BANK RESILIENCE AND POLITICAL INSTITUTIONS: DO BANKING BUSINESS MODELS MATTER?

Ooi Kok Loang ()
Additional contact information
Ooi Kok Loang: City University Malaysia, Malaysia

Journal of Islamic Monetary Economics and Finance, 2023, vol. 9, issue 2, 313-336

Abstract: This study examines the impact of Sustainable Development Goals (SDGs) on behavioral biases, namely herding and risk-averse behaviors, in Sharia-compliant stocks. It also explores the mediating effect of investors’ sentiments on the relationship between SDGs and behavioral biases. Adopting panel data and quantile regressions, we find that SDGs 4, 8, 10, 11, and 13 significantly and positively correlate with stock returns in Indonesia, Kuwait, Oman, and Qatar. However, SDG 7 is the only SDG goal that is significant to Saudi and UAE stock returns. The results imply a complete mediation as the SDGs have caused changes in investors’ sentiment and subsequently triggered the investors to herd and become risk-averse. The impact of SDGs is more pronounced in the upper and lower quantiles of Indonesia, Saudi, and UAE stock returns, as well as the median quantile of Bahrain, Kuwait, Oman, and Qatar stock returns. The results of this study can benefit policymakers, regulators, and practitioners in identifying the best SDG practices to assist Sharia-compliant stocks in Indonesia and Gulf Cooperation Council (GCC) countries to attain better stock returns and improve investors’ sentiments and behaviors. The results can also assist governments in weighing the impact and benefits of adopting SDGs in different Muslim countries.

Keywords: Sustainable development goals (SDG); Herding; Risk-averse; Islamic finance; GCC countries (search for similar items in EconPapers)
JEL-codes: F30 G15 G18 G40 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://jimf-bi.org/index.php/JIMF/article/view/1611/939 (application/pdf)

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:idn:jimfjn:v:9:y:2023:i:2f:p:313-336

DOI: 10.21098/jimf.v9i2.1611

Access Statistics for this article

Journal of Islamic Monetary Economics and Finance is currently edited by Dr. Ali Sakti

More articles in Journal of Islamic Monetary Economics and Finance from Bank Indonesia Contact information at EDIRC.
Bibliographic data for series maintained by Lutzardo Tobing ( this e-mail address is bad, please contact ) and Jimmy Kathon ().