The Intersection of Shariah Compliance and Digital Innovation (Part-2)

Shariah compliance can send positive signals about a company’s risk management, long-term focus, and governance. It prohibits excessive risk-taking practices, potentially appealing to risk-averse investors during a pandemic. Additionally, Shariah principles often emphasize ethical business practices and social responsibility, suggesting a long-term perspective that could lead to sustainable growth even during economic downturns.

The study proposes that Shariah compliance improves stock market performance during crises. This is due to lower risk profiles, a dedicated investor base, and a focus on long-term sustainability.