Wealth creation and distribution through shariah-compliant firms

(The aspirations of Islamic investors to participate in the stock market in Malaysia were brought to realization by the inception of the Kuala Lumpur Shariah Index (KLSI) in 1999. This study is undertaken to investigate the impacts of compliance to Shariah rules on firms' performance focusing on their wealth creation capacities and wealth distribution propensities. Shariah-compliant firms refer to the firms included in the KLSI for complying to Shariah rules in financial and business transaction~ Previous studies analyzing such performance made comparison between Shariahcompliant firms, funds or indices with their conventional counterparts. However, in this study the comparison is made between the firms' pre- and post-Shariah compliance performance or vice versa in reference to their inclusion in or exclusion from the Islamic index in Bursa Malaysia, thus avoiding the "survival bias' phenomenon of previous studies