Deviation from religious trading norms

Alawadhi, A 2019, 'Deviation from religious trading norms', Journal of Behavioral and Experimental Finance, vol. 22, pp. 22-30.


Document type: Journal Article
Collection: Journal Articles

Title Deviation from religious trading norms
Author(s) Alawadhi, A
Year 2019
Journal name Journal of Behavioral and Experimental Finance
Volume number 22
Start page 22
End page 30
Total pages 9
Publisher Elsevier B.V.
Abstract This paper investigates whether religiosity influences the preference of institutional investors to hold lottery-type stocks. We use data from Kuwait, which is characterized by a high level of religiosity, clearly defined investing Islamic religious rules and clear identification of the institutional investor's religious identity. We find that Islamic institutional investors deviate from their religious norms by holding more lottery-type stocks than non-Islamic institutional investors, and this deviation may be explained by the evidence that Islamic institutional investors have stronger information signals to induce them to trade risky gambling stocks. Our results highlight a challenge for the regulators and Islamic Shariah auditors in countries that have Islamic institutions; namely, to ensure that the operations of Islamic institutions are free from prohibited excessive uncertainty (Gharar).
Subject Banking, Finance and Investment not elsewhere classified
Keyword(s) Islamic trading
Lottery-type stocks
Religiosity
DOI - identifier 10.1016/j.jbef.2019.01.002
Copyright notice © 2019 Elsevier B.V.
ISSN 2214-6350
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