Prestige signals in IPOs: A comparative analysis of Sharia-Compliant vs. Non-Sharia-Compliant offerings

Albada, A., Al Qatiti, K, Chukari, N. A., Nizar, N. and Karbhari, Yusuf ORCID: https://orcid.org/0000-0003-4513-0928 2025. Prestige signals in IPOs: A comparative analysis of Sharia-Compliant vs. Non-Sharia-Compliant offerings. Taghizadeh-Hesary, Farhad, Mohd Thas Thaker, Hassanudin, Ishaq Bhatti, M. and Allah Pitchay, Anwar, eds. Islamic Financial Markets and Institutions: Challenges, Financial Stability, and Inclusivity, Contributions to Economics, Singapore: Springer, pp. 317-334. (10.1007/978-981-96-8650-6_15)

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Abstract

The aims of this empirical study are twofold. First, we investigate whether religiously motivated Sharia-compliant IPOs influence the initial returns of IPOs under the signalling theory assumptions. Second, we examine the influencing effect of prestige signals on IPO initial returns for both Sharia- and non-Sharia-compliant IPOs. Our study sample covers the period from January 2000 to December 2018 and includes a total of 453 IPOs, of which 267 IPOs operate under Sharia-compliant status. The results find compelling evidence that Sharia-compliant status does not significantly influence initial returns, but board reputation and underwriter reputation does impact initial returns under both the Sharia sample and non-Sharia sample, respectively. In addition, Sharia-compliant IPOs are predominantly driven by demand, supply, offer price, and listing board, while non-Sharia IPOs are motivated by demand, supply, offer price, and risk.

Item Type:	Book Section
Date Type:	Publication
Status:	Published
Schools:	Schools > Business (Including Economics)
Publisher:	Springer
ISBN:	978-981-96-8649-0
Last Modified:	04 Sep 2025 10:45
URI:	https://orca.cardiff.ac.uk/id/eprint/180857

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