The perceived determinants of Islamic finance for China’s belt and road initiative

Abstract

There is a growing tide of global interest in China’s Belt and Road Initiative (BRI) launched by President Xi Jinping in 2013. The initiative has brought in its wake enormous opportunities for creating economic development infrastructure, strengthening open regionalism and accelerating the pace of trade and investment in nearly 70 countries including 27 Muslim countries. Although a large number of finance options for the BRI projects have been highlighted in literature, the strategic role of Islamic finance has not been adequately explored. This paper bridges the knowledge gap by examining the strategic role of Islamic finance in the context of the BRI. Based on an empirical study, the authors explore the dimensions of Islamic finance in attracting investments in BRI projects and test the psychometric properties of the underlying dimensions. The authors discuss important managerial implications of these findings.

Keywords:

• Belt and road initiative
• foreign direct investment
• Islamic finance
• Sukuk

Additional information

Notes on contributors

Nabil Baydoun

Professor Dr. Nabil Baydoun is Vice-Chancellor, Academic Affairs at Hamdan Bin Mohammed Smart University, Dubai, UAE. He also held senior academic positions at various institutions in Australia, Honk Kong, New Zealand and the UAE. He is an internationally- recognized authority on the impact of culture and religion on accounting and financial systems. Professor Baydoun has a track record of launching innovative initiatives and building effective teams in large and complex organizations. He is internationally experienced in financial management, accounting, startups, restructuring and strategic planning. He specializes in helping organizations sustain a healthy balance between mission fulfilment and an effective and financially sound operation. He formulated and implemented strategies for long-term profitability and stability with big-picture vision and ability to promote organizational growth.

Syed Aziz Anwar

Dr. Syed Aziz Anwar is a professor of international business and marketing at Hamdan Bin Mohammed Smart University, Dubai, United Arab Emirates. His Ph.D. thesis was evaluated by a jury of the Commission of the European Union, Brussels. The jury sponsored the research work for publication in England in the form of a book, ‘The European Community and Indo-British Trade Relations ‘Gower (1983). He has held senior academic positions in India, New Zealand, Brunei, Malaysia, Germany, Kuwait, Saudi Arabia and the UAE. His research papers and case studies have been published in scholarly journals and books. He conducted training programs for UN and a large number of public and private sector organizations in several countries.

M. Sadiq Sohail

Dr. M. Sadiq Sohail is a professor at the KFUPM School of Business, King Fahd University of Petroleum and Minerals, Saudi Arabia. His research interest includes diverse areas of marketing, cross-cultural management and international business. He is a prolific researcher and has published over 100 papers and contributed to several book chapters. He is also a recipient of many research grants. He also serves on the editorial committees of few international journals in various capacities.