Religion vs. ethics: Tail dependence between Sukuk, green bond, Islamic Fintech, and fourth industrial revolution assets

Mustafa Raza Rabbani, M. Kabir Hassan, Syed Mabruk Billah, Muneer Shaik and Zairihan Abdul Halim

Pacific-Basin Finance Journal, 2025, vol. 90, issue C

Abstract: The study investigates the tail reliance of Sukuk, green bonds, and seven other conventional and Islamic Fintech assets (fourth industrial revolution assets) using the daily pricing data for various financial instruments from 20th December 2019 to 24th March 2024. Using the quantile-on-quantile method of Sim and Zhou (2015), to investigate the tail dependency among the returns of various markets and Sukuk (GB), and the quantile cross-spectral (coherency) model of Baruník and Kley (2019), to evaluate the dependence relationship between the returns of various markets and Sukuk. The study's findings indicate that the interdependence of Sukuk and green bonds with other Fourth Industrial Revolution assets act differently in bullish, bearish, and normal market circumstances and across short, medium, and long-term time horizons. The study is significant because it demonstrates the strong safe-haven qualities of green bonds (ethical) and Sukuk (religious). It contends that including green bonds in a portfolio will provide important diversification benefits, especially during uncertain times.

Keywords: Fintech; Green bond; Industrial revolution; Sukuk, quantile coherency (search for similar items in EconPapers)
JEL-codes: E51 G11 G15 G23 O16 O33 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:90:y:2025:i:c:s0927538x25000204

DOI: 10.1016/j.pacfin.2025.102683

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