The dynamic effect of participation �ndex on the stable firm dynamics: evidence from non-financial firms from T�rkiye

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dc.contributor.authorDoruk, Omer Tugsal
dc.contributor.authorErtugrul, Hasan Murat
dc.contributor.authorTekdogan, Omer Faruk
dc.date.accessioned2026-02-27T07:33:25Z
dc.date.available2026-02-27T07:33:25Z
dc.date.issued2025
dc.description.abstractPurposeThis study aims to examine whether the inclusion of firms in the participation index provides sustainability according to firm growth and financial leverage within the Islamic finance principles framework by using the Local Projections method for Turkish nonfinancial firms.Design/methodology/approachThe authors use the semiparametric local projections method which allow us to make dynamic panel impulse-response analysis. At the same time, the data set the authors use is a hand collected data set. In this framework, the authors investigate the impact of inclusion in the participation index for two quarters on the firm dynamics of Turkish nonfinancial firms using the local projections methodology.FindingsThe results suggest that firms included in the index for at least two quarters experience more stable growth and significantly lower leverage, while short-term inclusion yields weaker effects. These findings suggest that prolonged compliance with Islamic financial standards strengthens internal financing capacity and shields firms from debt exposure. The study contributes to Islamic finance theory by incorporating time-varying Shariah compliance and offers practical implications for financial regulation and firm governance.Practical implicationsThis study highlights the impact of Islamic finance on firm growth, and stability, indicates its potential to decrease dependence of debt, support sustainable growth and increase economic resilience through its principles and practices. For high-value businesses to benefit from the Islamic finance principles, policymakers can create opportunities to reduce reliance on debt and increase liquid assets by aligning financial structures with Shariah standards.Originality/valueTo the best of the authors' knowledge, this is the first study in the emerging markets Islamic finance context that uses a time-varying participation index approach in its empirical analysis and sheds new light on this relationship in the literature.
dc.identifier.doi10.1108/IMEFM-08-2024-0440
dc.identifier.issn1753-8394
dc.identifier.issn1753-8408
dc.identifier.urihttp://dx.doi.org/10.1108/IMEFM-08-2024-0440
dc.identifier.urihttps://hdl.handle.net/20.500.14669/4561
dc.identifier.wosWOS:001595488700001
dc.indekslendigikaynakWeb of Science
dc.language.isoen
dc.publisherEmerald Group Publishing Ltd
dc.relation.ispartofInternational Journal of Islamic and Middle Eastern Finance and Management
dc.relation.publicationcategoryMakale - Uluslararas� Hakemli Dergi - Kurum ��retim Eleman�
dc.rightsinfo:eu-repo/semantics/closedAccess
dc.snmzKA_20260302
dc.subjectIslamic finance
dc.subjectParticipation index
dc.subjectT�rkiye
dc.subjectNonfinancial firms
dc.subjectLocal projections
dc.subjectDynamic shocks
dc.subjectC33
dc.subjectC54
dc.subjectG23
dc.subjectL25
dc.titleThe dynamic effect of participation �ndex on the stable firm dynamics: evidence from non-financial firms from T�rkiye
dc.typeArticle; Early Access

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