. Shaikh et al.

on Musharakah and Mudarabah, which hasn’t historically been very successful.

Global Islamic and Sustainable FinTech Center (GISFC), the leading platform in
the Middle East and Africa focused on Islamic and sustainable FinTech established
by Bahrain Fintech Bay in collaboration with local, regional, and global financiers,
pioneers, industry participants, and standard-setting bodies.
This industry is driven by sustainability in areas like:
• Increasing knowledge of Islamic FinTech by launching pioneering ideas.
• Adopting Fintech for the growth phase of Islamic Finance.
• Operating in a neutral platform and FinTech space towards the advancement and
collaboration of Islamic and viable FinTech locally, regionally and globally.
• Initiating an improvement that promotes sustainability and SDG in the Islamic
financial industry.
“The Accounting and Auditing Organization for Islamic Financial Institutions
(AAOIFI), the Islamic Corporation for the Development of the Private Sector
(ICD), the South–East Asia’s Islamic Fintech Alliance, Ethis Ventures, an Islamic
crowdfunding platform operating in Malaysia, Indonesia, and Singapore, Al Baraka
Banking Group, the largest Islamic banking network in the world, Al Salam Bank,
Arab Financial Services, Arcapita, and the Bahrain Institute of Business” are among
the launch associates of the GISFC.
The fundamental principle of Islamic principles is through various non-profit
applications of Islamic finance, such as Zakat and Sadaqah with Waqf (obligatory
and voluntary charity with Islamic endowments), to support the least fortunate partic-
ipants of humanity. This social component to fintech in Shariah finance is vital to
highlight the need to come up with Shariah compliant resolutions which can be
supported through Shariah financing to encourage sustainable development [11].
Both “voluntary and involuntary unbanked” are catered to by Islamic fintech. The
unbanked and the underprivileged can obtain financial services thanks to Islamic
finance’s profit and loss distribution methods. Islamic social finance [7] and Shariah
contracts accelerate financial inclusion and accomplishment of numerous SDGs.
The entire mechanism of acquisition, allocation, and mediation of funds to the better
recognition of recipients with the revolution of Fintech. Financial technology can
also step up to bring more donors to the network, such as Sobatku is a smartphone
app that was developed by Indonesia’s “National Zakat Board (BAZNAS) to facil-
itate collections and payments. An integrated portal (BukaZakat) for endowment,
philanthropy, and Zakat payment was also created by online marketplace Bukala-
pak”. There is collaboration between Zakat collection organizations with fintech
companies to provide networks for circulation. Islamic social finance and the inno-
vation of fintech in this sector possibly promotes financial inclusion, hence the wise
use of technology is a game-changer in Islamic banking business [17].
Even though Islamic fintech is growing, it still trails the standard fintech industry,
which now controls the majority of the global fintech market. Islamic fintech has a
lot of potential and room to grow, yet there is indeed a long way to go [19] (Fig. 3).
The Emergence of Islamic Fintech and Bahrain: Prospect for Global … 677

Fig. 3 The Islamic Fintech framework. Source Global Islamic Fintech Report 2021

3.3 The Developments of Islamic Fintech Industry in 21st

Century

• Using “Artificial Intelligence (AI) and Machine Learning” for autonomous finance
in the business decision-making process.
• Using Application Programming Interfaces (APIs), Open Banking gives third-
party financial service providers access to client account credentials. and makes
high-income investments more flexible.
• Physical contact restrictions until the pandemic hits through digital-only banking
services; modern fintech solutions for financial literacy aimed at educating
customers on how to make sound financial decisions.
• For accessibility and ease of performing financial chores, AI-powered fintech is
moving toward voice-based technologies in online interactions.
678 Z. Shaikh et al.

