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Research Article

Influence of spin-off decision on financing risk: Empirical insight from Indonesian Islamic banks

[version 1; peer review: 2 approved with reservations]
PUBLISHED 18 Oct 2024
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Abstract

Background

Spin-offs play a significant role in organizational development strategies, particularly in Islamic banking, by fostering entrepreneurship, innovation, and Shariah-compliant management practices. Indonesia stands as a pioneer in implementing the dual banking system and has established a spin-off policy to foster the growth of Islamic banking. This study investigates whether the spin-off decision has a significant impact on financing risk in Indonesian Islamic banks.

Methods

Financing risk is measured by the non-performing financing ratio, while the spin-off decision is represented by a dummy variable equal to 1 for the post-spin-off period and 0 for the pre-spin-off period. This study utilizes data from semi-annual reports of 35 Indonesian Islamic banks and analyzes it using a dynamic panel model with the Generalized Method of Moments (GMM).

Results

The findings reveal that spin-offs significantly reduce financing risk, thereby enhancing the financial resilience and boosting investor appeal. Notably, this implies that Islamic banks operating as Islamic windows exhibit a higher level of financing risk compared to fully-fledged Islamic banks. Furthermore, a noteworthy pattern emerges that spin-off Islamic banks with substantial assets demonstrate greater risk in comparison to their counterparts with more modest assets. System GMM also confirmed the result.

Conclusions

Islamic banks can significantly reduce their financing risks by establishing independent Islamic banks, or spin-offs. Unlike Islamic windows, which are typically integrated within conventional banks and face higher risk levels, standalone Islamic banks offer greater flexibility and control over their operations.

Keywords

Islamic Banks, Non-Performing Financing, Financial Resilience, Government Policy

Introduction

Islamic banking has emerged as a vital component of the global financial landscape, offering a unique alternative based on principles grounded in ethical and Shariah-compliant practices (Al Ansari & Alanzarouti, 2020; Jaafar & Brightman, 2022). Islamic banks dominate 70% of the total assets in the global Islamic finance sector, signifying a growth of 17% compared to the previous period. The primary driving force behind this accomplishment is the significant contribution of countries with Muslim-majority populations, particularly in the GCC, MENA, and Southeast Asia regions. This progress is primarily supported by effective governance and well-suited policies (ICD IsDB, 2022). In Indonesia, a prominent Muslim-majority nation, the Islamic banking sphere has showcased notable expansion and adaptability, establishing its role as a crucial element within the nation’s financial framework (Trinugroho et al., 2018). Within this period of growth, the spin-off policy has been contemplated as a strategy to navigate the complexities of contemporary banking while adhering Shariah principles (Pambuko & Sriyana, 2023; Trinugroho et al., 2021).

The phenomenon of spin-off becomes the one of the key dynamics influencing the financial performance of Indonesian Islamic banks (Pambuko & Sriyana, 2023; Trinugroho et al., 2021). As a strategy, this refers to the process of establishing separate entities from the parent institution, often with distinct business focuses (Chai et al., 2018). According to Article 68 of Law 21 of 2008, all Islamic windows are required to undergo a spin-off after 15 years or if their assets have exceeded 50% of their conventional parent bank’s assets (Nurkarim et al., 2021; Pambuko, 2019; Rokhmawati et al., 2022). These spin-offs were achieved through various methods, including pure spin-offs, conversions, mergers, and acquisitions (Al Arif, Masruroh, et al., 2020a). The rationale behind such spin-offs often involves streamlining operations, improving risk management, optimizing organizational structures, enhancing efficiency, fostering growth, and complying with sharia law (Al Arif, 2014; Al Arif et al., 2018; Hamid, 2015).

The Financial Services Authority of Indonesia (2023) reports a significant increase in Islamic banking institutions as of May 2023. There are now 13 Islamic commercial banks and 20 Islamic windows, compared to just 5 commercial banks and 27 windows before the spin-off policy’s implementation. This law, enacted in 2008, mandated all Islamic windows to become full-fledged Islamic banks by 2023 (Pambuko et al., 2024). However, many Islamic windows haven’t completed this process, highlighting the need for further study on how spin-offs impact Islamic banking performance and their adherence to Sharia principles. Furthermore, the issue of spin-offs has also become one of the key strategies to enhance the contribution of Islamic banking in other countries. As reported, Pakistan, Bahrain, Kuwait, and Afghanistan are among the countries earnestly implementing this issue in the development of Islamic banks (ICD IsDB, 2022). Therefore, Indonesia, as a pioneer of the implementation of spin-off strategy in the Islamic banking sector, deserves to be a benchmark in the implementation of this strategy, particularly as an effort to sustain the Islamic banking industry.

