By author > Farhat Amel

This study investigates the performance of complaint stocks at the firm level. A firm is compliant if it satisfies two screening stages defined by Islamic law. Our empirical analysis includes quarterly cross-sectional regressions of stock performance and risk on the compliance status. Using various market and accounting-based performance and risk measures, we provide robust evidence that compliant stocks exhibit higher performance and lower risk compared to their conventional peers independently of the business cycle and the period of study. Our results hold after accounting for different control variable known in finance literature to affect the cross section of stock returns.