4 Results and Discussion

4.1 A Global Islamic Fintech Pioneer

The earliest, FinTech 1.0, lasted from 1866 to 1967, and was characterized by a
predominantly analogue financial services business despite being tightly intertwined
with technology. From 1968 to 2008, FinTech 2.0 saw the advancement of digital
technology for communications and transactions, resulting in the expanding digitiza-
tion of finance. Since 2009, during the time known as FinTech 3.0, numerous compa-
nies and businesses have emerged. Stores at USD 108 billion (4%), and Takaful at
USD 46 billion (2%).
Shariah finance includes all the financial sectors like “banking, capital markets,
Takaful, and other Islamic financial institutions”. According to “ICD-Refinitiv in
2018, 1,447 Islamic financial institutions were operating businesses in 72 countries
and expected to increase from USD 2.5 trillion in 2018 into forecasted number of
USD 3.5 trillion in 2024”. Among all banking is the primary service with ‘USD 1.72
trillion (70% share) in 2017, followed by Sukuk at USD 470 billion (18%), other
financial services at USD 140 billion (6%), Islamic funds at USD 108 billion (4%),
and Takaful at USD 46 billion (2%)’ (Fig. 4).
With total assets held by Islamic banks reaching USD35.7 billion at the end
of 2020, or almost 106% of Bahrain’s GDP, the sector is still quite important.
From 35.4% in 2015, Islamic banks’ domestic market share has been continuously
increasing. Bahrain Islamic Bank’s National Bank of Bahrain boosted its holding
stake from 29% to 78.8% in 2020. Islamic banks had similar levels of capitalization
to those of regular banks. Bahrain continues to be a major international center for
Islamic banking since it is home to organizations that set standards around the world,
like AAOIFI and the International Islamic Financial Market (Fig. 5).

Fig. 4 Global Islamic finance industry landscape. Source ICD-Refinitiv IFDI Report 2020
The Emergence of Islamic Fintech and Bahrain: Prospect for Global … 679

Fig. 5 Countries with highest share of Islamic Banking assets to GDP 2019. Source ICD-Refinitiv
IFDI Report 2020

4.2 Electronic Fund Transfer System (EFTS)

The Kingdom of Bahrain implemented global electronic fund transfers and developed
the trend of going cashless electronic fund transfers through 3 customer services—
“Fawri + Fawri, and Fawateer”. Both individuals and businesses can send money
using Fawri+ and Fawri, and general public can pay their bills in real time using Fawa-
teer with simpler access, quicker transactions, and less expensive costs. A general
upward movement in the regular transmissions for “Fawri+, Fawri, and Fawateer” is
depicted in Fig. 6. Fawri+ transfers increased in value from 1,971.5 million BD in
2021 to 2,491.1 million BD in between H1 and H2 of 2021, a rise of 26.36%.

Fig. 6 EFTS Value (BD million) “Fawri, Fawri+ , and Fawateer”. Source “Central bank of Bahrain
(CBB) financial Stability report March 2022”
680 Z. Shaikh et al.

Fig. 7 “Point of Sale (POS) transactions in Bahrain”. Source Financial Stability report March
2022,CBB

4.3 Point of Sale (POS)

POS devices allow a variety of payment methods, the most common of which are
debit and credit cards. Financial inclusion requires the use of point-of-sale terminals.
Increased use of POS machines and their associated services, as well as mobile POS
and new age payment technologies, contribute to greater financial inclusion. There
were 24,702 POS terminals in Q4 2020 (Fig. 7).
The number and value of Kingdom’s transactions have been rising over time at
the point of sale. g POS machines in Bahrain were 38.0 million, up 12.0% from
Q2 2021 and up 51.5% YoY from Q4 2020. The total value of transactions made in
Bahrain utilizing POS devices in the fourth quarter of 2021 was BD 947.0 million,
up 13.2% from the second quarter and 41.9% YoY from the fourth quarter of 2020.
The increase in POS transaction volume and value, compared to 2020, shows the rise
in consumer expenditure.