In the last decade, many researchers have directed their attention toward identifying the impact of spin-off policies on the performance of Islamic banks. Several indicators of financial performance have been focused on, including profitability (Hamid, 2015; Nurkarim et al., 2021), efficiency (Al Arif et al., 2018; Al Arif, Mufraini, et al., 2020b; Al Arif & Nabilah, 2022; Hadziq et al., 2022; Pambuko, 2019; Rusydiana et al., 2019), market share (Al Arif, 2017; Al Arif et al., 2023), asset growth (Al Arif, 2015a; Al Arif et al., 2017), financing growth (Al Arif, 2015b), deposit growth (Al Arif, 2014, 2018b, 2018a; Al Arif et al., 2024), and market power (Rayyani et al., 2022). While there’s been a lot of research on spin-offs, how they affect a bank’s risk of financing risk (bad loans) has not been well-studied. This is an important gap to address, especially considering the recent Basel III framework from the Basel Committee on Banking Supervision (BCBS). These new global regulations aim to make banks worldwide more stable by considering all their risks, both from loans they’ve made (on-balance sheet) and from their commitments (off-balance sheet exposures) (Abdurraheem et al., 2023).

Concurrently, the management of bad financing or non-performing financing (NPF) presents a critical challenge for Islamic banking institutions in Indonesia (Imaduddin, 2008; Nugroho et al., 2018; Soekapdjo et al., 2018). Non-performing financing, characterized by loans or financing contracts in default or at risk of default, can have far-reaching implications on the stability and credibility of financial institutions (Hernawati et al., 2021). In traditional banking, its known as non-performing loan (NPL). The existence of financing risk can hinder the stability of Islamic banking entities, potentially jeopardizing their capacity to facilitate economic growth and foster financial inclusivity (Banna et al., 2022). Considering the distinct characteristics of Islamic finance, rooted in risk-sharing and asset-backed principles, a comprehensive exploration of how spin-off decisions influence financing risk, specifically non-performing financing, requires further investigation.

Studies on NPF in Islamic banks or NPL in conventional banks are still hotly discussed. Research suggests that external factors play a bigger role in NPLs for conventional banks, while both internal and external factors impact NPFs in Islamic banks (Loang et al., 2023; Setiawan et al., 2017). Furthermore, despite some inconsistencies in results, from a bank-specific perspective, an increase in non-performing financing is influenced by bank size, operating efficiency ratio, liquid asset ratio, financing to deposit ratio, and foreign ownership (Havidz & Setiawan, 2015; Hosen & Muhari, 2019; Osunkoya et al., 2023; Rahim & Zakaria, 2013; Saw et al., 2022; Zheng et al., 2019). On the other hand, the decrease in non-performing financing is influenced by an increase in net operating profit, capital adequacy ratio, return on assets, cost to income ratio, deposit funds growth, return on equity, loan growth, and market concentration (Hartanto & Samputra, 2023; Hosen & Muhari, 2019; Muhammad et al., 2020; Rahim & Zakaria, 2013; Zheng et al., 2019). Similarly, macroeconomic conditions also impact changes in banking’s financing risk. Exchange rates, inflation, and economic policy uncertainty contribute to an increase in non-performing financing (Firmansyah, 2014; Hosen & Muhari, 2019; Karadima & Louri, 2021; Osunkoya et al., 2023; Zheng et al., 2019), while GDP and unemployment contribute to a decrease in non-performing financing (Ferhi, 2018; Hassan et al., 2019; Hernawati et al., 2021; Le & Diep, 2020; Zheng et al., 2019). A surplus in foreign exchange reserves can also trigger a financing boom, which in turn can affect financing quality (Kuncoro, 2024).

