Scholarly Comments on Academic Economics

Entrepreneurship and Islam: An Overview

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Muslim entrepreneurs are compelled by religious laws to abstain from engaging in certain economic and financing activities, such as those involving gambling, usury, and speculation. Western entrepreneurs may choose to forgo certain business opportunities due to religious or moral laws as well; however, these limitations are voluntary and are often less restrictive than those of Shari’ah laws. Religious limitations help to explain differences in entrepreneurial outcomes between Western and Islamic economies. However, direct comparison of the two systems using purely financial benchmarks is inappropriate. Islamic laws argue that the limitations imposed on Muslim entrepreneurs eliminate inherently immoral and unjust economic practices, and their prohibition increases the social value of the economy. Understanding the differences between the motivations of Western and Islamic entrepreneurs is important in determining their relative success.