Does it pay to be Shariah-compliant? Evidence from the European stock market
The comparison of financial results between different cultural and religious systems is still an open academic debate. There is no consensus among scholars on the existence and magnitude of financial performance differences for companies acting under diverse cultural and religious background. The...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Università degli Studi di Torino
2019-02-01
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| Series: | European Journal of Islamic Finance |
| Subjects: | |
| Online Access: | https://www.ojs.unito.it/index.php/EJIF/article/view/3073 |
| _version_ | 1819058975110332416 |
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| author | ANTONIO SALVI MARIANNA ZITO ALESSANDRA CARAGNANO |
| author_facet | ANTONIO SALVI MARIANNA ZITO ALESSANDRA CARAGNANO |
| author_sort | ANTONIO SALVI |
| collection | DOAJ |
| description | The comparison of financial results between different cultural and religious systems is still an open academic debate. There is no consensus among scholars on the existence and magnitude of financial performance differences for companies acting under diverse cultural and religious background.
The aim of this paper is to compare the performance of European listed firms applying Shariah principles and those who do not act according to such guidelines. To serve such purpose we have built a sample of companies operating with Shariah-based principles of management and compared the latter with a control comprising companies that do not adopt Shariah parameters over the period 2005–2017.
Results suggest that the Shariah-compliant sample performs better than the conventional one. In particular, during the recent recession, Shariah-compliant companies obtained better periodical stock market returns and even in the event of negative returns, losses posted by these companies were lower than those of conventional companies. Moreover, Shariah-compliant sample presents a lower risk-profile than conventional one. |
| first_indexed | 2024-12-21T14:03:44Z |
| format | Article |
| id | doaj.art-f11dc4c7e90a426e9ed8a00e3bc4dd14 |
| institution | Directory Open Access Journal |
| issn | 2421-2172 2421-2172 |
| language | English |
| last_indexed | 2024-12-21T14:03:44Z |
| publishDate | 2019-02-01 |
| publisher | Università degli Studi di Torino |
| record_format | Article |
| series | European Journal of Islamic Finance |
| spelling | doaj.art-f11dc4c7e90a426e9ed8a00e3bc4dd142022-12-21T19:01:17ZengUniversità degli Studi di TorinoEuropean Journal of Islamic Finance2421-21722421-21722019-02-0116https://doi.org/10.13135/2421-2172/3073Does it pay to be Shariah-compliant? Evidence from the European stock marketANTONIO SALVI0MARIANNA ZITO1ALESSANDRA CARAGNANO2LUM Jean Monnet UniversityLUM Jean Monnet UniversityLUM Jean Monnet UniversityThe comparison of financial results between different cultural and religious systems is still an open academic debate. There is no consensus among scholars on the existence and magnitude of financial performance differences for companies acting under diverse cultural and religious background. The aim of this paper is to compare the performance of European listed firms applying Shariah principles and those who do not act according to such guidelines. To serve such purpose we have built a sample of companies operating with Shariah-based principles of management and compared the latter with a control comprising companies that do not adopt Shariah parameters over the period 2005–2017. Results suggest that the Shariah-compliant sample performs better than the conventional one. In particular, during the recent recession, Shariah-compliant companies obtained better periodical stock market returns and even in the event of negative returns, losses posted by these companies were lower than those of conventional companies. Moreover, Shariah-compliant sample presents a lower risk-profile than conventional one.https://www.ojs.unito.it/index.php/EJIF/article/view/3073islamic financeshariah-compliant stockseuropean marketsfinancial performanceethical investments |
| spellingShingle | ANTONIO SALVI MARIANNA ZITO ALESSANDRA CARAGNANO Does it pay to be Shariah-compliant? Evidence from the European stock market European Journal of Islamic Finance islamic finance shariah-compliant stocks european markets financial performance ethical investments |
| title | Does it pay to be Shariah-compliant? Evidence from the European stock market |
| title_full | Does it pay to be Shariah-compliant? Evidence from the European stock market |
| title_fullStr | Does it pay to be Shariah-compliant? Evidence from the European stock market |
| title_full_unstemmed | Does it pay to be Shariah-compliant? Evidence from the European stock market |
| title_short | Does it pay to be Shariah-compliant? Evidence from the European stock market |
| title_sort | does it pay to be shariah compliant evidence from the european stock market |
| topic | islamic finance shariah-compliant stocks european markets financial performance ethical investments |
| url | https://www.ojs.unito.it/index.php/EJIF/article/view/3073 |
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