This scientific paper aims to bridge these knowledge gaps by offering an empirical analysis of the relationship between spin-off decision and the prevalence of financing risk in the Indonesian Islamic banking sector. While previous research suggests spin-off decisions can improve financial performance, the potential effect on financing risk has been overlooked. This study will address this gap by examining how spin-offs influence financing risk. By untangling these linked factors, we aim to provide valuable insights for both academics and Islamic bankers, fostering a deeper understanding of how strategic restructuring impacts the financial soundness of Islamic banks. Moreover, given the intricate relationships between spin-off strategies and financing risk, policy implications and strategic recommendations stemming from this study could serve as a catalyst for informed decision-making within the Islamic banking industry.

Methods

To examine the impact of spin-off decisions on financing risk, this study utilizes semi-annual bank-level data from 2006 to 2022 for Islamic banks in Indonesia. The bank-specific data, derived from the financial statements of 35 Islamic banks, were acquired from the Islamic Banking Statistics which is reported by Indonesian Financial Services Authority (FSA). The sample consists of 16 full-fledged Islamic banks and 19 Islamic windows. Macroeconomic data were sourced from Statistics Indonesia, Bank Indonesia, and OPEC basket price. We employed an unbalanced panel dataset encompassing 1032 observations.

Table 1 explains the data we used in this study. We looked at the ratio of non-performing financing (NPF) to total financing, which is a common measure of bad loans in Islamic banks (Saw et al., 2022). Spin-off is a proxy for spin-off decisions, represented by a dummy variable where 1 denotes post-spin-off time and 0 signifies pre-spin-off time. The bank-specific factors include bank size (log total assets of each Islamic bank) and market share, assessed by the individual Islamic bank’s asset over the total asset industry of Islamic banks. To understand the economic climate, we looked at the Consumer Price Index (CPI) for inflation and the Industrial Production Index (IPI) for economic growth. The variable OIL is based on the OPEC basket price, which represents the per-barrel oil price.

Table 1. Regression variables.

VariableDescriptionSource
NPFNon-performing financingIslamic banking statistics
SpinoffDummy variable, it is one if the period after spin-off decision, zero otherwiseBanks’ profile
Bank size (SIZE)Natural logarithm of total assetsIslamic banking statistics
Market share (MS)The ratio of Islamic banks' assets to the industry's overall assetsIslamic banking statistics
CPIConsumer price indexBank of Indonesia
IPIIndustrial production indexStatistics Indonesia
Oil Price (OIL)A weighted average price of crude oil blends produced by the OPEC member countriesOPEC basket price

This study utilizes a dynamic panel regression model with individual fixed effects to assess the impact of spin-off decisions on financing risk for Islamic banks in Indonesia. The dynamic panel approach addresses both unobserved bank-specific characteristics and potential endogeneity issues that might bias the results. To further account for potential simultaneity and correlation between variables, the study employs the Generalized Methods of Moment (GMM) estimation technique. Equation (1) details the empirical model used in this analysis, which incorporates the spin-off decision as the main independent variable. Additionally, control variables such as bank size, market share, and macroeconomic factors like inflation, economic growth, and oil price are included to account for their potential influence on financing risk.

(1)
Yit=α+β1Yit1+β2Spinofft+β3BankSpecifici,t+β4MacroEconomict+εi,t

Where Yit is the non performing financing (NPF) for bank i and year t; Spinofft is a dummy variable, it is one if the period after spin-off decision, zero otherwise; BankSpecifici,t is control variable consisting of bank size dan market share; MacroEconomict is control variable consisting of inflation, economic growth, and oil price; and εi,t is the error term. The first lag of the dependent variable has been integrated into the model as an independent variable to address the possible persistence of NPF changes in time. Our analyses utilized a difference GMM Arellano-Bond estimator. To ensure robustness, we conducted a two-step System GMM estimator for further validation.

Then we analyze the impact of bank size on the interaction between spin-off decisions and non-performing financing. We created an interaction variable in the form of Spinofft*Sizeit for this purpose. The equation (2) represents the estimation model.

(2)
Yit=α+β1Yit1+β2Spinofft+β3SpinofftSizeit+β4BankSpecifici,t+β5MacroEconomict+εi,t

Data analysis was conducted using EViews 12 by S&P Global. Prior to interpretation, diagnostic tests were performed. The Sargan test was employed to assess the validity of the instruments, while the Arellano-Bond test was used to detect the presence of autocorrelation. A well-specified model should exhibit valid instruments and no autocorrelation.

