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Religion vs. ethics: Tail dependence between Sukuk, green bond, Islamic Fintech, and fourth industrial revolution assets

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  • Rabbani, Mustafa Raza
  • Hassan, M. Kabir
  • Billah, Syed Mabruk
  • Shaik, Muneer
  • Halim, Zairihan Abdul

Abstract

The study investigates the tail reliance of Sukuk, green bonds, and seven other conventional and Islamic Fintech assets (fourth industrial revolution assets) using the daily pricing data for various financial instruments from 20th December 2019 to 24th March 2024. Using the quantile-on-quantile method of Sim and Zhou (2015), to investigate the tail dependency among the returns of various markets and Sukuk (GB), and the quantile cross-spectral (coherency) model of Baruník and Kley (2019), to evaluate the dependence relationship between the returns of various markets and Sukuk. The study's findings indicate that the interdependence of Sukuk and green bonds with other Fourth Industrial Revolution assets act differently in bullish, bearish, and normal market circumstances and across short, medium, and long-term time horizons. The study is significant because it demonstrates the strong safe-haven qualities of green bonds (ethical) and Sukuk (religious). It contends that including green bonds in a portfolio will provide important diversification benefits, especially during uncertain times.

Suggested Citation

  • Rabbani, Mustafa Raza & Hassan, M. Kabir & Billah, Syed Mabruk & Shaik, Muneer & Halim, Zairihan Abdul, 2025. "Religion vs. ethics: Tail dependence between Sukuk, green bond, Islamic Fintech, and fourth industrial revolution assets," Pacific-Basin Finance Journal, Elsevier, vol. 90(C).
    • Handle: RePEc:eee:pacfin:v:90:y:2025:i:c:s0927538x25000204
    DOI: 10.1016/j.pacfin.2025.102683
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    Keywords

    Fintech; Green bond; Industrial revolution; Sukuk; quantile coherency;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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