Mush̄ārakah and Mudārabah Instruments: Assessing their Characteristics

Authors

  • Naeem Chowdhury Senior Fellow, Bangladesh Institute of Development Studies, Bangladesh

DOI:

https://doi.org/10.32890/ijbf2013.10.2.2

Keywords:

Islamic finance, mushārakah, mudārabah, Rothchild-Stiglitz framework, heterogeneity

Abstract

Until very recently, equity financing is more in line with the spirit of Islam as compared with debt financing. As such, mushaÌ„rakah and mudaÌ„rabah are the preferred modes for Islamic investors. It is therefore a matter of a concern that even after four decades after Islamic finance captured the attention of investors around the globe, these two purest genres account only for a small percentage of Islamic financial industry. The paper examines more searchingly for the reasons why mushaÌ„rakah and mudaÌ„rabah occupy such insignificant place among Islamic financial products. This paper offers an analytical insight.

 

References

Belal, A. R. Abdelsalam, O., & Nizamee, S. S. (2010). A longitudinal case study of social reporting in Islami Bank Bangladesh Limited (IBBL). Birmingham: Aston Business School.

Dar, H. A. (2007). Incentive compatibility of islamic financing. In M. Kabir Hassan and Mervin K. Lewis (Eds). Handbook of Islamic banking. Cheltenham, UK and Northampton, MA: Edward Elgar.

Cutler, D. M., & Zeckhauser, R. J. (1998). Adverse selection in health insurance. In Alan A. Garber (Ed.), Frontiers in health policy research vol. 1. Cambridge: MIT Press.

Goud, B. (2012). Should Islamic banks use muḍārabah and mushārakah? Retrieved from http://investhalal.blogspot.ca

Hassan, M. K., & Lewis, M. K. (Eds). (2007). Handbook of Islamic banking. Cheltenham, UK and Northampton, MA: Edward Elgar.

Iqbal, M., Ahmed, A., & Khan, T. (1998). Challenges facing Islamic banking. Jeddah: Islamic Research and Training Institute.

Iqbal, M., & Molyneux, P. (2005). Thirty years of Islamic banking: History, performance and prospects. Houndmills, UK and New York: Palgrave McMillan.

Ray, D. (1998). Development economics. Princeton: Princeton University Press.

Rosenberg, N. (1973). Perspectives on technology. New York: Cambridge University Press.

Rothschild, M., & Stiglitz, J. E. (1976). Equilibrium in competitive insurance markets: An essay on the economics of imperfect information. Quarterly Journal of Economics, 90(2): 629-649.

Downloads

Published

01-08-2013

Issue

Vol. 10 No. 2 (2013): International Journal of Banking and Finance (IJBF) Vol. 10, No.2, 2013

Section

Articles

How to Cite

Chowdhury, N. (2013). Mush̄ārakah and Mudārabah Instruments: Assessing their Characteristics. International Journal of Banking and Finance, 10(2), 25-48. https://doi.org/10.32890/ijbf2013.10.2.2

Research impact

Harvested 2026-09-07
0 citations recorded so far

Counts differ between services because each indexes a different body of literature. None of them is the whole picture.

Identifiers DOI 10.32890/ijbf2013.10.2.2 OpenAlex W6983605872