Results and Discussion

Descriptive analysis

Table 2 presents descriptive statistics for the variables spanning from 2006 to 2022. The average value of NPF as a financing risk proxy stands at 3.10%. This value remains below the designated upper limit of 5.00. The lowest NPF value, at 0.00%, indicates that certain Islamic banks have no risky financing, although the highest NPF value recorded is 53.27%. This relatively high variability is supported by a standard deviation of 4.17%. Regarding assets and market share, the lower mean values compared to the standard deviation suggest that Islamic banks in Indonesia are still dominated by a few larger banks.

Table 2. Descriptive analysis of variables.

Obs.MeanMaxMinStd. Dev.
SPINOFF10320.271.000.000.45
NPF10323.1053.270.004.17
SIZE (IDR million)10329579281.35305727438.003176.0022725240.62
MS10323.2340.130.016.39
CPI10324.9015.531.332.70
IPI1032122.54151.7695.7118.33
OIL (IDR million/barrel)10320.861.700.340.28

Empirical results

The analysis commenced by identifying the issue of multicollinearity among the independent variables. Table 3 displays the correlation scores among the independent variables. A correlation score of < 0.8 was indicative of the absence of multicollinearity (Mukhibad, Nurkhin et al., 2023b; Rizvi et al., 2020). The highest correlation between independent variables was 0.5678 (correlation between SIZE and IPI), followed by SIZE and MS (0.5592). These findings signify the absence of multicollinearity within the model.

Table 3. Correlation matrix.

SIZEMSCPIIPIOIL
SIZE1
MS0.55921
CPI-0.37500.04421
IPI0.5678-0.0440-0.54171
OIL0.1693-0.0254-0.03300.27261

The subsequent analysis examines the impact of spin-off decisions on the financing risk of Islamic banks. Table 4 presents the outcomes of the difference GMM and system GMM. Difference GMM estimator is depicted in regressions (1)-(4), while system GMM estimator in regressions (5)-(8). Regressions (1) and (5) only incorporate bank-specific variables, consisting of assets (SIZE) and market share (MS). In regressions (2) and (6), we include additional control variables such as inflation (CPI), economic growth (IPI), and global oil prices (OIL). In regressions (3), (4), (7), and (8), we introduce interaction variables, specifically spin-off*size. Towards the end of the table, it is indicated that no issues of instrumental validity and autocorrelation were found. To elaborate, the results of the Sargan test reject the null hypothesis, confirming the validity of the instruments. Furthermore, the results of the Arellano-Bond autocorrelation test, AR(2), also reveal the absence of autocorrelation in the model.

Table 4. Determinants of Islamic banks’ performance.

Difference GMMSystem GMM
(1)(2)(3)(4)(5)(6)(7)(8)
NPF(-1)0.3599* (1385.50)0.3468* (349.62)0.3555* (593.07)0.3408* (134.95)0.3768* (2221.58)0.3737* (119.03)0.3761* (172.18)0.3687* (90.03)
spinoff1.1110* (380.49)0.6900* (63.40)-31.4797* (-172.45)-31.3797* (-40.51)-1.5722* (-1614.53)-1.6502* (-50.65)-19.8628* (-95.16)-23.4687* (-39.38)
spinoff*size1.1062* (165.72)1.0860* (37.81)0.6136* (75.08)0.7271* (36.60)
SIZE0.1351* (58.24)0.2951* (17.06)-0.1487* (-34.82)0.0808** (2.49)0.2491* (1814.80)0.2059* (6.34)0.1836* (35.65)0.2364* (7.82)
MS0.1760* (239.99)0.1574* (20.22)0.1327* (32.35)0.1042* (8.22)0.0349* (57.10)0.0366** (2.37)0.0286* (7.65)0.0327*** (1.66)
CPI0.0038* (4.40)0.0002 (0.10)0.0035* (4.58)0.0061* (3.01)
IPI-0.0002 (-0.10)-0.0065*** (-1.75)0.0106* (4.66)0.0047*** (1.72)
OIL-1.1527* (-97.11)-1.2491* (-49.54)-1.2242* (-36.87)-1.4065* (-34.90)
Sargan test0.38900.31660.40970.36010.39910.31550.39980.3029
AR(1)0.00000.02510.02970.0256
AR(2)0.16600.15320.14520.1467
No. of Obs.948948948948948948948948

* p<0.01.

