This study is a first attempt at testing the extent of contagion for conventional and Shari’ah-compliant stock indices. We examine the period surrounding the U.S. subprime crisis of 2007–9 and the Lehman Brothers collapse of 2008 to determine the relative extent of contagion. We find no clear evidence of contagion during the subprime crisis however, during the Lehman collapse most conventional indices showed contagion. Interestingly, the Shari’ah-compliant indices mostly do not show evidence of contagion. Collectively, our results have important implications for fund managers in terms of asset allocation risk and policymakers seeking an optimal policy response to crises.

Purpose: The argument whether gold is a hedge or haven is a debatable issue. Mainly, hedge is a class of asset that is negatively correlated with another asset or portfolio on average. On the other hand, a safe haven is an asset or portfolio which is negatively correlated with another asset or portfolio at the time of market turmoil. Therefore, the purpose of this research is to take Saudi Arabia as an example to examine the relationship of gold price in Saudi Arabia with key determinants such as the stock market index, oil prices, exchange rate, interest rate and consumer price index (CPI) by application of the autoregressive distributed lag model (ARDL). Design/methodology/approach: The ARDL analysis was employed by using six variables based on the application of monthly time series data that were collected from 2011 to 2015. Findings: From the present analysis, it has been discovered that gold is useful as a portfolio hedge and as a hedge against inflation because it is not affected by the CPI. External factors, for example, financial crisis, may be harmful to the CPI, thus adding a certain percentage of gold in the investment portfolio may assist in decreasing the level of risk at the time of financial turmoil. Originality/value: Because gold seems to be a useful portfolio hedge, as well as an inflation hedge, government policies to curb the import of gold may be futile. The present research suggests that policies that directly address the causes of inflation and provide alternative investment opportunities for retail investors may better serve the objective of decreasing gold imports.

Purpose: This study aims to explore the potentials of adoptingsalam-based crowdfunding for financing the agricultural sector in Afghanistan.Design/methodology/approach: It adopts a triangulation approach, consisting of a number of methods used in gathering relevant information about Afghanistan’s agricultural sector, the concept of crowdfunding andsalam(forward sale) contract. These methods include library research, reviewing documents provided by Afghanistan’s banks and semi-structured interviews with Islamic finance experts.Findings: This study finds thatsalam-based crowdfunding is a viable Sharīʿah-compliant investment platform, which may offer some advantages for both potential investors and farmers or entrepreneurs.Originality/value: The novelty of this paper lies in the proposed structure ofsalam-based crowdfunding.

Purpose: Islamic finance has exhibited immense potential to transform the global financial landscape in the recent years. In reaction to the trend, Nigeria introduced Islamic banking system to cater to the need of the teeming population and promote financial inclusion, among other potential benefits. Unfortunately, the notable growth recorded by the banks since the inception of the Islamic banking system is slowing down because of religiously induced sentiments and criticisms championed by certain non-Muslim segments of the society. Interestingly, even with the impish hype and publicity, non-Muslims make a significant customer base of the Islamic banks. Therefore, the current paper aims to investigate the factors influencing the choice of Islamic banking among non-Muslim customers, using the theory of planned behaviour as a conceptual framework. Design/methodology/approach: This research adopts a positivist approach and relies on facts and quantitative data in an objective manner. Positivism emphasizes on using scientific methods to derive factual and quantifiable results. Findings: Based on the regression analysis, subjective norm was found to be the most significant factor influencing the choice of Islamic banking followed by perceived behavioural control and attitude. As a result, it is important for Islamic banking institutions and relevant regulatory agencies to take preemptive measures that may protect and enhance these factors in a bid to promote patronage and eventual success of Islamic banking in Nigeria, especially in the face of growing scepticism. Originality/value: The existing literature focuses on the choices of either Muslims without due emphasis on the determinant of choice in the case of non-Muslim customers. The growing support of Islamic banking products, cutting across religious divides, compels research on the factors that influence the choice of Islamic banking among non-Muslim customers. Hence, this research seeks to bridge the gap in the existing literature by embarking on an investigation into the factors influencing the choice of Islamic banking among non-Muslim customers in the context of Nigeria.

This study is the first attempt to investigate the relationship between the level of risky assets and capital level in a mixed Malaysian banking system covering 83 months starting December 2006. The results of dynamic ordinary least squares indicate positive relationship between capital ratio (CAR) and risk-weighted asset ratio (RWA) in the long run. Furthermore, the causality analysis based on panel vector error correction model (VECM) and two-step dynamic system generalized method of moments indicates unidirectional causality from CAR to RWA. Our results further suggest that higher capital growth and capital buffer provide an extra cushion for the Malaysian banks to pursue relatively riskier financial activities, and the nature of risk-taking behavior of Islamic banks follows that of the conventional banks.