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The role of the stock market in the provision of Islamic development finance: Evidence from Sudan

  • Hearn, Bruce
  • Piesse, Jenifer
  • Strange, Roger
Registered author(s):

    This paper assesses the impact of stock exchange funding in the Shari'ya compliant Islamic economy of Sudan. Evidence suggests that while Islamic financial instruments have considerable potential in facilitating development finance through their emphasis on partnership this is better achieved by the banking system rather than the Khartoum Stock Exchange. A case study of the Sudan Telecommunications company shows that larger firms able to cross-list elsewhere are likely to choose regional markets in preference to their domestic one thus benefiting from lower costs of equity. However, governance preferences are likely to favour block shareholders following the Islamic finance partnership concept.

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    File URL: http://www.sciencedirect.com/science/article/pii/S1566014111000306
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    Article provided by Elsevier in its journal Emerging Markets Review.

    Volume (Year): 12 (2011)
    Issue (Month): 4 ()
    Pages: 338-353

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    Handle: RePEc:eee:ememar:v:12:y:2011:i:4:p:338-353
    DOI: 10.1016/j.ememar.2011.04.004
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620356

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    1. Timur Kuran, 2004. "Why the Middle East is Economically Underdeveloped: Historical Mechanisms of Institutional Stagnation," Journal of Economic Perspectives, American Economic Association, vol. 18(3), pages 71-90, Summer.
    2. Aggarwal, Rajesh K & Yousef, Tarik, 2000. "Islamic Banks and Investment Financing," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 32(1), pages 93-120, February.
    3. Presley, John R & Sessions, John G, 1994. "Islamic Economics: The Emergence of a New Paradigm," Economic Journal, Royal Economic Society, vol. 104(424), pages 584-96, May.
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    8. Jahan-Parvar, Mohammad & Waters, George, 2009. "Equity Price Bubbles in the Middle Eastern and North African Financial Markets," MPRA Paper 17859, University Library of Munich, Germany.
    9. Hearn, Bruce, 2011. "Modelling size and liquidity in North African industrial sectors," Emerging Markets Review, Elsevier, vol. 12(1), pages 21-46, March.
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    11. Hayat, Raphie & Kraeussl, Roman, 2011. "Risk and return characteristics of Islamic equity funds," Emerging Markets Review, Elsevier, vol. 12(2), pages 189-203, June.
    12. Campbell R. Harvey, 1994. "Conditional Asset Allocation in Emerging Markets," NBER Working Papers 4623, National Bureau of Economic Research, Inc.
    13. Kuran, T., 1995. "Islamic Economics and the Islamic Subeconomy," Papers 9505, Southern California - Department of Economics.
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