Islamic labeled firms: Revisiting Dow Jones measure of compliance

Billions of dollars, across 131 countries, are invested in Islamic law‐compliant funds that are often promoted as consistent with the spirit and overall objectives of Islam (Maqasid Al‐Sharia), thereby indicating they are more socially responsible, less risky, and less prone to failure. The empirical results of this study indicate that Shariah‐compliant firms identified by the Dow Jones do not have higher corporate social responsibility (CSR) scores, lower risk, or lower likelihood of failure than non‐compliant firms. We address endogeneity using the instrumental variable (IV) approach and selection bias using propensity score matching (PSM). Our results are similar when using the Dow Jones Islamic Market World, the Financial Times Stock Exchange Islamic Index, and the Hong Kong and Shanghai Banking Corporation indices and when using CSR scores provided by multiple databases. We create an index to measure compliance with Islamic law that overcomes several flaws in the binary measures currently employed in the industry. This index can help Shariah‐compliant funds to fulfill their promise by constructing portfolios that are both compliant with Islamic rulings and consistent with the spirit and objectives of Islam in being more socially responsible, less risky, and less prone to failure

The importance of service quality in British Muslim’s choice of an Islamic or non-Islamic bank account

Using an extended SERVQUAL model, this study identifies and compares the importance of service quality to Muslim consumers with an Islamic or non-Islamic bank account in a non-Muslim country, Britain. Eight group discussions and survey with 300 Muslims were conducted. Five dimensions of service quality were identified, i.e. Responsiveness, Credibility, Islamic Tangibles, Accessibility and Reputation. These differ in structure and content from the original SERVQUAL developed in the west and the subsequent CARTER model constructed in a Muslim country. In addition, significant differences were found in the importance rating of items by respondents holding an account with an Islamic bank compared to those with a non-Islamic bank account. This study is one of the first to identify and compare the importance of service quality between Islamic and non-Islamic bank account holders in a western non-Muslim country. The results advance our understanding of the impact of culture on SERVQUAL. The study provides insight into Muslims’ bank choice and helps bank managers of both Islamic and non-Islamic banks to focus their attention on the service quality dimensions that matter most to Muslim customers

Qur’anic Ethics for Environmental Responsibility: Implications for Business Practice

Despite the growing interest in examining the role of religious beliefs as a guide towards environmental conscious actions, there is still a lack of research informed by an analysis of divine messages. This deficiency includes the extent to which ethics for environmental responsibility are promoted within textual divine messages; types of environmental themes promoted within the text of divine messages; and implications of such religious environmental ethics for business practice. The present study attempts to fill this gap by conducting a thorough content analysis of environmental themes within the divine message of Muslims (the Qur’an) focusing on their related ethical aspects and business implications. The analysis has revealed 675 verses in 84 chapters throughout all 30 parts of the Qur’an, with environmental content relating to the core components of the natural world, i.e. human beings, water, air, land, plants, animals, and other natural resources. This environmental content and its related ethics are grounded on the belief that humans are vicegerents of God on the earth and their behaviours and actions are motivated by earthly and heavenly rewards. Implications of these findings for different sectors/businesses are also highlighted