Social norms and information asymmetry: the effect of religion on informed trading

Abdullah M. Al-Awadhi, Bader S. Alhashel and Ahmad Bash

Journal of Sustainable Finance & Investment, 2024, vol. 14, issue 3, 732-743

Abstract: This study investigates whether social norms impede informed trading. We use intraday data from Boursa Kuwait for January 2015 to December 2018, which clearly identifies institutions' religious identity. Consistent with our hypothesis, we find that the Islamic values of equality and trust lead to lower information asymmetry. Specifically, stocks of Islamic institutions experience lower informed trading in comparison to the stocks of non-Islamic institutions.

Date: 2024
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DOI: 10.1080/20430795.2021.2013152

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