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This study aims to empirically investigates the effect of the COVID-19 pandemic on ethical and nonethical stocks in Indonesia. Ethical stocks which are characterized by moral-based companies’ activities and lower debt are expected to have better resilience during the COVID-19 crisis compared to nonethical stock.

This study observes 589 firms of ethical and nonethical stock during sample periods ranging from March 2, 2020 (first case announced) to June 30, 2021. Panel regression, with some control variables, was applied.

Testing firms in Indonesia revealed a significant difference in stock resilience, in which ethical stock has a better resilience compared to nonethical, with Islamic socially responsible investment (SRI) stock having the highest resilience, followed by Islamic stock and then SRI stock. This study documents a significant effect of some financial criteria on the stock resilience, namely, return market (RM), market capitalization (MCAP) and share turnover (TURN). Overall, after splitting the sample into different time horizons, this study consistently reveals that ethical firms have better resilience compared to nonethical stocks.

This study makes several contributions to the literature on Islamic finance, especially concerning Islamic screening with SRI factors. In practical terms, this study supports the argument that focusing on integrating environmental, social and governance criteria in sharia screening will improve the quality of Islamic firms. The “Islamic” label is not only a marketing label but also a quality certification.

This study can be used as a reference for developing Islamic finance more focused on sustainability issues including socioeconomic and human development by improving the quality of screening of Islamic firms. Therefore, this study suggests that the establishment of Islamic SRI index is very crucial and significant to promote ethical-based investment.

Innovation in digital technologies has been the main force in promoting growth and inclusion. However, the impact of such innovations remains ambiguous. Within this context, this study aims to analyze the distribution of digitally empowered peer-to-peer (P2P) lending in Indonesia.

This study uses a quantitative approach to estimate the impact of technological innovation in promoting economic development. In particular, this study employs empirical panel data from 135 financial technology (FinTech) companies from 2015 to 2019 and use the dynamic panel threshold regression approach. This study collects secondary data to build the estimated model.

Contrary to conventional wisdom, this study’s evidence suggests that there is a delayed effect between the contribution of P2P lending by FinTech firms on economic growth in the country. While the immense growth of FinTech seems promising, the findings indicate that FinTech is far from its optimal point. This study calculates the optimal combination between productive and consumptive lending and between Java and non-Java. In view of this finding, this study proposes strategies to effectively distribute lending and bring about the expected benefit to the economy.

Since the contribution of P2P lending on economic development has not reached its optimum, the findings expose the limitation of current technological innovation in the financial sectors. In this sense, P2P penetration on the financing market needs encouragement. The calculations for optimal allocation between productive and consumptive and between Java and non-Java provide guidance to policymakers. This study helps practitioners to shape strategy and to begin experimenting with different approaches to distribute loans effectively.

To the best of the authors’ knowledge, there are no empirical studies that examine the impact of emerging FinTech companies in promoting economic growth and financial development. The findings close this research gap, especially in regard to innovation management literature, and provide insights for practitioners, policymakers and regulators.

This study aims to investigate the effect of shariah status on initial public offering (IPO) underpricing, long-term performance and relationship between short-term and long-term IPO performance, and attempt to gain an insight into the nature of shariah IPO underpricing: a signal or an overreaction.

This study uses IPOs during 1990–2018 from Indonesia. This study uses clustered regressions to address clustering phenomenon in IPO. To investigate long-term performance, this study uses cumulative returns, cumulative abnormal returns and Fama–French three factor regressions. This study also runs cross-sectional regressions on the relationship between short and long-term performances.

This study finds that shariah status reduces lowers non-trading returns (return from offer to open prices), suggesting that shariah status may reduce information asymmetry and compensation. This study finds that both shariah and non-shariah IPOs underperform the benchmarks, with shariah IPOs underperform more. Further analysis shows a negative relationship between initial return and long-term performance for both shariah and non-shariah IPOs, whereas the negative relationship is stronger for shariah IPOs. The results indicate that shariah compliance help reduce information asymmetry; however, shariah compliance does not necessarily signal quality. Instead, shariah compliance seems to induce investor sentiment, resulting in underperformance and reversal patterns in the long run.

The results have various implications. Issuers may use shariah screening to lower underpricing. Investors may manage their investment horizons to mitigate IPO underperformance. Future research is needed to understand the nature of short and long-term performance of shariah IPO across countries. The use of ex-ante shariah definition becomes our limitation. This study also does not use buy and hold return to investigate long-term performance.

The results have various implications. Issuers may use shariah screening to lower underpricing. The results show that sharia certification may play an important role in the IPO process. However, sharia status induces individual investors, leading to more overreaction in the long term. Thus, companies need to balance between sharia certification and overreaction in the long term. Investors may manage their investment horizons to mitigate IPO underperformance.

This paper extends studies on the effect of shariah status on IPO performance using Indonesia data. Using non-trading returns, this study provides sharper analysis on the underpricing study. This study shows that shariah status leads to an overreaction, instead of a signal for quality.