Year: 2026 | Month: April | Volume: 13 | Issue: 4 | Pages: 438-447
DOI: https://doi.org/10.52403/ijrr.20260445
Integrating Behavioral Bias, Religiosity, Maqasid al-Syariah, and ESG Preference: Toward a Unified Framework of Muslim Investor Behavior
Agung Budi Sulistiyo1, Novi Wulandari2, Imamatin Listya Putri3, Muhammad Miqdad4, Muhammad Dhito Fakhrurrozi5
1,2,3,4,5Department of Accounting, Jember University, Jember, Indonesia
Corresponding Author: Agung Budi Sulistiyo
ABSTRACT
Recent developments in behavioral finance have improved understanding of investor decision-making beyond rational choice assumptions; however, existing behavioral models remain insufficient to explain investment behavior in Islamic financial contexts where decisions are shaped not only by cognitive bias but also by religious commitment and ethical objectives. Although prior studies have examined religiosity, Shariah compliance awareness, behavioral bias, and sustainability-oriented investment preference, these determinants are typically analyzed in isolation, resulting in a fragmented explanation of Muslim investor behavior. Addressing this limitation, this study develops a unified conceptual Islamic behavioral finance framework that integrates behavioral bias theory, religiosity, Maqasid al-Shariah orientation, and environmental, social, and governance (ESG) investment preference into a multidimensional explanation of value-based investment decision-making.
Drawing on integrative literature analysis across behavioral finance, Islamic economic theory, and sustainable investment research, the proposed framework conceptualizes Muslim investor behavior as the outcome of interaction between psychological tendencies and normative ethical commitments. In particular, the framework positions religiosity as an internal behavioral regulator, operationalizes Maqasid al-Shariah as a higher-order ethical decision driver, and introduces ESG investment preference as a contemporary mechanism through which Islamic values are translated into sustainability-oriented financial participation.
The study contributes to the literature by extending behavioral finance beyond cognitive bias explanations toward a value-integrated decision-making structure that reflects the distinctive characteristics of Islamic investment behavior. It further advances Islamic finance research by transforming Maqasid al-Shariah from a normative objective into an analytical behavioral construct and by bridging Islamic ethical investment theory with the global ESG investment discourse. The proposed framework provides a theoretically grounded foundation for future empirical testing of Islamic behavioral finance models in emerging sustainability-oriented financial environments.
Keywords: Islamic behavioral finance; Behavioral bias; Maqasid al-Shariah orientation; Religiosity; ESG investment preference
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