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Islamic finance in frontier financial markets: An alternative or a complement to conventional finance?
[La finance islamique dans les marchés financiers frontières : Une alternative ou un complément à la finance conventionnelle ?]

Author

Listed:
  • Ayoub Rabhi

    (CERAPE - Laboratoire de Coordination des Études et des Recherches en Analyse et Prévisions Économiques - USMBA - Université Sidi Mohamed Ben Abdellah)

  • Amina Haoudi

    (CERAPE - Laboratoire de Coordination des Études et des Recherches en Analyse et Prévisions Économiques - USMBA - Université Sidi Mohamed Ben Abdellah)

Abstract

Considering the multiple failures of conventional finance to fulfill its ultimate mission of promoting economic activity, there has been a heated debate over the last few years to revise and renovate the international financial system in order to improve risk control and create alternative models of finance. In this framework, Islamic finance known as ethical finance is currently considered solid, efficient and a less risky in the financial markets. The objective of our paper is to empirically explore the efficient market hypothesis through the study of Islamic stock indexes and diversification opportunities in comparison with their equivalents of conventional finance in the context of frontier markets by using time series analysis. The choice of this market category appeared relevant since most theoretical and empirical academic studies focus on testing the efficient market hypothesis only for developed and emerging markets.

Suggested Citation

  • Ayoub Rabhi & Amina Haoudi, 2017. "Islamic finance in frontier financial markets: An alternative or a complement to conventional finance? [La finance islamique dans les marchés financiers frontières : Une alternative ou un complémen," Post-Print hal-02432619, HAL.
    • Handle: RePEc:hal:journl:hal-02432619
    Note: View the original document on HAL open archive server: https://hal.science/hal-02432619
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    References listed on IDEAS

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    1. Fama, Eugene F, 1970. "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance, American Finance Association, vol. 25(2), pages 383-417, May.
    2. Abdelbari El Khamlichi & Kabir Sarkar Humayun & Mohamed Arouri & Frédéric Teulon, 2014. "Are Islamic equity indices more efficient than their conventional counterparts ? Evidence from major global index families," Working Papers 2014-91, Department of Research, Ipag Business School.
    3. Granger, Clive W J, 1986. "Developments in the Study of Cointegrated Economic Variables," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 48(3), pages 213-228, August.
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