Jamshid Karimov

Citation

Thesis Title
Essays on Shari’ah Compliant Equities

The volume of Islamic finance is increasing. There has been no detailed empirical research analysing the effect the adoption of the Shari’ah Compliance Requirements (SCR; criteria mandated by Islam) has on the cost of equity, payout policy, and firm-level political risk. Mr Karimov investigated the impact of adopting SCR on these elements. He provided a novel approach that sheds light on Islamic equity studies. He found that firms can expect long-term benefits from adopting SCR; namely, reducing equity costs by increasing investor bases and liquidity. He also found that SCR adoption eventually led to a fall in the portion of debt and a rise in the portion of payout in smoothing income (the shifting of revenue and expenses among different reporting periods, giving an impression of steady business earnings). Overall, political risk had a negative effect on both the cost of equity and dividend payouts after SCR adoption.

Supervisors
Professor Faruk Balli
Professor Anne De Bruin
Professor Hatice Ozer Balli