In the past decade, there has been strong growth in Islamic finance and banking across the globe, there is little empirical evidence on the impact of religiosity on financial decisions. This paper aims to address this issue.
This paper uses an experimental design to investigate the investment behaviours of a group of Muslims.
The paper finds that Islam does influence investment behaviour, however, the degree to which it does this is influenced by the degree of religiosity of the individual. In addition, evidence is found of “Western style” wealth maximisation amongst Muslim investors as well as a desire to consider sustainable investment principles in asset allocations.
These findings have implications for investors, financial advisors, and policy makers.
The paper is original its use of the experimental design to test the impact of religiosity in the context of investment decisions by Muslims.
