Persuasion in Islamic Finance

32 Pages Posted: 28 Jan 2019 Last revised: 19 May 2020

See all articles by Saad Azmat

Saad Azmat

Lahore University of Management Sciences (LUMS)

Haiqa Ali

Lahore University of Management Sciences (LUMS)

Kym Brown

Monash Business School, Monash University; Financial Research Network (FIRN)

Michael T. Skully

Monash University - Department of Banking and Finance; Financial Research Network (FIRN)

Date Written: January 24, 2020

Abstract

This paper explores the mechanisms of persuasion in Islamic finance that may have helped support the growth of this market. Our theoretical model may explain those factors which may influence a customer to select an Islamic financial product. For complex decisions where a person may not fully understand the background concepts such as with finance or Arabic terminology, product quality may be judged based on information in advertising and prior knowledge. Our model shows that Islamic bankers can use the customer’s ‘coarse thinking’ process when advertising products. They may be a means to make products appear more religiously (Shariah) compliant. The equilibrium level of persuasive strategies proposed help reinforces the impact of persuasion for Islamic banks.

Keywords: Investment decisions, Islamic bank, Marketing

JEL Classification: G21, G11, M31

Suggested Citation

Azmat, Saad and Ali, Haiqa and Brown, Kym and Skully, Michael T., Persuasion in Islamic Finance (January 24, 2020). Australian Journal of Management, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3322056 or http://dx.doi.org/10.2139/ssrn.3322056

Saad Azmat

Lahore University of Management Sciences (LUMS) ( email )

D.H.A, Lahore Cantt
Lahore, Punjab 54792
Pakistan

Haiqa Ali

Lahore University of Management Sciences (LUMS) ( email )

D.H.A, Lahore Cantt
Lahore, Punjab 54792
Pakistan

Kym Brown (Contact Author)

Monash Business School, Monash University ( email )

P.O. Box 197
Caulfield East, Victoria 3800
Australia
61 3 9903 1053 (Phone)
61 3 9903 2422 (Fax)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: www.firn.org.au

Michael T. Skully

Monash University - Department of Banking and Finance ( email )

900 Dandenong Road
Caulfield East, Victoria 3145
Australia
+61 3 9903 2407 (Phone)
+61 3 9903 1443 (Fax)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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