Discussion Papers

No.787 Behavioral Aspects of Religiosity in Finance: A Brief Survey on Conventional versus Islamic Finance

by Huseyin Ozturk

May 2020


Religious beliefs are accepted to be one of the main motivations for financial actions. The economic theory fails to provide an adequate foundation to study the link between religiosity and economic behavior. A number of empirical studies discusses the role of religion on the financial behavior of economic agents yet more research needs to be conducted. This study provides a brief review on how religiosity might affect financial behavior by the inclusion of recent studies. In addition to the empirical research that is based on European countries, we discuss the differences in different geographies and finance schemes. We also debate the potential factors that affect differing behavioral aspects with respect to religiosity.

Keywords: religiosity, Islamic banks, conventional banks, bank risk

JEL classification: G23, G28, O52

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