The study aimed to investigate the impact of behavioral biases on herding for Islamic financial products with the mediation of shariah literacy. An adopted questionnaire from several published studies was used to collect data. The data were collected from 410 respondents and were analyzed with SmartPLS. The results for the direct impact showed that self-attribution, illusion of control, and information availability have a positive and significant impact on herding for Islamic financial products while shariah (...) literacy showed an insignificant impact on herding. The results for mediation showed that previously significant and positive impact turned to insignificant when shariah literacy was introduced as mediating variable between the illusion of control, self-attribution, information availability, and herding. From a theoretical perspective, this study would contribute to the existing body of knowledge of financial decision making from shariah literacy point-out. On the other hand, the findings of this study may be useful for investors to avoid herding in the Islamic financial markets. The authors synthesize the contribution made by behavioral finance studies in extending the knowledge of herding behavior in Islamic financial products with a mediating role of shariah literacy. The key limitation of the study includes data that were collected from three districts of Punjab, Pakistan. (shrink)

This study aims to explore whether a discrepancy exists between the ideal and communicated (disclosed) ethical identity of Islamic banks in Asia and, further, whether there is any association of communicated ethical identity with financial performance. To achieve the objectives, the study analyses data derived from annual reports of Islamic banks in Asia for the period 2006–2010. The results suggest that out of the seven banks studied, three of them are above average and the rest suffer from (...) disparity between the ideal and communicated ethical identities. Further, the study shows that the disclosure of a vision and mission statement; board of directors and top management; zakah, charity, and benevolent loans; and Shari’ah supervisory boards are negatively associated with performance, while the disclosure of products and services and commitment toward employees are positively associated with performance. (shrink)