An Analytical Model of Profit-sharing in an Islamic Economy

Masudul Alam Choudhury
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Masudul Alam Choudhury: University College of Cape Breton

Chapter 6 in Contributions to Islamic Economic Theory, 1986, pp 72-86 from Palgrave Macmillan

Abstract: Abstract Financial institutions are today evolving in many Islamic countries that base their economic activities on the principle of profit-sharing commonly known in the Islamic literature as mudarabah. Such institutions are: the Islamic Development Bank at Jeddah, Nasser Social Bank of Egypt, Dubai Islamic Bank, Kuwait Finance House, Faisal Islamic Bank of Egypt, Faisal Islamic Bank of Sudan, Jordan Islamic Bank of Finance and Investment, Islamic Bank of Bahrain, National Investment Trust of Pakistan, Investment Corporation of Pakistan, Islamic Banking System of Luxembourg, Islamic Investment Company of Geneva, Islamic Investment Company of the Bahamas. There are several more emerging. While these institutions are about to undertake extensive profit-sharing schemes in investment it is important to be aware of the inner working of this system vis-à-vis the profit rate and the profit-sharing ratio and the implications of these on risk diversification of investment portfolios.

Keywords: Business Sector; Indifference Curve; Individual Investor; Common Stock; Islamic Banking (search for similar items in EconPapers)
Date: 1986
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-07728-1_7

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DOI: 10.1007/978-1-349-07728-1_7

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