Author

  • Mei Ching Lim

    • School of Business and Economics, Universiti Putra Malaysia, Malaysia
    • Malaysia

  • Normaziah Mohd Nor

    • School of Business and Economics, Universiti Putra Malaysia, Malaysia
    • Malaysia

  • Aslam Izah Selamat

    • School of Business and Economics, Universiti Putra Malaysia, Malaysia
    • Malaysia

  • Siti Nur Iqmal Ibrahim

    • Department of Mathematics and Statistics, Faculty of Science, Universiti Putra Malaysia, Malaysia
    • Institute for Mathematical Research, Universiti Putra Malaysia, Malaysia
    • Malaysia

Abstract

Most of the existing studies primarily focus on the impact of ESG and Shariah-compliant on the financial performance instead of the share price performance. The objective of this study is to investigate the share performance of ESG (Environmental, Social, and Governance) and Shariah-compliant stocks in the Malaysian equity market, which is benchmarked against the FBMKLCI from the period of 2019 to 2023. It evaluates the ability of the stocks to surpass the benchmark and outperform the FBMKLCI by 5% and 10% respectively. This study examines the share price performance which leverages the Stata software to identify p-values (<0.1) as indicators of marginal statistical significance. The results demonstrated a mixed performance for ESG-rated stocks, with social and governance variables emerging as a more consistent driver of outperformance compared to environmental dimensions. Even though the ESG and Shariah-compliant combination demonstrated a mixed set of results in the outperformance of the stocks, it has provided some evidence that the integration of ESG and Shariah-compliant stocks may enhance the equity market returns. It promotes the alignment of ESG and Shariah-compliant stocks to institutional investors, policymakers, and retailers who strive to achieve better equity market performance. This research underscores the pivotal role of integrating ESG and Shariah-compliant frameworks in driving share price performance while ensuring that ethical standards are taken into consideration.

Keywords

References

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How to Cite

Lim, M. C., Mohd Nor, N., Selamat, A. I., & Ibrahim, S. N. I. (2025). Integrating ESG and Shariah Frameworks for Enhanced Equity Market Returns. Information Management and Business Review, 17(3(I)S), 202-215. https://doi.org/10.22610/imbr.v17i3(I)S.4728

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Copyright (c) 2025 Mei Ching Lim, Normaziah Mohd Nor, Aslam Izah Selamat, Siti Nur Iqmal Ibrahim (Author)

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Vol. 17 No. 3(I)S (2025) Digital Leadership, AI-Assisted Learning & Inclusive Workforce View issue contents

Published

2025-10-14

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