4.4 Digital Wallets

The desire for digital wallets in the Kingdom of Bahrain is growing, and considerable
strides have been made in realizing the goal of the Kingdom to lead in technology.
The total volume in the fourth quarter of 2021 was 50.0 million transactions, up
from 21.7 million in the fourth quarter of 2020 and up 130.2% year over year from
the 41.6 million transactions in the third quarter. In Q4 2021, there were 1.5 million
transactions worth BD 1,320.5 million, a 13.5% rise from Q3 and a 74.1% rise from
Q4 2020. (860.9 million BD) (Fig. 8).
Bahrain is rebranding itself as the region’s “Financial Technology (FinTech)
hotspot,” combining traditional and Shariah-compliant FinTech products. FinTech,
which “offers low-cost, convenient, and quick payments,” has piqued the interest
of regulators who have been tasked with regulating, controlling, and assuring the
The Emergence of Islamic Fintech and Bahrain: Prospect for Global … 681

Fig. 8 “e-Wallet and mobile payments: volume and value of transactions”. Source “Central bank
of Bahrain (CBB) financial Stability report March 2022”

security and productivity of these recent payment techniques. The digital revolution,
of Kingdom with the goal of increasing financial inclusion building value to the
financial services sector [9].

5 Conclusion and Future Work

Any industry, financial or otherwise, cannot ignore fintech as it represents an

inevitable progression of the financial sector. As the world becomes more digital-
ized, every financial institution and business will essentially be a fintech institution
or business. Because innovation lives on ever-evolving technology, the prospects in
Islamic fintech are limitless. Fintech solutions are rising to the challenge of wealthy
consumers and Shariah believers who want to do more with their money. Fintech
trends are quickly becoming the industry standard, with a track record of “providing
important financial information payment security, speedy and transparent transac-
tions”, among others. The IFI may benefit greatly from Islamic fintech’s promotion of
the essential ideals of Islamic economics and finance, including risk-sharing, justice,
equity, and ethical norms. The IFI cannot ignore this trend either because it is a
part of the global financial sector. In fact, the IFIs should totally strengthen it and
encourage all market players towards transformation. Regardless of the fact that a
number of Islamic fintech innovation have been satisfactorily created and adopted,
the Islamic fintech industry is lagging behind the global digital economy. Digital
wallets, biometrics, and smart contracts are among the most developed developments,
while distributed ledger and machine learning are developing financial technology
advances in Bahrain’s Islamic institutions. Regulating agencies, Islamic banks, and
policymakers should adopt the financial innovations in their companies in light of
the findings.
This chapter concludes that the emergence of Fintech based financial technologies
offers prospects to the Islamic finance industry to adopt and thrive. It offers the
682 Z. Shaikh et al.

prospect to enter the new market, do experiments in terms of the product innovations
and increase its market share. The study is anticipated to assist financial institutions,
investors, and regulators in developing the best plan of action for embracing this
upheaval and reaping its full benefits. The chapter is intended to help academic
practitioners and academics better comprehend the idea of new financial services
based on fintech, which will be essential in altering the Islamic finance sector.
Fintech adoption in Islamic finance is still in its early stages. There is an immediate
need for financial and regulatory support. Delivering Shariah-compliant goods for the
global market holds a lot of promise for Islamic Fintech, which might help the sector
compete and broaden its product offering. However, correct Shariah standards must
be developed by relevant regulatory agencies in order for Islamic fintech to expand.
Furthermore, Islamic fintech companies can increase their operational transparency
and efficiency by complying with reporting and governance regulations. The Central
Bank of Bahrain has taken steps to set required standards for effectively regulating
Islamic fintech businesses, as have other countries like Malaysia and Indonesia. This
prospect goes beyond the historical hubs of Islamic finance. in fact, Islamic finance is
rapidly expanding to a global scale. Sharia compliant based investments are emerging
in Europe, more notably in the UK. These investments are no longer restricted to the
Middle East and are sought after due to their ethical foundation.

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