Journal of Islamic Monetary Economics and Finance (JIMF)
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Shari’ah Analytics of Arabic Currency Terms and Implications for Cryptocurrency
No full textThis study introduces Sharīʿah analytics, a novel methodological framework leveraging machine learning and big data analytics, to systematically analyze classical Islamic jurisprudential texts (furūʿ al-fiqh kitābs), and further assesses cryptocurrencies against the Islamic monetary principles. Sharīʿah analytics is done via computationally processing 55 texts across four Sunni and one Shia legal tradition, examining Arabic currency-related terms and their fundamentals to explain whether cryptocurrencies align with pre-modern juristic definitions rooted in physicality, standardization, and regional acceptance. Findings reveal that cryptocurrencies inherently diverge from classical criteria, e.g., weight-based valuation, intrinsic material purity, and communal consensus, interpreting them non-compliant with traditional Islamic currency frameworks. This approach advances Islamic monetary scholarship, offering a data-driven lens to reconcile ethical monetary principles with emerging digital economies. The study fills a gap in existing literature by systematically contextualizing cryptocurrency debates within primary juristic sources rather than relying on speculative analogies or fragmented scholarly opinions.
ACKNOWLEDGMENT
Fahmi Ali Hudaefi would like to thank Dr Haula Noor (Universitas Islam Internasional Indonesia) for introducing him to Islamicate Digital Humanities, which grounds the idea of Shariah analytics.
This research received funding from the Deanship of Scientific Research, Vice Presidency for Graduate Studies and Scientific Research, King Faisal University, Saudi Arabia [KFU252890]. In addition, this research also received funding from Majelis Pendidikan Tinggi Penelitian dan Pengembangan (Diktilitbang) Muhammadiyah Risetmu Penelitian Reguler Batch IX [0259.1043/I.3/D/2025].
Analyzing the Impact of Systems, Human Capital, and Anti-Bribery Practices on Business Satisfaction: The Case of Halal Certification in Indonesia
No full textMaintaining good service quality in halal certification procedures has become crucial as the demand for halal products grows globally. Focusing on Indonesia, this study investigates the relationship between firm satisfaction with halal certification services and support systems, human capital, and anti-bribery practices. The study uses Structural Equation Modelling (SEM) and the SERVQUAL framework to analyze survey data from 2,367 businesses with halal certifications in 32 Indonesian provinces. The aim is to reveal the determinants of satisfaction and the impact of institutional performance on service delivery. The findings demonstrate that employees with responsiveness, empathy, assurance, and good communication significantly improve not only the perceived quality of services but also the efficacy of anti-bribery initiatives. Meanwhile, support systems that enhance employee performance and customer satisfaction include sufficient equipment, transparent quality control, and complaint procedures. These findings highlight that integrity and professionalism are just as important as technical systems to make certification successful. This study provides insights for certifying organizations and legislators in formulating strategies to boost the competitiveness of Indonesia's halal market, increase efficiency, and build confidence. Strengthening institutional capacity and reducing bureaucratic barriers can help ensure a more reliable and business-friendly certification ecosystem.
ACKNOWLEDGMENT
This work was supported by Airlangga University under the Research Scheme “Penelitian Unggulan Halal” (Grant Number: 63/ST/UN3. HALAL/PT.March 01, 2024)
Resilience of Islamic Stock Indexes to Economic Uncertainty: Quantile-on-Quantile Insights
No full textThis paper examines the impact of country specific EPU on Islamic stock indexes of developed, emerging, and frontier markets using Quantile on Quantile Regression (QQR). For robustness, we employ causality in mean and variance. We gather Islamic stock indexes and country specific EPU data from nine markets, classified as developed, emerging, and frontier, from January 2010 to November 2024. Our findings demonstrate that EPU exhibits predictive power for Islamic stock indexes across different quantiles (lower to higher). Additionally, the effect of EPU on respective Islamic stock indexes is asymmetric. Finally, we also show that country specific EPU negatively (positively) impacts Islamic stocks during bearish (bullish) periods of economic activity. These findings add to our understanding of and contribute to the limited literature on Islamic stock markets, highlighting their unique characteristics and responses to policy-driven uncertainties
Reassessing Attention to Fintech: Spillover Effects on Conventional and Islamic Financial Stocks
No full textThis study applies an integrated Quantile Vector Autoregression and Quantile Regression to examine spillover dynamics in the FinTech context. By analysing the period from 2019 to 2024, which includes significant events such as the COVID-19 pandemic, the 2023 banking crisis, and notable regulatory developments, the study captures nonlinear and asymmetric relationships between FinTech attention (ATFIN), FinTech stock performance (FINTS), and financial stock returns, for both conventional (FINS) and Islamic (IFINS) stocks. The findings suggest that ATFIN tends to respond to market movements during normal and bearish conditions, while it becomes a net transmitter during bullish periods, amplifying investor sentiment and speculative activity. Conventional financial stocks consistently emerge as strong transmitters of market spillovers, whereas Islamic financial stocks function mainly as receivers, especially during market upswings, indicating their potential role as a stabilizing force. These results contribute to the literature on behavioural finance and financial contagion by highlighting the asymmetric behaviour of FinTech attention across market regimes. The study also offers practical implications for regulators and institutional investors. Monitoring ATFIN may help identify speculative trends, while Islamic FinTech models could appeal to more risk-averse investment profiles
Optimizing Islamic Portfolio Formation Using Mathematical and Shariah Approaches
No full textThis paper introduces the Best Sharia-based Capital Asset Pricing Model (BSCAPM), a mathematical modification of the BCAPM model integrating Islamic finance principles. The study focuses on optimizing the beta in the model, incorporating factors aligned with Islamic principles, such as zakat and purification, while excluding short selling. Using data from the Jakarta Islamic Index (JII) from June 2020 to May 2024, the BSCAPM portfolio outperforms the BCAPM portfolio in terms of the Sharpe ratio. The results suggest that BSCAPM could serve as an effective alternative for modeling in Islamic investments, providing Muslim investors with a Shariah-compliant, optimal portfolio formation model. The research contributes to the underexplored domain of portfolio selection modeling in the Islamic sector, enriching references on asset pricing of Shariah portfolios, particularly in the Indonesian Shariah stock market
The Role of Islamic Economics and Finance in the Era of Digital Transformation, Sustainable Growth and Geopolitical Uncertainty
No full textThis paper is based on a keynote speech delivered at The 11th International Islamic Monetary Economics and Finance Conference (11th IIMEFC). As a keynote contribution, this article does not include a formal abstract
Consumer Insights on Halal Certification: Awareness, Perception, and Visibility as Key Determinants of Purchase Behaviour
No full textThis study investigates consumer insights on halal certification in Malaysia by examining awareness, perception, visibility, trust, and purchase behaviour, with religious belief as a moderator. Using a non-probability purposive sampling method, 801 valid responses were collected and analysed with Partial Least Squares Structural Equation Modeling (PLS-SEM). The results show that perception and awareness significantly influence trust, while visibility has no significant effect. Trust and religious belief strongly predict purchase behaviour, and religious belief also moderates the relationship between trust and purchase. It should be noted, however, that the sample disproportionately represents Indigenous Sabah respondents, while Malay respondents—the national majority—are underrepresented. Therefore, the findings are context-specific and not generalisable to the entire Malaysian population. Despite this limitation, the study provides useful insights into consumer trust in halal certification and offers practical recommendations for practitioners, regulators, and policymakers, as well as theoretical contributions for future research.
ACKNOWLEDGMENT
This paper was supported by the Geran Penyelidikan Dana Kluster (DKP) Fasa 1/2023 (DKP0020). The authors gratefully acknowledge the financial support provided through this grant, which has facilitated the implementation of this research. The authors also sincerely thank the journal’s editors and reviewers for their valuable comments and suggestions that helped improve the quality of this paper
Beyond Prohibitions: Unveiling the Hidden Dynamics of Islamic Economics and Finance
No full textDespite theoretical differences between conventional and Islamic finance, critics argue that Islamic finance remains operationally similar to conventional finance. This apparent convergence in substance has led to growing disillusionment among stakeholders, prompting calls for a reassessment of the objectives and principles underlying Islamic finance. The objective of this study is twofold: first, to conduct a comprehensive comparative analysis between Islamic finance and conventional finance, and second, to explore the hidden dynamics of Islamic economics and finance by investigating its special theoretical features. By conducting intensive library research and reviewing main studies in Islamic economics and Finance, this study examines the salient features of Islamic economics and finance. The study identifies several hidden dynamics, including the role of money as a medium of exchange, prohibition of debt securitization, financing real sector development, the role of Islamic finance in infrastructure development, and the impact of Shariah screening mechanisms on stock market crashes. By examining the salient features of Islamic Economics and Finance, this research aims to provide theoretical insights that will contribute to academic literature, while also guiding regulators and industry practitioners in innovating financial products that more authentically embody the ethical spirit of Islamic finance
The Shariah-Compliant Risk Factor and Distress Risk: Evidence from the U.S. Stocks
No full textThis paper tests the Shariah-compliant-augmented three-factor model (TFM) in the U.S. stock market from July 2005 to June 2024. In particular, we investigate whether the Shariah Compliant (SC) risk factor, measured as the difference in returns between the portfolio of non-Shariah-compliant (NSC) firms and that of SC firms, constitutes a systematic source of risk able to explain financial distress. We find that the SC risk factor is a major determining factor in pricing of stock portfolios classified by size, book-to-market and Shariah compliance, along with those of distressed and non-distressed firms. Additionally, we point out that the SC risk factor explains the cross-section of stock returns even when other financial distress risk factors are considered, suggesting that it contains significant distress-related information. Finally, we show that this risk factor is significantly related to innovations in term spread, which is consistent with Merton’s ICAPM explanation. Overall, the findings indicate that the SC factor represents a systematic, undiversifiable distress risk factor. These results have important implications for asset management using SC stocks, supporting an SC-augmented TFM to fairly value assets and suggesting that SC investment may provide protection against financial distress
Consumers' Behavioural Intention to Adopt Shari’ah-Compliant Digital Gold Platform in Malaysia: Extension of UTAUT Model
Full text linkThe advancement of technology has resulted in the emergence of digital platforms, such as digital gold platforms, as alternative channels for retail investment. In this study, we investigate factors that influence consumers’ behavioural intentions towards a Shari’ah-compliant digital gold platform in Malaysia. The study incorporates trust and Shari’ah-compliance as constructs in the extended UTAUT model. Gathering data from 130 respondents and applying SmartPLS 4.0 for data analysis, the study documents the significance of performance expectancy, effort expectancy, trust, and Shari’ah-compliance. Meanwhile, facilitating conditions and social influence turn out to be insignificant. The study notes that feeling safe, secure, and transparent as well as having Shari’ah-compliant features are crucial factors that influence consumer intention to adopt the Shari’ah-compliant digital gold platform in Malaysia. It is also critical to be aware of the services provided by Shari’ah-compliant providers and financial institutions by utilising the social network within the Shari’ah-compliant finance sphere.
ACKNOWLEDGEMENT
The second author (Nik Hadiyan Nik Azman) would like to Acknowledge “Ministry of Higher Education Malaysia for Fundamental Research Grant Scheme with Project Code: FRGS/1/2021/SS01/USM/03/1”