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<p>In an era where faith-based finance intersects with the urgent push for sustainability and technological disruption, understanding extreme spillover dynamics amid global uncertainties is paramount. This study investigates the time-varying, asymmetric interconnections between the Islamic stock market (Dow Jones Islamic Market World Index) and green/technology indices (Nasdaq Fintech, S&amp;P Global Clean Energy, NYSE Technology), while dissecting the roles of Global Economic Policy Uncertainty (GEPU), Climate Policy Uncertainty (CPU), and Geopolitical Risk (GPR). Drawing on monthly data from August 2016 to September 2025 (a period marked by COVID-19 shocks, climate policy shifts, and geopolitical tensions), this study employs a Bayesian TVP-VAR framework for dynamic connectedness, complemented by causality-in-quantiles and quantile-on-quantile regressions to capture nonlinear tail dependencies. Findings reveal pervasive spillovers exceeding 42% on average, intensifying to 22% during crises, with CPU and GPR as dominant transmitters cascading volatility to green and tech assets. Islamic indices emerge as primary receivers, absorbing downside risks, while technology amplifies contagion in bearish tails and dampens in calm regimes, challenging absolute safe-haven narratives. Nonlinear analyses expose state-contingent causality: CPU fuels bearish spillovers, GPR boosts bullish ones, and GEPU mutes mid-quantiles. These insights fill critical literature gaps, urging policymakers to foster hybrid sukuk-tech instruments and quantile-based stress tests for resilient ethical portfolios. This study empowers investors by illuminating regime-sensitive strategies to navigate uncertainty-fuelled volatility, which is expected to advance sustainable Islamic finance as a bulwark against global risks.</p>

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Extreme Dynamic Spillovers between the Islamic Stock Market and Green and Technology Indices: Contagion Lessons from External Uncertainties

  • 期刊论文

  • 发表日期：

    2026年2月16日

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  • Abdulkadri Toyin Alabi,
  • Mubaraq Sanni,
  • Saka Tunde Abdulsalam

摘要

In an era where faith-based finance intersects with the urgent push for sustainability and technological disruption, understanding extreme spillover dynamics amid global uncertainties is paramount. This study investigates the time-varying, asymmetric interconnections between the Islamic stock market (Dow Jones Islamic Market World Index) and green/technology indices (Nasdaq Fintech, S&P Global Clean Energy, NYSE Technology), while dissecting the roles of Global Economic Policy Uncertainty (GEPU), Climate Policy Uncertainty (CPU), and Geopolitical Risk (GPR). Drawing on monthly data from August 2016 to September 2025 (a period marked by COVID-19 shocks, climate policy shifts, and geopolitical tensions), this study employs a Bayesian TVP-VAR framework for dynamic connectedness, complemented by causality-in-quantiles and quantile-on-quantile regressions to capture nonlinear tail dependencies. Findings reveal pervasive spillovers exceeding 42% on average, intensifying to 22% during crises, with CPU and GPR as dominant transmitters cascading volatility to green and tech assets. Islamic indices emerge as primary receivers, absorbing downside risks, while technology amplifies contagion in bearish tails and dampens in calm regimes, challenging absolute safe-haven narratives. Nonlinear analyses expose state-contingent causality: CPU fuels bearish spillovers, GPR boosts bullish ones, and GEPU mutes mid-quantiles. These insights fill critical literature gaps, urging policymakers to foster hybrid sukuk-tech instruments and quantile-based stress tests for resilient ethical portfolios. This study empowers investors by illuminating regime-sensitive strategies to navigate uncertainty-fuelled volatility, which is expected to advance sustainable Islamic finance as a bulwark against global risks.