Spillover Effect in Islamic and Conventional Fund Family: Evidence from Emerging Countries-Reference-Cited by-同舟云学术

Spillover Effect in Islamic and Conventional Fund Family: Evidence from Emerging Countries

Published:2023-05-15 Issue: Volume:20 Page:1042-1058
ISSN:2224-2899
Container-title:WSEAS TRANSACTIONS ON BUSINESS AND ECONOMICS
language:en
Short-container-title:

Author:

Mustafa Jamileh Ali¹,Atta Anas Ahmad Bani¹,Ahmad Ahmad Yahiya Bani¹,Shehadeh Maha²,Agustina Ria³

Affiliation:

1. Financial and Accounting Science Department, Faculty of Business, Middle East University JORDAN

2. Finance and Banking Sciences Department, Applied Sciences Privet University, JORDAN

3. Management Zakat and Waqf Department, Faculty of Business, Stata Islamic University Of Raden Fatah, INDONESIA

Abstract

This study examines star and poor funds belonging to fund families in Saudi Arabia, Pakistan, Indonesia, and Malaysia from 2007–2020. The analysis is divided into two parts. The first part examines how Islamic and conventional star and poor funds contribute to the overall flow of their respective fund families. Second, it examines and compares the spillover effect of Islamic and conventional star (poor) funds to peer funds. These effects are estimated using pooled fixed- and random-effects regression analysis. Overall, we find that having at least one-star fund leads to new money growth for families, whereas there is no effect from having at least one poor fund. The presence of star (poor) funds has mixed effects on new money flow to peer funds. To be precise, the spillover effect is found only in the presence of Islamic star funds. These findings have important implications for investors because they mainly choose funds based on the reputation of the fund family to which they belong, not on their fundamentals. This is especially pronounced in emerging markets, where funds are young and have short track records, and so they provide little information to investors to make sound investment decisions.

Publisher

World Scientific and Engineering Academy and Society (WSEAS)

Subject

Economics and Econometrics,Finance,Business and International Management

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