Islamic Law and Economic Rationality in Contemporary Muslim Societies Sharia Stock Market Development

Adam Faturahman; Aswadi Jaya; Alfri Adiwijaya; Tarek Mahmoud

doi:10.34306/al-waarits.v3i2.1249

Authors

Adam Faturahman Universitas Raharja https://orcid.org/0000-0001-9727-9092
Aswadi Jaya Universitas PGRI Palembang https://orcid.org/0000-0001-5706-0977
Alfri Adiwijaya Rey Group https://orcid.org/0009-0008-4049-5286
Tarek Mahmoud Mfinitee Incorporation https://orcid.org/0009-0006-0740-8318

DOI:

https://doi.org/10.34306/al-waarits.v3i2.1249

Keywords:

Economic Rationality, Investment Intention, Islamic Law, Sharia Compliance, Sharia Stocks

Abstract

This study is motivated by the rapid development of Islamic stock markets in various Muslim majority countries, reflecting the integration of Islamic legal principles and economic rationality in modern investment activities. However, debates remain regarding how these two dimensions interact conceptually and empirically in shaping the investment behavior and preferences of contemporary Muslim investors. This study aims to analyze the role of Islamic law as a normative foundation and economic rationality as a basis for utility considerations in the development of Islamic stock markets and the enhancement of public participation. A quantitative approach with a survey design involving Muslim investors and prospective investors was employed, and the data were analyzed using SEM to examine the relationships among Islamic legal knowledge, perceived Sharia compliance, economic rationality, and investment intention in Islamic stocks. The findings indicate that Islamic legal knowledge has a significant effect on trust and perceived Sharia compliance, while economic rationality has a strong influence on investment decisions. Furthermore, both factors simultaneously increase investment intention and participation in the Islamic stock market. This study concludes that the synergy between the normative legitimacy of Islamic law and considerations of economic rationality is a key factor in promoting the growth of Islamic stock markets among contemporary Muslim communities. Therefore, market development strategies should integrate religious and educational approaches with economic incentives in a balanced manner.

Author Biographies

Adam Faturahman, Universitas Raharja

Fakultas Sains dan Teknologi

Aswadi Jaya, Universitas PGRI Palembang

Program Studi Magister Pendidikan Bahasa Inggris

Alfri Adiwijaya, Rey Group

Departemen Ekonomi dan Bisnis

Tarek Mahmoud, Mfinitee Incorporation

Departemen Agama Islam

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