Social responsibility dimension in Islamic investment: a survey of investors' perspective in Malaysia

This paper seeks to explore the level of support investors attach to the social responsibility dimension in Islamic investment. The call to address this ‘neglected’ dimension as observed in the practice of Islamic finance is emphasized in the face of the rapidly growing Socially Responsible Investme...

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Main Author:	Barom, Mohd Nizam
Other Authors:	El-Karanshawy, Hatem A.
Format:	Book Chapter
Language:	English
Published:	Bloomsbury Qatar Foundation 2015
Subjects:	H Social Sciences (General)
Online Access:	http://irep.iium.edu.my/48826/ http://irep.iium.edu.my/48826/1/Mohd_Nizam_Barom-_Social_Responsibility_Dimension_in_Islamic_Investment.pdf

id	iium-48826
recordtype	eprints
spelling	iium-488262016-07-18T07:13:39Z http://irep.iium.edu.my/48826/ Social responsibility dimension in Islamic investment: a survey of investors' perspective in Malaysia Barom, Mohd Nizam H Social Sciences (General) This paper seeks to explore the level of support investors attach to the social responsibility dimension in Islamic investment. The call to address this ‘neglected’ dimension as observed in the practice of Islamic finance is emphasized in the face of the rapidly growing Socially Responsible Investment (SRI) industry in the West and other developed markets, where various social, ethical, and environmental considerations are central to the investment decision. The empirical analysis of the paper is based on a survey conducted on Malaysian investors of Islamic funds from three leading fund management companies. The overall result reveals that the investors in general place a hierarchy in the elements they considered important; the observance of fiqh injunctions is ranked as the most important consideration, followed by economic and social responsibility dimensions. The findings are based on both the descriptive analysis and the composite scales constructed as a result of an exploratory factor analysis, which provide statistical evidence on the nature of social responsibility dimensions being acknowledged by the respondents as part of an important underlying factor in their investment decision. Despite being overpowered by the economic aspect, the findings suggest that social responsibility criteria in investment are perceived as important by a majority of the investors, and substantial proportion of the respondents consider the dimension to be as equally or more important than the economic dimension. Further analysis reveals that the level of importance investors attached to the social responsibility dimension is determined by ethnicity, religion, level of commitment to Shariah principles in investment, income, age, level of SRI awareness, as well as gender, marital status and participation in pro-social activities. The favorable attitude of the respondents on the importance of social responsibility issues can be an encouraging precursor to the incorporation of these concerns into Islamic investment practices. Bloomsbury Qatar Foundation El-Karanshawy, Hatem A. Omar, Azmi Khan, Tariqullah Ali, Salman Syed Izhar, Hylmun Tariq, Wijdan Ginena, Karim Al Quradaghi, Bahnaz 2015 Book Chapter PeerReviewed application/pdf en http://irep.iium.edu.my/48826/1/Mohd_Nizam_Barom-_Social_Responsibility_Dimension_in_Islamic_Investment.pdf Barom, Mohd Nizam (2015) Social responsibility dimension in Islamic investment: a survey of investors' perspective in Malaysia. In: Ethics, Governance and Regulation in Islamic Finance (Volume 4). Bloomsbury Qatar Foundation, Doha, Qatar, pp. 91-104. ISBN 978-9927-118-24-1
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	H Social Sciences (General)
spellingShingle	H Social Sciences (General) Barom, Mohd Nizam Social responsibility dimension in Islamic investment: a survey of investors' perspective in Malaysia
description	This paper seeks to explore the level of support investors attach to the social responsibility dimension in Islamic investment. The call to address this ‘neglected’ dimension as observed in the practice of Islamic finance is emphasized in the face of the rapidly growing Socially Responsible Investment (SRI) industry in the West and other developed markets, where various social, ethical, and environmental considerations are central to the investment decision. The empirical analysis of the paper is based on a survey conducted on Malaysian investors of Islamic funds from three leading fund management companies. The overall result reveals that the investors in general place a hierarchy in the elements they considered important; the observance of fiqh injunctions is ranked as the most important consideration, followed by economic and social responsibility dimensions. The findings are based on both the descriptive analysis and the composite scales constructed as a result of an exploratory factor analysis, which provide statistical evidence on the nature of social responsibility dimensions being acknowledged by the respondents as part of an important underlying factor in their investment decision. Despite being overpowered by the economic aspect, the findings suggest that social responsibility criteria in investment are perceived as important by a majority of the investors, and substantial proportion of the respondents consider the dimension to be as equally or more important than the economic dimension. Further analysis reveals that the level of importance investors attached to the social responsibility dimension is determined by ethnicity, religion, level of commitment to Shariah principles in investment, income, age, level of SRI awareness, as well as gender, marital status and participation in pro-social activities. The favorable attitude of the respondents on the importance of social responsibility issues can be an encouraging precursor to the incorporation of these concerns into Islamic investment practices.
author2	El-Karanshawy, Hatem A.
author_facet	El-Karanshawy, Hatem A. Barom, Mohd Nizam
format	Book Chapter
author	Barom, Mohd Nizam
author_sort	Barom, Mohd Nizam
title	Social responsibility dimension in Islamic investment: a survey of investors' perspective in Malaysia
title_short	Social responsibility dimension in Islamic investment: a survey of investors' perspective in Malaysia
title_full	Social responsibility dimension in Islamic investment: a survey of investors' perspective in Malaysia
title_fullStr	Social responsibility dimension in Islamic investment: a survey of investors' perspective in Malaysia
title_full_unstemmed	Social responsibility dimension in Islamic investment: a survey of investors' perspective in Malaysia
title_sort	social responsibility dimension in islamic investment: a survey of investors' perspective in malaysia
publisher	Bloomsbury Qatar Foundation
publishDate	2015
url	http://irep.iium.edu.my/48826/ http://irep.iium.edu.my/48826/1/Mohd_Nizam_Barom-_Social_Responsibility_Dimension_in_Islamic_Investment.pdf
first_indexed	2023-09-18T21:09:10Z
last_indexed	2023-09-18T21:09:10Z
_version_	1777411136808812544

Social responsibility dimension in Islamic investment: a survey of investors' perspective in Malaysia

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