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The rational Islamic actor? Evidence from Islamic banking

Published online by Cambridge University Press:  11 June 2015

Seda Demiralp  and
Selva Demiralp
Seda Demiralp
Affiliation:
Department of International Relations, Işık University, 34980 Şile, İstanbul, sdemiralp@isikun.edu.tr.
Selva Demiralp
Affiliation:
Department of Economics, Koç University, Rumeli Feneri Yolu, 34450 İstanbul, sdemiralp@ku.edu.tr.
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Abstract

Islamic banks create an interest in their own right as a rising branch in financial intermediation, particularly in the post-crisis era. In addition, they also deserve the attention of students of Islamism due to their possible connection with Islamic movements. Through a comparison of Islamic and conventional banking, we analyze the motivations and behavior of Islamic economic actors who determine the cash flow to Islamic banks. Our findings suggest that, in contrast to popular views that portray these actors as ideologues or financiers of radical Islam, they have pragmatic motivations and may adapt to liberal systems in order to seize economic incentives.

Keywords

Islamic financeliberalismbank lending channelmonetary transmission mechanism.
Type
Articles
Information
New Perspectives on Turkey , Volume 52 , May 2015 , pp. 3 - 27
Copyright
© New Perspectives on Turkey and Cambridge University Press 2015 

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Footnotes

Authors’ Note: We would like to thank the conference participants at the Turkish Economic Association’s annual conference in 2010, Seth Carpenter, and Okan Yılankaya for valuable feedback. We also thank Pınar Özlü for her help regarding clarifications with the data. Emre Özer, Aleaddin Tok, and Okan Gülbak all provided excellent research assistance. This study was funded by the Scientific and Technological Research Council of Turkey, project number 110K446 (Türkiye Bilimsel ve Teknolojik Araştırma Kurumu, TÜBİTAK).

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