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An empirical analysis of stock market participation: from an Islamic perspective

S.M. Riha Parvin (Institute of Management and Commerce, Srinivas University, Mangaluru, India and YEN-REFINED, YIASCM, Yenepoya (Deemed to be University), Mangalore, India)
Niyaz Panakaje (YEN-REFINED, YIASCM, Yenepoya (Deemed to be University), Mangalore, India)
Niha Sheikh (YEN-REFINED, YIASCM, Yenepoya (Deemed to be University), Mangalore, India)
Mahammad Thauseef P. (School of Commerce, Finance and Accountancy, St Aloysius (Deemed to be University), Mangalore, India)
Shakira Irfana (YEN-REFINED, YIASCM, Yenepoya (Deemed to be University), Mangalore, India)
Abhinandan Kulal (YEN-REFINED, YIASCM, Yenepoya (Deemed to be University), Mangalore, India)
Musla V. (Department of Commerce and Management Studies, Farook College (Autonomous), Kozhikode, India)
Mahammad Shahid (YEN-REFINED, YIASCM, Yenepoya (Deemed to be University), Mangalore, India)
Abdul Basith N.M. (Department of Commerce and Management Studies, Farook College (Autonomous), Kozhikode, India)
Mohammad Nihal (Department of MBA, YIASCM, Yenepoya (Deemed to be University), Mangalore, India)

International Journal of Islamic and Middle Eastern Finance and Management

ISSN: 1753-8394

Article publication date: 26 September 2024

95

Abstract

Purpose

In the verge of assessing Muslims’ participation in stock market, present study delved into evaluating the influence of Islamic religiosity (IR) on Muslim investor’s financial engagement factors with respect to stock market (i.e. financial literacy [FL], Islamic financial literacy [IFL], behavioural factors [BF], Shariah compliance [SC], technology adoption [TA] and institutional support [IS]), stock market participation (SMP) and financial well-being (FWB). Further, this study aims to examine the mediating role of IFL, TA and SMP and moderating role of IS.

Design/methodology/approach

Using a mixed-methods approach, a structured survey questionnaire was administered and responses have been collected from 319 Muslim investors from South India using stratified random sampling. Further, data was analysed using SPSS 20.0 and AMOS 20.0 by implementing one-way ANOVA, measurement model and structural equation model to assess the differences, mediating and moderating roles.

Findings

In this study, it is discovered that IR significantly impacts Muslim investor’s financial engagement factors, SMP and FWB. Further, it is explored that IFL accelerates the impact of FL and SC on SMP. The results also demonstrated the intervening role of TA in enhancing SMP through BF and the mediating role of SMP among Muslim investors with strong IR to attain and enjoy FWB. Interestingly, our study also argued that when the IS is more, the effect of IR on SMP is high.

Research limitations/implications

Geographical boundaries are restricted to India, where the study proposes future studies in Islamic countries to better understand the religious belief system of the investors, as SC may vary in different countries.

Practical implications

In accordance with the results, it is recommended that the regulatory bodies and institutions intervene, support and incorporate IFL and also provide user-friendly Tec platforms to monitor and filter stocks and financial products for SC.

Social implications

The present study intends to tackle the misconception of Islamic values with respect to participating in the stock market and recommends to undertake policy and regulatory framework to ensure the inclusive development of this community.

Originality/value

To the best of the authors’ knowledge, no studies so far have pondered on the mediating role of SMP in enhancing the effectiveness of IR on their FWB. Further, this study collectively examines the influence of IR on various financial engagement factors affecting SMP leading to FWB.

Keywords

Citation

Parvin, S.M.R., Panakaje, N., Sheikh, N., P., M.T., Irfana, S., Kulal, A., V., M., Shahid, M., N.M., A.B. and Nihal, M. (2024), "An empirical analysis of stock market participation: from an Islamic perspective", International Journal of Islamic and Middle Eastern Finance and Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IMEFM-06-2024-0287

Publisher

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Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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