** p<0.05.

*** p<0.1.

The findings from the analysis provide compelling evidence regarding the influence of the lagged dependent variable, NPF(-1), which consistently exhibits a statistically significant positive effect across all models at the 1% significance level. This outcome substantiates the notion that the financing risk experienced in the preceding period contributes to an increase in the non-performing financing ratio during the present period. This result underscores a significant challenge in the Islamic banking sector, suggesting that the mechanisms in place to address the issue of bad financing have not yet achieved optimal effectiveness. This aligns with previous research conducted by Mukhibad, Jayanto et al. (2023a), who reached similar conclusions in their study. Notably, the finding underscores the persisting complexity of managing NPF in Islamic banking and emphasize the need for more refined strategies to mitigate such risks. Interestingly, the result contrasts with those of Hartanto & Samputra (2023), whose research indicated a potential improvement in the non-performing financing situation from period t-1 to period t. This variation emphasizes the intricate and many-sided aspects of how financing risk behaves in Islamic banking.

Regarding the main focus of this study, it becomes apparent that the spin-off decisions undertaken by Islamic banks wield a substantial and statistically significant impact, consistently evident at the 1% significance level across all models. This pervasive influence, however, diverges in models (1) and (2). Specifically, the majority of models reveal a noteworthy negative effect resulting from the strategic choice of Islamic banks to embark on spin-offs. This intriguing discovery underscores a pivotal insight – that the judicious adoption of spin-off strategies by Islamic banks yields a salutary outcome, effectively tempering the levels of financing risk. This outcome resonates with the emerging understanding that Islamic banks’ autonomy in resource management holds the potential to substantially shape their risk profile. This profound effect echoes the findings of a distinct study, where a compelling revelation was made that full-fledged Islamic banks exhibit a more adept ability to mitigate non-performing financing as compared to Islamic windows (Pambuko & Pramesti, 2020; Pernamasari, 2020). These findings collectively affirm the advantageous influence of spin-off decisions in fostering improved risk management practices and enhancing the overall stability of Islamic banking entities.

We also investigated the impact of size on financing risk. The analysis results reveal that size has a significant positive impact on non-performing financing, except in model (3) where it has a negative impact. The finding indicates that an increase in the asset size will increase financing risk. The result supports the finding of Hosen and Muhari (2019) and Saw et al. (2022). It is also validated the ‘bad management theory’ proposed by Berger and DeYoung (1997). Within this theoretical framework, the orchestration of poor management practices within banking institutions leads to lower loan quality and increases the level of non-performing loans. Furthermore, these results are corroborated by the estimations of the interaction variable (spinoff*size), which significantly influences non-performing financing. Thus, larger Islamic banks that undergo spin-offs carry a higher financing risk compared to smaller banks.

Further analysis concerning the impact of market share on the financing risk of Islamic banks was conducted. Across all models, a positive relationship between market share and non performing financing is revealed, except in models (6) and (8), where the relationship is significant at the 5% and 10% levels, respectively. The finding strengthens the previous estimations indicating that greater asset dominance increases the potential for non-performing financing. As for the control variables, we only found robust and negatively correlated estimates for NPF and OIL. This negative relationship explains that an increase in global oil prices will decrease financing risk for Islamic banks. With a certain level of oil price increase, related product prices become more competitive, stimulating business sectors and lowering financing risk. As Abimanyu et al. (2023) pointed out, Indonesia’s policy aims to ensure that global oil price movements contribute positively to the state’s finances and trade, while minimizing inflationary risks. The result also supports the findings of Ryandono et al. (2022) dan Al Jabri et al. (2022). On the other hand, economic growth and inflation exhibit inconsistent results across each model.

Conclusion

This study investigates the impact of spin-off decision – the separation of Islamic windows from their conventional parent banks to become full-fledged Islamic banks – on financing risk in Indonesian Islamic banks. We estimate over a substantial timeframe in the journey of Islamic banks in Indonesia, spanning from 2006 to 2022. Our findings reveal that Islamic windows carry a higher risk compared to full-fledged Islamic banks that undergo spin-offs. We also discover that spin-off Islamic banks with larger assets are more exposed to risk than those with smaller assets. This notice is supported by the regression that financing risk increases with the growth of assets and market share. In essence, our study not only contributes to the empirical understanding of Islamic banking dynamics but also advances the discourse surrounding prudent risk management strategies in financial systems governed by ethical and Shariah-compliant principles.

