We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Risk Sharing Equity-Based Islamic Finance, Macroeconomic Resilience and Significance to Oman as a New Entrant.
- Authors
Shaukat, Mughees; Raisi, Ali Al
- Abstract
With the objectives of economic diversification, sustainable development and financial inclusion, the Sultanate of Oman has set various priority themes to diversify sources of income and reduce reliance on oil revenue. In this regard, Resorting to a diverse and resilient financial setup will hold the key in providing the necessary means to meet the required ends. One of the options Oman has considered for diversification is Islamic Finance. Driven by the Quran and Sunnah, the Islamic financial system is based on Al-Bay (risk sharing) based financing. The epistemological roots of Al-bay (risk sharing) as essence of Islamic Finance can be traced from chapter 2 verse 275 of Al-Quran. In a typical risk sharing arrangement such as equity finance, parties share the risk as well as the rewards of a contract. Assets are invested in remunerative trade and production activities. The return to assets are not known at the instant assets are invested, akin to Arrow-Debreu securities. The study while specifying risk sharing based financing as the value preposition of Islamic finance, propounds that Oman has a prime opportunity to reap the desired benefits. In order to support the analytical and deductive claims, the study then utilizes the stock market data of Oman, as best proxy for risk sharing based finance, empirically demonstrating the better economic growth contribution. This is achieved by employing the wavelet DWT techniques to check the dependence/contingency between economic growth and stock market dynamics. The study concludes with some key recommendations which could ensure Oman meeting its desired objectives.
- Subjects
OMAN; ISLAMIC finance; RISK sharing; MACROECONOMICS; ORGANIZATIONAL resilience; ECONOMIC development; ECONOMIC history
- Publication
Journal of Finance, Accounting & Management, 2017, Vol 8, Issue 1, p46
- ISSN
2153-2818
- Publication type
Article