This project examines the nature of religious knowledge capital in Islamic finance and how this capital strengthens and legitimizes financial centers' locational reputation. Religious knowledge capital combines the resources, skills and authority associated with a community of experts endowed with specialized religious knowledge. From a theoretical perspective this research will advance the concept of religious knowledge capital as it can be distinguished from human capital by highlighting the nature of epistemic authority among religious scholars and financial gatekeepers in Islamic economies. Such authority is rooted in knowledge of the Islamic (specifically Shari'a) legal methodology and epistemology. Direct grounding of sacred texts bestows knowledge communities with legal authority that renders financial products, services and contracts permissible in Islamic markets. The investigators will address important theoretical and empirical questions of variegated capitalism associated with religious principles of market governance. As such, the research seeks to achieve two outcomes. First it will quantitatively test the hypothesis that religious knowledge capital positively influences locational reputation using spatial models. Second, it will qualitatively clarify the factors that shape religious knowledge capital level. Data collection involves surveys, interviews and web analysis at Kuala Lumpur (Malaysia) and Manama (Bahrain). Both cities are building considerable human and knowledge capital in Islamic finance but in different ways. In comparing knowledge communities in the two cities, the project contributes to economic geography by unpacking the nature of local governance structures and how these structures facilitate Islamic financial flows across global spaces.
The project will train students from underrepresented groups at their respective universities, and disseminate findings through publications, workshops, conferences, and lectures in the US, Malaysia and Bahrain, and relevant Gulf States, and via the APEC (Asia-Pacific Economic Cooperation) study centers. Government agencies in Malaysia and Bahrain have also expressed an interest in the research and the investigators will foster international collaborations with researchers in those countries and their policy-makers. This research stands to benefit the United States in two ways. First, American cities such as New York City have acquired a reputation for its command of global financial flows, and Citigroup along with other American banks have begun to offer Islamic financial products. But NYC trails behind London as a center of Islamic finance. Second, the potential for American banks to capture the Islamic market is enormous as demand for Islamic financial services rises in the US. This research will help shed light on how American banks, and the cities that host them, can become significant players in the global Islamic financial market.