Significance of Social Capital and Risk Sharing

Adam Ng, Abbas Mirakhor and Mansor Ibrahim

Chapter Chapter 1 in Social Capital and Risk Sharing, 2015, pp 1-11 from Palgrave Macmillan

Abstract: Abstract Commerce in the Middle Ages (737–1478) was characterized by extensive and intensive cross-border trade flows financed by risk-sharing partnerships.1 In Europe, trade was facilitated by commenda, an equity-based partnership that became the most popular organizational form of maritime ventures, particularly in Pisa and Venice.2 There is consensus among medieval historians that commenda was of the highest importance and contributed immensely to the rapid growth of trade and investment leading to economic change and development in Europe.3 Commenda’s contributions to industrial development of Ruhr Valley in Germany and in building railroads in Europe were particularly pronounced. While the origin of commenda has been a subject of debate, the preponderance of evidence traces the adoption of commenda back to Islamic sources (Udovitch, 1970; Al-Hassani and Mirakhor, 1989). Research has shown that Islamic partnership (mudarabah) was brought from Jerusalem to France during the late twelfth century and was incorporated into the Lex Mercatoria—the medieval European law of commerce.4

Keywords: Social Capital; Stock Market; Risk Sharing; Rule Compliance; Islamic Finance (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (2)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:pal:psibcp:978-1-137-47605-0_1

Ordering information: This item can be ordered from
http://www.palgrave.com/9781137476050

DOI: 10.1057/9781137476050_1

Access Statistics for this chapter

More chapters in Palgrave Studies in Islamic Banking, Finance and Economics from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().