Contribution of mathematical models to Islamic economic theory: a survey

Abdullahi, Shafiu Ibrahim

doi:10.1108/ijoes-09-2017-0129

Cited by 8 publications

(8 citation statements)

References 23 publications

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“…Most of the development in the application demonstrates that the traditional model is implemented on assets subject to Shariah principles. Studies on model development in Islamic investments have also been carried out by Hassan, Aliyu, Saiti, &Halim (2020) andAbdullahi (2018). This current study provides related works on developing models for asset valuation or portfolio construction with Shariah principles.…”

Section: Asset Pricing and Portfolio Modelingmentioning

confidence: 99%

Integrating Zakat and Purification in a Modified Black–Litterman Model for Shariah-Compliant Stock Portfolios

Subekti¹,

Abdurakhman²,

Rosadi³

et al. 2022

5002

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Many articles demonstrate the advantages of applying Shariah principles in economic and financial activities, which motivates model development for Shariah investment. The development of the capital asset pricing model (CAPM) and mean-variance (MV) for Shariah portfolios shows various efforts within a Shariah framework. But the MV model has diversification weaknesses, and the Black–Litterman (BL) model solves this problem. According to Islamic principles, the CAPM’s use in the BL model is problematic due to the risk-free rate. This study aims to introduce a modified BL model adapted to Islamic principles. We propose a modified BL model with a Shariah-compliant asset pricing model (SCAPM) that considers the zakat obligation and purification rate to develop the model with Islamic principles. The proposed model was implemented in the Indonesian stock market. A portfolio’s Sharpe ratio using the BL-SCAPM outperforms BL-CAPM. This finding supports the idea that the modified BL model can be applied as a new alternative for a Sharia portfolio model.

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Section: Asset Pricing and Portfolio Modelingmentioning

confidence: 99%

Integrating Zakat and Purification in a Modified Black–Litterman Model for Shariah-Compliant Stock Portfolios

Subekti¹,

Abdurakhman²,

Rosadi³

et al. 2022

5002

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show abstract

“…Therefore, apart from the beneficial usage of mathematical model, the current working researches shouldn't just purely adopt or a mere infusing the Islamic values into the mainstream's model. What really matter for adopting mathematical models into the Islamic economics is that, it shouldn't cause obstacles in achieving the aim of Islamic economics, which is Falah (Abdullahi, 2018).…”

Section: Literature Reviewmentioning

confidence: 99%

“…As has been shown previously, several Islamic banking scheme practices are found in countries such as Malaysia, Indonesia, Pakistan, and some GCC countries. An example is a research conducted by Abdullahi (2018), Kiaee et al (2013), andWahid (1985).…”

Section: Visualization Of Network Co-word Mapsmentioning

confidence: 99%

Modeling Islamic Economics and Finance Research: A Bibliometric Analysis

Rusydiana¹,

Sanrego

Rahayu

2021

IJIEF

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This study aims to determine the development map of mathematic model in islamic economics and finance research that is indexed by Scopus and other reputable journal with the keyword "Mathematic model in islamic economics and finance". The data analyzed were 100 selected publications. The development map of mathematic model in islamic economics and finance research analyzed using the VOSviewer application program to find out the bibliometric map. The results showed that the number of publications on the development of mathematic model in islamic economics and finance research indexed Scopus from 1983-2019 experienced a significant increase and the most were published in Journal of King Abdulaziz University: Islamic Economics. Network visualization showed that the map of the development of mathematic model in islamic economics and finance research was divided into 3 clusters. The majority of research is related to modeling of Profit Loss Sharing (PLS) schemes. However, despite the development of using mathematical model in those researches, the approach tends to be adaptive (inductive) from conventional models that already exist. A challenge to review the mainstream model need to be further critically reviewed. Hence, it is necessary for researcher to formulate a mathematical model with a deductive approach that is reduced from Islamic norms or ethics derived from the Alquran and Sunnah.

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“…Islamic economics itself has a history of skepticism towards use of mathematics in theory building. The over mathematization of conventional economics has sent a warning signal to Islamic economists making them cautious in adopting mathematics in Islamic economics (Abdullahi, 2018). But, despite that word of caution, quantitative techniques of mathematics have important role to play in the theory and practice of Islamic economics.…”

Section: Introductionmentioning

confidence: 99%

“…Today, economic researchers and practitioners are leaning towards empirical works rather than building hypothetical theories. This can be seen from the number of empirical works published by conventional economic journals (Abdullahi, 2018).…”

Section: Introductionmentioning

confidence: 99%

Applications of operation research in Zakah administration

Abdullahi

2019

jrems

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The significance of the Zakah institution to any Islamic economy, it links to financial viability and economic progress has made it a must to modernize the sector to go in line with modern realities. Poor management of Zakah institutions has been described as detrimental to the efforts of these institutions to collect and disburse Zakah effectively. This paper looks at applications of mathematical and quantitative techniques with the view to achieving optimality and efficiency in business of collection and disbursement of Zakah. The mathematical applications tested are the techniques of contribution maximization, programming, and game theory. The potential applications of this field of mathematics to Zakah operations are vast. It calls for concerted efforts and focuses by researchers, policymakers and Islamic scholars on finding the most efficient way of deploying operation research techniques in the management of Zakah institutions.

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Contribution of mathematical models to Islamic economic theory: a survey

Cited by 8 publications

References 23 publications

Integrating Zakat and Purification in a Modified Black–Litterman Model for Shariah-Compliant Stock Portfolios

Integrating Zakat and Purification in a Modified Black–Litterman Model for Shariah-Compliant Stock Portfolios

Modeling Islamic Economics and Finance Research: A Bibliometric Analysis

Applications of operation research in Zakah administration

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