DO THE SECT DIFFERENCES OF CUSTOMERS IN ISLA-MIC COUNTRIES INFLUENCE THE RETURNS OF ILL-GOTTEN STOCKS?
When bad firms produce things and services that aren’t accepted by all religions and the majority of the society, their cash flows are affected in a negative way. Thus, the stocks of bad firms (sin stocks) both are attracted less by investors and have a higher litigation risk. Since such risks exist...
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| Formato: | article |
| Lenguaje: | DE EN FR TR |
| Publicado: |
Fırat University
2019
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| Acceso en línea: | https://doaj.org/article/d888f763a1084631a33ef95d99408120 |
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| Sumario: | When bad firms produce things and services that aren’t accepted by all religions and the majority of the society, their cash flows are affected in a negative way. Thus, the stocks of bad firms (sin stocks) both are attracted less by investors and have a higher litigation risk. Since such risks exist, the returns expected from these sin stocks must be higher. The studies in this field show that the sin stocks have higher returns than the market. In this study, contrary to the related studies, only the stock returns of firms that deal with “bad” or “sinful” activities in the Islamic societies are analyzed. The aim of this study is to analyse the return performances of ill-gotten stocks traded at the Islamic countries’ stock markets and to analyse the effect of sect differences in the Islamic countries on ill-gotten stock returns. With this purpose in this study, the daily stock prices of 63 ill-gotten and 32 not ill-gotten stocks that are selected from eight Islamic countries’ markets between 2000 and 2014 are used as data. The results of the analyses that were made by utilizing Jensen’s Alpha show that the ill-gotten stocks brought more risk-adjusted excess returns, compared to not ill-gotten stocks and there was a statistical significant difference between the excess returns of Shia and Sunni countries’ ill-gotten stocks and this difference was in favour of the ill-gotten stocks of Sunni countries. |
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