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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 infinancial intermediation, particularly in the post-crisis era. In addition, theyalso deserve the attention of students of Islamism due to their possibleconnection with Islamic movements. Through a comparison of Islamic andconventional banking, we analyze the motivations and behavior of Islamiceconomic actors who determine the cash flow to Islamic banks. Our findingssuggest that, in contrast to popular views that portray these actors asideologues or financiers of radical Islam, they have pragmatic motivations andmay 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 theconference participants at the Turkish Economic Association’sannual conference in 2010, Seth Carpenter, and Okan Yılankayafor valuable feedback. We also thank PınarÖzlü for her help regarding clarifications withthe data. Emre Özer, Aleaddin Tok, and Okan Gülbakall provided excellent research assistance. This study was funded by theScientific and Technological Research Council of Turkey, project number110K446 (Türkiye Bilimsel ve TeknolojikAraştırma Kurumu,TÜBİTAK).

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