These findings yield several policy implications. We have strong evidence that the independence of Islamic banks makes them more sensitive to risk and adept at mitigating it. Therefore, the mandatory spin-off policy to be implemented for all Islamic windows by the end of 2023 is a viable approach. Moreover, the potential rise in market dominance by Islamic banks, which could amplify financing risk, calls for complementary policies to mitigate the potential negative outcomes.

Ethical considerations

This study does not involve human participants, animal subjects, or plant specimens.

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Pambuko ZB, Sriyana J, Affandi A and Hakim A. Influence of spin-off decision on financing risk: Empirical insight from Indonesian Islamic banks [version 1; peer review: 2 approved with reservations]. F1000Research 2024, 13:1251 (https://doi.org/10.12688/f1000research.157435.1)
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ApprovedThe paper is scientifically sound in its current form and only minor, if any, improvements are suggested
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Reviewer Report 10 Jan 2025
Mutamimah Mutamimah, Universitas Islam Sultan Agung, Semarang, Central Java, Indonesia 
Approved with Reservations
VIEWS 18
The article is well written and meets the rules for good articles. The problem formulation is based on research gaps from previous research results. Apart from that, the research method is also appropriate, including the indicators, and statistical analysis and ... Continue reading
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Mutamimah M. Reviewer Report For: Influence of spin-off decision on financing risk: Empirical insight from Indonesian Islamic banks [version 1; peer review: 2 approved with reservations]. F1000Research 2024, 13:1251 (https://doi.org/10.5256/f1000research.172879.r353263)
NOTE: it is important to ensure the information in square brackets after the title is included in all citations of this article.
  • Author Response 04 Feb 2025
    Zulfikar Bagus Pambuko, Islamic Economics Law, Universitas Muhammadiyah Magelang, Magelang, Indonesia
    04 Feb 2025
    Author Response
    We would like to warmly thank you for reading our manuscript and your valuable comments which would substantially improve our paper. We have followed carefully all your comments in the ... Continue reading
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  • Author Response 04 Feb 2025
    Zulfikar Bagus Pambuko, Islamic Economics Law, Universitas Muhammadiyah Magelang, Magelang, Indonesia
    04 Feb 2025
    Author Response
    We would like to warmly thank you for reading our manuscript and your valuable comments which would substantially improve our paper. We have followed carefully all your comments in the ... Continue reading
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Reviewer Report 07 Nov 2024
Azharsyah Ibrahim, Universitas Islam Negeri Ar-Raniry, Banda Aceh, Indonesia 
Approved with Reservations
VIEWS 33
Summary
This paper investigates the impact of the spin-off decision (Islamic windows separating from conventional banks to become independent Islamic banks) on financing risk in Indonesian Islamic banks. Using semi-annual data from 2006-2022 for 35 Islamic banks, the study ... Continue reading
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Ibrahim A. Reviewer Report For: Influence of spin-off decision on financing risk: Empirical insight from Indonesian Islamic banks [version 1; peer review: 2 approved with reservations]. F1000Research 2024, 13:1251 (https://doi.org/10.5256/f1000research.172879.r336316)
NOTE: it is important to ensure the information in square brackets after the title is included in all citations of this article.
  • Author Response 04 Feb 2025
    Zulfikar Bagus Pambuko, Islamic Economics Law, Universitas Muhammadiyah Magelang, Magelang, Indonesia
    04 Feb 2025
    Author Response
    We would like to warmly thank you for reading our manuscript and your valuable comments which would substantially improve our paper. We have followed carefully all your comments in the ... Continue reading
COMMENTS ON THIS REPORT
  • Author Response 04 Feb 2025
    Zulfikar Bagus Pambuko, Islamic Economics Law, Universitas Muhammadiyah Magelang, Magelang, Indonesia
    04 Feb 2025
    Author Response
    We would like to warmly thank you for reading our manuscript and your valuable comments which would substantially improve our paper. We have followed carefully all your comments in the ... Continue reading

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Alongside their report, reviewers assign a status to the article:
Approved - the paper is scientifically sound in its current form and only minor, if any, improvements are suggested
Approved with reservations - A number of small changes, sometimes more significant revisions are required to address specific details and improve the papers academic merit.
Not approved - fundamental flaws in the paper seriously undermine the findings and conclusions
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