Muslim investors and the capital market: The role of religious scholars

Abdullah Almansour

Pacific-Basin Finance Journal, 2019, vol. 58, issue C

Abstract: We demonstrate that religious scholars play a significant role in shaping investment preferences of Muslim investors. We hand-collect texts containing Shari'a compliance advises (SCAs) by influential Shari'a scholars about the status of firms that planned an initial public offering (IPO) in Saudi Arabia during the period from 2005 to 2017. We found that the number of individuals subscribing to an IPO, on average, drops by around 60% if all Shari'a scholars agree, in their SCAs, to reject the firm as a Shari'a-compliant firm during the subscription period. Interestingly, if the scholars disagree, individuals show no significant reaction to scholars whose SCAs rejected the IPO.

Keywords: Religion; Social responsibility investments; Islamic finance; Initial public offering (IPO); Saudi Arabia (search for similar items in EconPapers)
JEL-codes: A13 D14 D91 G41 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:58:y:2019:i:c:s0927538x19302604

DOI: 10.1016/j.pacfin.2019.101211

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