nep-isf New Economics Papers
on Islamic Finance
Issue of 2020‒06‒22
four papers chosen by

  1. Portfolio diversification between exchange rates and islamic stocks: evidence from the USA, Euro area, Japan and Malaysia By Kabir, Mustafa; Masih, Mansur
  2. Islam and Human Capital in Historical Spain By Cinnirella, Francesco; Naghavi, Alireza; Prarolo, Giovanni
  3. Contagious Animosity in the Field: Evidence from the Federal Criminal Justice System By McConnell, Brendon; Rasul, Imran
  4. Could Ramadan catalyze SARS-CoV-2 spread? Preliminary results By Jarynowski, Andrzej; Płatek, Daniel

  1. By: Kabir, Mustafa; Masih, Mansur
    Abstract: This paper uses the daily data from four counties to estimate the portfolio diversification opportunities between Islamic stock prices and exchange rates. Although there are many works on stocks and exchange rates in the field of conventional finance, there is relatively few work in the field of Islamic finance. This study makes an attempt to fill in this gap by applying recent and appropriate methodologies such as, MGARCH-DCC, MODWT and CWT. The results tend to indicate that the portfolio diversification opportunities between Islamic stocks and exchange rates are not conclusive but vary depending on the stock- holding periods in the short and long run. Hence the Islamic stock holders should take into account the investment horizons of their stocks while diversifying their stocks across with exchange rates.
    Keywords: Islamic stocks, exchange rates, portfolio diversification, MGARCH-DCC, MODWT, CWT, Malaysia
    JEL: C22 C58 G11 G15
    Date: 2019–07–15
  2. By: Cinnirella, Francesco; Naghavi, Alireza; Prarolo, Giovanni
    Abstract: This paper studies the impact of Muslim rule on human capital development. Using a unique novel dataset containing yearly data on Muslim presence in the period 711-1492 and literacy rate in 1900 for about 7500 municipalities in Spain, we estimate the local impact of the length of Muslim rule in the medieval period on literacy rate. Our findings reveal an extremely robust negative relationship between length of Muslim rule and levels of human capital. This result is robust to the inclusion of other possible confounding factors such as the Reconquista and the Inquisition. We argue that the characteristics of Islamic law discouraged the formation of a strong merchant class and subsequently impeded the development of forms of local self-government. This translated into lower levels of human capital for regions longer under Muslim rule. Indeed, panel estimates on a sample of cities provide evidence that locations under Muslim domination missed out on the critical junctures of institutional changes which led to a stagnation in the accumulation of human capital.
    Keywords: education; Literacy; Merchant class; Muslim rule; Self-government; Spain
    JEL: H75 I25 N33 O10 O30 Z12
    Date: 2020–04
  3. By: McConnell, Brendon; Rasul, Imran
    Abstract: A vast literature uses ingroup biases to explain animus towards others. The notion can be extended to multi-identity societies, where social preferences are defined over one ingroup and multiple outgroups. We use a novel research design to recover the structure of social preferences across outgroups in a high stakes setting. We investigate whether increased animosity towards Muslims post 9-11 had spillover effects on Black and Hispanic individuals in the federal criminal justice system. Using linked administrative data tracking defendants from arrest through to sentencing, we find that as 9-11 increased animosity towards Muslims, sentence and pre-sentence outcomes for Hispanic defendants significantly worsened. Outcomes for Black defendants were unchanged. We underpin a causal interpretation of our findings by providing evidence to support the identifying assumptions underlying the research design. The findings are consistent with judges and prosecutors displaying social preferences characterized by contagious animosity from Muslims to Hispanics. To understand why increased animosity towards Muslims post 9-11 could spillover onto Hispanics, we draw on work in sociology to detail how Islamophobia and immigration have become intertwined in American consciousness since the mid 1990s, but were forcefully framed together in the aftermath of 9-11. We narrow the interpretation of the results as being driven by social preference structures using decomposition analysis, and correlating sentencing differentials to judge characteristics, including their race/ethnicity. Our findings provide among the first field evidence of contagious animosity, so that social preferences across outgroups are interlinked and malleable
    JEL: D91 J15
    Date: 2020–05
  4. By: Jarynowski, Andrzej; Płatek, Daniel
    Abstract: Around 1.8 billion Muslims worldwide celebrate in some extent the holy month of Ramadan during COVID-19 pandemic. Some increase their attendance worship sites and traditional dining in extended families, so infectious contact rates could increase. Moreover, fasting could increase the probability of acquiring SARS-CoV-2 infection. There are mitigation measures (e.g. Healthy Ramadan by WHO) applied to reduce the SARS-CoV-2 spread, however their real impact is still unknown. Multiple studies assessed observed effects of contact rates increase during holidays as Chinese New Year in January and Passover and Easter in April and their short-time effects on COVID-19 transmission dynamics. However, there are any quantitative attempts considering epidemiological consequences of the holy Ramadan (at least up to our knowledge and keywords search in various databases until the submission day). We analyze the fractions of Muslims and time series of COVID-19 daily incidence and cases numbers for 197 countries and territories. We found statistically significant positive link with proportion of Islam adherents with increase in normalized new cases of COVID-19 during 1-18 May 2020. Moreover, growth of incidences in May is statistically significantly greater than in a control (April).
    Date: 2020–05–21

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