Islamic mutual funds' financial performance and international investment style: evidence from 20 countries

We pursue the first large-scale investigation of a strongly growing mutual fund type: Islamic funds. Based on an unexplored, survivorship bias-adjusted data set, we analyse the financial performance and investment style of 265 Islamic equity funds from 20 countries. As Islamic funds often have diverse investment regions, we develop a (conditional) three-level Carhart model to simultaneously control for exposure to different national, regional and global equity markets and investment styles. Consistent with recent evidence for conventional funds, we find Islamic funds to display superior learning in more developed Islamic financial markets. While Islamic funds from these markets are competitive to international equity benchmarks, funds from especially Western nations with less Islamic assets tend to significantly underperform. Islamic funds’ investment style is somewhat tilted towards growth stocks. Funds from predominantly Muslim economies also show a clear small cap preference. These results are consistent over time and robust to time varying market exposures and capital market restrictions.

Educating integrated catalysts: transforming business schools toward ethics and sustainability

Joining the sharpening critique of conventional University-based business school education, we argue that educating integrated catalysts is necessary to meet current sustainability challenges. The key feature of moving toward the integration required at the individual level is focusing on developing students' capacity for moral and cognitive maturity. Practically, this makes the practice of genuine dialogue focal as core interpersonal method for educating management students. In supporting such education, business schools must however first transform themselves. Acting as transformative social enterprises, they can demonstrate being a part in critically questioning and improving the impact and relevance of management on the flourishing of wider society and the practice of an ethically oriented economy. We offer practical suggestions and implications for future business education reform.

How Islamic is al-Qaeda? The politics of Pan-Islam and the challenge of modernisation

This article investigates the contested ideology of al-Qaeda through an analysis of Osama bin Ladin’s writings and public statements issued between 1994 and 2011, set in relation to the development of Islamic thought and changing socio-political realities in the late nineteenth and twentieth centuries. Challenging popular conceptions of Wahhabism and the “Salafi jihad”, it reveals an idealistic, Pan-Islamic sentiment at the core of his messages that is not based on the main schools of Islamic theology, but is the result of a crisis of meaning of Islam in the modern world. Both before and after the death of al-Qaeda’s iconic leader, the continuing process of religious, political and intellectual fragmentation of the Muslim world has led to bin Ladin’s vision for unity being replaced by local factions and individuals pursuing their own agendas in the name of al-Qaeda and Islam.

Market research and the ethics of big data

The term 'big data' has recently emerged to describe a range of technological and commercial trends enabling the storage and analysis of huge amounts of customer data, such as that generated by social networks and mobile devices. Much of the commercial promise of big data is in the ability to generate valuable insights from collecting new types and volumes of data in ways that were not previously economically viable. At the same time a number of questions have been raised about the implications for individual privacy. This paper explores key perspectives underlying the emergence of big data, and considers both the opportunities and ethical challenges raised for market research.

The four pillars of corporate responsibility: ethics, leadership, personal responsibility and trust

Purpose – This paper aims to examine how to further embed CSR thinking and practice into corporations, particularly in emerging markets, by reviewing and drawing similarities between key issues faced by all senior managers, namely ethics, leadership, personal responsibility and trust. Design/methodology/approach – This paper presents a conceptual exploration of global CSR practices using social psychology and overlays this concept with strategic and institutional theory in order to encourage new ways of thinking about CSR adoption, especially in emerging markets. Findings – The paper reveals the importance of shareholder needs on global corporate decision making and applies alternative conceptual models to help businesses to devise better CSR practices and individuals to align their actions to their own values. Originality/value – This paper strongly argues for blending different theoretical foundations from the management and organization literature in order to draw comparisons between current global CSR practice and the potential for its further adoption in emerging markets.

Ethics of care in supporting disabled forced migrants: interactions with professionals and ethical dilemmas in health and social care in the South-East of England

This article explores the interactions between disabled forced migrants with care needs and professionals and the restrictive legal, policy and practice context that health and social care professionals have to confront, based on the findings of a qualitative study with 45 participants in the South-East of England. In-depth interviews were conducted with 15 forced migrants who had diverse impairments and chronic illnesses (8 women and 7 men), 13 family caregivers and 17 support workers and strategic professionals working in social care and the third sector in Slough, Reading and London. The legal status of forced migrants significantly affects their entitlements to health and social care provision, resulting in prolonged periods of destitution for many families. National asylum support policies, difficult working relationships with UK Border Agency, higher eligibility thresholds and reduced social care budgets of local authorities were identified as significant barriers in responding to the support needs of disabled forced migrants and family caregivers. In this context, social workers experienced considerable ethical dilemmas. The research raises profound questions about the potential and limitations of health and social care policies, provision, and practice as means of protection and support in fulfilling the human rights of forced migrants with care needs.

