Stock Performance Under Alternative Shariah Screening Methods: Evidence from Australia
El Saleh, A.I. and Jurdi, D.J. (2020), Stock performance under alternative Shariah screening methods: Evidence from Australia. Accounting and Finance. https://doi.org/10.1111/acfi.12735
Posted: 6 Mar 2021
Date Written: December 6, 2020
Abstract
This paper examines the effect of Shariah screening on performance. We use the constituents of the ASX200 to identify Shariah‐compliant investments (SCI) using eight different Shariah screening methods (SSMs) and investigate the effect of quantitative screening ratios and purification ratios on performance. We find significant differences in the constituents of the SCI universe and performance across SSMs. Our results demonstrate consistent evidence that the debt and purification ratios are negatively associated with SCI performance. However, we find mixed results for the impact of liquidity ratios on performance.
Keywords: Ethical finance Shariah screening Islamic finance Stock performance
JEL Classification: G1
Suggested Citation: Suggested Citation
Financial Research Network (FIRN) ( email )
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia