The performance of Islamic versus conventional stocks during the COVID-19 shock: Evidence from firm-level data

Journal article

Shear, F. and Ashraf, B. (2022). The performance of Islamic versus conventional stocks during the COVID-19 shock: Evidence from firm-level data. Research in International Business and Finance. 60, p. 101622. https://doi.org/10.1016/j.ribaf.2022.101622
AuthorsShear, F. and Ashraf, B.
Abstract

In this study, we extend the recently heated debate that compares the performance of Shariah compliant equities with their non-Shariah compliant counterparts especially during the Covid-19 shock. Unlike the existing literature, which uses stock market index level data to reach controversial conclusions, we use firm-level stock returns data to find robust evidence that Shariah compliant stocks outperformed their conventional counterparts during the Covid-19 market meltdown. More specifically, we find that the prices of Shariah compliant stocks reacted to the increase in Coronavirus confirmed cases and government social distancing measures with lower negative returns than the prices of non-Shariah compliant stocks. Overall, our findings imply that Shariah compliant stocks fared better during the Covid-19 crisis episode.

KeywordsShariah-compliant; Islamic; Covid-19; social distancing measures; financial markets; Pakistan
Year2022
JournalResearch in International Business and Finance
Journal citation60, p. 101622
PublisherElsevier
ISSN1878-3384
Digital Object Identifier (DOI)https://doi.org/10.1016/j.ribaf.2022.101622
Web address (URL)https://www.sciencedirect.com/science/article/pii/S0275531922000101
Publication dates
Online08 Feb 2022
Publication process dates
Accepted01 Feb 2022
Deposited26 Oct 2023
Accepted author manuscript
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Open
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