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Toward new strategies of Islamic financial products development

Author

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  • Walid Mansour

Abstract

Purpose - This paper aims to propose a conceptual framework for the assessment of Islamic financial products’ development. Design/methodology/approach - A coordinate grid with two perpendicular axes (profitability and compliance to Shari’ah) is developed and used to produce a nine-zone matrix. The research design is further developed by using a linear, composite index to assess product development feasibility and specifications. Subsequently, three strategic paths are identified: profitability-led strategic path, compliance-led strategic path and intermediate strategic path. Findings - The findings indicate that the ideal strategic behavior the Islamic financial institutions have to borrow corresponds to the intermediate strategic path because it optimizes the trade-off between the two attributes under consideration. A proper development strategy of Islamic financial products should not ignore the compliance to the substance of Shari’ah and combine it simultaneously with profitability. Originality/value - The paper’s originality consists in the identification of the portfolio of Islamic financial products’ strategic positioning in the nine-zone matrix and the determination of the most suitable product development strategy.

Suggested Citation

  • Walid Mansour, 2020. "Toward new strategies of Islamic financial products development," Journal of Islamic Accounting and Business Research, Emerald Group Publishing Limited, vol. 11(9), pages 2053-2067, October.
    • Handle: RePEc:eme:jiabrp:jiabr-09-2018-0135
    DOI: 10.1108/JIABR-09-2018-0135
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    More about this item

    Keywords

    Islamic finance; Islamic financial institutions; Strategic innovation; Islamic financial products development; O31; Z12; L25; G21; G11;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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