EconPapers    
Economics at your fingertips  
 

Financial fusion: Bridging Islamic and Green investments in the European stock market

Afzol Husain, Sitara Karim and Ahmet Sensoy

International Review of Financial Analysis, 2024, vol. 94, issue C

Abstract: Given the historic decoupling nature of Islamic and green financial instruments with conventional financial markets this study investigated the interconnectedness of the European financial market with green and Islamic financial instruments amidst the unprecedented global dynamics and mounting uncertainties. Considering data from January 02, 2015, to October 03, 2023 and using TVP-VAR and Wavelet Coherence, our empirical findings challenge conventional assumptions about the behaviour of Islamic and green financial instruments in times of economic distress. While traditional financial instruments may falter, both Islamic and green financial instruments emerge as resilient options during market crises as indicated using quantile TVP-VAR as robustness measure. Both Islamic and Green bonds display remarkable potential for stability and resilience for European investors. For investors navigating the complexities of financial markets, especially during economic distress, our findings offer valuable guidance. Incorporating Islamic and green financial instruments, alongside diversified bond portfolios, emerges as a robust strategy. We strongly advocate the inclusion of both sukuk and green bonds in investment portfolios. Our result research also holds significant implications for policymakers.

Keywords: European stocks; Faith vs finance; Green markets; Sukuk (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1057521924002734
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:94:y:2024:i:c:s1057521924002734

DOI: 10.1016/j.irfa.2024.103341

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu (repec@elsevier.com).

 
Page updated 2024-12-28
Handle: RePEc:eee:finana:v:94:y:2024:i:c:s1057521924002734