Corruption and individual ethics: insights from a public procurement auction

This article proposes an auction model where two firms compete for obtaining the license for a public project and an auctioneer acting as a public official representing the political power, decides the winner of the contest. Players as firms face a social dilemma in the sense that the higher is the bribe offered, the higher would be the willingness of a pure monetary maximizer public official to give her the license. However, it implies inducing a cost of reducing all players’ payoffs as far as our model includes an endogenous externality, which depends on bribe. All players’ payoffs decrease with the bribe (and increase with higher quality). We find that the presence of bribe aversion in either the officials’ or the firms’ utility function shifts equilibrium towards more pro-social behavior. When the quality and bribe-bid strategy space is discrete, multiple equilibria emerge including more pro-social bids than would be predicted under a continuous strategy space.

Bioethics through the telescope: institutional ethics in the NHS

The article argues for a broader conception of bioethics. The principles that dominate current thinking are generally individualistic and do not represent the real world inhabited by patients, doctors, hospitals and the NHS as a whole. Rather than focus almost exclusively on the micro-end of the analytical spectrum, bioethics, and medical lawyers in particular, should take the institutional dimensions of health and health care more seriously, ie use a telescope to understand the dynamics that drive the subject, not just a microscope.

Ethics education in management accounting studies: evidence from business schools in Ghana

Management accounting in recent times, and perhaps rightly so, has begun to gain recognition as a profession separate and complimentary to financial accounting. Evidence exists to suggest that management accountants are exposed to a unique set of ethical challenges within industry and that a significant high number of management accountants have engaged in unethical practices in performing their jobs. For the accounting profession as a whole, the growing number of corporate failures has created a credibility crisis that requires a deliberate intervention to mitigate. If this is not addressed sooner, the accounting profession stands the risk of losing relevance. Scholarship on ethical issues in accounting practice have either focused mostly on financial accounting or have sought to combine ethical issues for financial and management accounting. Various arguments have been made in recent times of the need to treat ethical issues in behavioural studies as context-specific and therefore separate ethical considerations in management accounting from financial accounting. This study adopts an approach, following various literature, that effective ethics education can help practitioners deal appropriately with ethical issues at the work place, and explores students’ and faculty members’perceptions on current practices in ethics education. As expected, faculty and students differ significantly on a wide range of issues on ethics education in management accounting. Based on the insights provided from this study, appropriate recommendations have been made to improve ethics education in management accounting.

A review of Islamic mutual funds’ financial performance and investment style in Muslim and non-Muslim countries

Islamic finance has grown beyond its reputation of providing small-scale banking options and now provides investment and financing options for complex large-scale commercial transactions. Islamic investments are one area that has attracted the attention of investors due to its performance, especially during the economic downturn. The Shari’ah compliance nature of Islamic funds provides an opportunity for those Muslim investors to be part of the global investment sector who have previously been reluctant to invest in conventional mutual funds. The fact that the funds’ managers are prohibited from investing in activities such as weapons production, alcohol production and interest-bearing finance operations, makes Islamic mutual funds also attractive for those Non-Muslim investors who wish to invest ethically. Today there are hundreds of Islamic equity indices offered by Dow Jones, FTSE, MSCI and S&P. Despite the growing importance of Islamic funds, there have been limited studies exploring the performance of Islamic funds worldwide. Due to very limited data sets and not too rigorous analytical methods, these existent studies have neither investigated Islamic funds’ financial performance in noticeable detail nor analysed the investment style of more than six funds. For instance, relevant questions such as the financial performance of Islamic mutual funds’ beyond their investment styles or a difference in performance between funds from Muslim and non-Muslim countries have nearly not been investigated at all. Very recently, a study by Hoepner, Rammal and Rezec (2011) analysed the financial performance and investment style of 262 Islamic equity funds from 20 countries in five regions (Africa, Asia-Pacific, Europe, Gulf Cooperative Council-GCC, and North America). As comparison, previous studies did not even analyse 60 funds. Hoepner et al.’s study sampled a period of two decades and was therefore able to test the performance of the funds during economic booms as well as economic downturns. The findings of the study provide new insights into the performance of Islamic mutual funds in Muslim and Western markets and during financial crisis.