A new model for screening Shariah-compliant firms
In this paper, a new quantitative measure is developed to assess how well a firm complies with Shariah compared to other firms in a particular region. Investors can customize this measure according to their goals, constraints, and beliefs. The following two reasons make the use of this measure prefe...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2022-12-01
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| Series: | Borsa Istanbul Review |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2214845022000953 |
| _version_ | 1797903422015406080 |
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| author | Abdullah Alnamlah M. Kabir Hassan Asem Alhomaidi Edib Smolo |
| author_facet | Abdullah Alnamlah M. Kabir Hassan Asem Alhomaidi Edib Smolo |
| author_sort | Abdullah Alnamlah |
| collection | DOAJ |
| description | In this paper, a new quantitative measure is developed to assess how well a firm complies with Shariah compared to other firms in a particular region. Investors can customize this measure according to their goals, constraints, and beliefs. The following two reasons make the use of this measure preferable to the existing use of ratio thresholds. First, it provides the Shariah-compliant investor with a clear understanding of the relative compliance status of each company he wishes to invest in. Second, it can be incorporated into any portfolio optimization model to ensure Shariah-compliance without compromising investment returns. Finally, the paper makes use of a sample of US publicly traded companies to demonstrate its illustrative results. |
| first_indexed | 2024-04-10T09:32:40Z |
| format | Article |
| id | doaj.art-fd9419e8e0b3480eb75161bef175c105 |
| institution | Directory Open Access Journal |
| issn | 2214-8450 |
| language | English |
| last_indexed | 2024-04-10T09:32:40Z |
| publishDate | 2022-12-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Borsa Istanbul Review |
| spelling | doaj.art-fd9419e8e0b3480eb75161bef175c1052023-02-19T04:25:47ZengElsevierBorsa Istanbul Review2214-84502022-12-0122S10S23A new model for screening Shariah-compliant firmsAbdullah Alnamlah0M. Kabir Hassan1Asem Alhomaidi2Edib Smolo3Department of Finance and Investment, College of Business Administration, Imam Muhammad ibn Saud Islamic University, Riyadh, Saudi ArabiaDepartment of Economics and Finance, College of Business Administration, University of New Orleans, 2000 Lakeshore Dr, New Orleans, LA 70148, USA; Corresponding author.Department of Finance, College of Business Administration, King Saud University, Riyadh, Saudi ArabiaDepartment of Finance, College of Business Administration, Effat University, Jeddah, Saudi ArabiaIn this paper, a new quantitative measure is developed to assess how well a firm complies with Shariah compared to other firms in a particular region. Investors can customize this measure according to their goals, constraints, and beliefs. The following two reasons make the use of this measure preferable to the existing use of ratio thresholds. First, it provides the Shariah-compliant investor with a clear understanding of the relative compliance status of each company he wishes to invest in. Second, it can be incorporated into any portfolio optimization model to ensure Shariah-compliance without compromising investment returns. Finally, the paper makes use of a sample of US publicly traded companies to demonstrate its illustrative results.http://www.sciencedirect.com/science/article/pii/S2214845022000953G31G32G33 |
| spellingShingle | Abdullah Alnamlah M. Kabir Hassan Asem Alhomaidi Edib Smolo A new model for screening Shariah-compliant firms Borsa Istanbul Review G31 G32 G33 |
| title | A new model for screening Shariah-compliant firms |
| title_full | A new model for screening Shariah-compliant firms |
| title_fullStr | A new model for screening Shariah-compliant firms |
| title_full_unstemmed | A new model for screening Shariah-compliant firms |
| title_short | A new model for screening Shariah-compliant firms |
| title_sort | new model for screening shariah compliant firms |
| topic | G31 G32 G33 |
| url | http://www.sciencedirect.com/science/article/pii/S2214845022000953 |
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