"Islamic Finance Researches" (IFR)

The Impact of Islamic Components on Banks’ Individual Shareholders’ Decision-Making

Document Type : Science - Research (Islamic Banking)

Authors

1 Assistant Professor at Finance and Banking, Allameh Tabatabai University, Tehran, Iran.

2 .A. in Finance and Banking, Allameh Tabatabaei University, Tehran, Iran.

Abstract

In this research, we have investigated the effect of Islamic components on banks’ individual shareholders’ decision-making. For this purpose, we have used five variables of transparency, interest-free banking, profit and loss sharing, Islamic securities preference and the correct implementation of Islamic contracts. To this end, 170 individual equity holders of the banks accepted in Tehran Stock Exchange and OTC have randomly been selected and the required data have been collected through field survey method and questionnaires. The research findings show that among Islamic components, interest-free banking, transparency and profit and loss sharing have a positive and significant effect on the decision-making of the individual shareholders of banks but the Islamic preference for securities and the correct implementation of Islamic contracts do not have a significant effect on their decisions. Also, the transparency variable has a high impact level, whereas profit and loss sharing and interest-free banking have a moderate effect on banks’ individual shareholders’ decision-making.

Keywords

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Volume 9, Issue 1 - Serial Number 17
November 2019
Pages 205-236
  • Receive Date: 21 January 2018
  • Revise Date: 09 May 2018
  • Accept Date: 10 July 2018