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Islamic finance and market segmentation: implications for the cost of capital
journal contribution
posted on 2023-06-08, 11:02 authored by Bruce Hearn, Jenifer Piesse, Roger StrangeRoger StrangeThis paper considers the impact of full Islamic shari’ya compliance on developing stock exchanges in their effective provision of development capital. Evidence from a unique study focussing on the Sudan telecommunications company and its listings on the Khartoum as well as Arabian Gulf stock exchanges reveals that costs of capital are considerably higher in the former than latter markets. While there are firm governance benefits arising from Islamic finance monitoring costs are substantial and the banking system is better placed to administer financing arrangements. Larger firms are better placed to circumvent this segmentation through cross-listing on regional exchanges.
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Publication status
- Published
File Version
- Published version
Journal
International Business ReviewISSN
0969-5931Publisher
ElsevierExternal DOI
Issue
1Volume
12Page range
102-113Department affiliated with
- Business and Management Publications
Full text available
- No
Peer reviewed?
- Yes
Legacy Posted Date
2012-04-23First Compliant Deposit (FCD) Date
2012-02-24Usage metrics
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