8. The Effect of Religion on Financial and Investing Decisions

  1. H. Kent Baker and
  2. Victor Ricciardi
  1. Walid Mansour1 and
  2. Mouna Jlassi2

Published Online: 1 MAR 2014

DOI: 10.1002/9781118813454.ch8

Investor Behavior: The Psychology of Financial Planning and Investing

Investor Behavior: The Psychology of Financial Planning and Investing

How to Cite

Mansour, W. and Jlassi, M. (2014) The Effect of Religion on Financial and Investing Decisions, in Investor Behavior: The Psychology of Financial Planning and Investing (eds H. K. Baker and V. Ricciardi), John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9781118813454.ch8

Author Information

  1. 1

    Islamic Economics Institute, King Abdulaziz University, Saudi Arabia

  2. 2

    PhD Student, Ecole Superieure de Commerce de Tunis, University of La Manouba in Tunisia

Publication History

  1. Published Online: 1 MAR 2014
  2. Published Print: 31 JAN 2014

ISBN Information

Print ISBN: 9781118492987

Online ISBN: 9781118813454

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Keywords:

  • corporate finance;
  • individual investment decision;
  • investor psychological behavior;
  • religion;
  • socially responsible investment

Summary

Religion has a major impact on people's daily life including being closely connected with their economic condition. The purpose of this chapter is to discuss the connection between religion and economic factors and to show how religion affects investment and financing decisions. It focuses on this interplay by emphasizing various corporate and personal facets. For instance, the chapter analyzes the effect of religious beliefs on investors' preferences, risk perception, ethical values, and psychological behavior. This aspect is often missing in academic finance including the behavioral paradigm. Furthermore, the chapter discusses how religious beliefs can conflict with financial theory involving making financial and investing decisions.