Rihab GrassaSherif El-HalabyHichem Khlif2025-05-182025-05-182025-05-14Grassa, R., El-Halaby, S., & Khlif, H. (2025). The economic consequences of Shariah governance: a systematic literature review and research agenda. Journal of Islamic Marketing. https://doi.org/10.1108/jima-06-2024-0231https://doi.org/10.1108/jima-06-2024-0231https://repository.msa.edu.eg/handle/123456789/6419SJR 2024 0.825 Q2 H-Index 63Purpose: The purpose of this study is to provide a comprehensive critical review of previous research on Shariah governance (SG) during the past three decades. This research addresses a critical research problem: the fragmentation of knowledge regarding how SG characteristics affect the multidimensional performance of Islamic financial institutions (IFIs) beyond conventional financial metrics. Despite the growing importance of IFIs in the global financial system, we still inadequately understand how SG practices influence operational efficiency, risk profiles, stakeholder trust and long-term sustainability. This limitation hinders the development of comprehensive SG frameworks that could enhance the resilience and ethical compliance of IFIs. In addition, this study offers insights into the phases of development of SG, identifies the critical gaps in the literature and recommends for future research. Design/methodology/approach: In this study, the authors use a systematic literature review approach for a sample of 110 studies from Scopus and Web of Science databases. Based on identified quality assessment criteria, they evaluated the sample of this study in terms of journals, methodology, theories, modelling, research outcomes and SGs features. Findings: Using a systematic literature review approach for a sample of 110 studies from Scopus and Web of Science databases, this paper findings demonstrate that there is a growing interest to explore further SG aspects because of the rapid steady growth and the high performance of IFIs. Likewise, the review reveals that most of existing studies are quantitative and were carried out using archived data. In addition, the existing literature has primarily focused on the outcomes of SG. Overall, this paper shows that there are plenty avenues for future research. The findings identify a number of methodological problems and concerns and discuss the implications of these problems, while also providing recommendations for future research. Research limitations/implications: This paper makes significant contributions to both corporate finance literature and practical applications in several important ways. First, this study represents a pioneering comprehensive examination of all aspects of SG, filling a notable gap in existing literature. By using a systematic approach, the authors thoroughly evaluate relevant previous works on SG and provide evidence-based recommendations for future research directions, creating a foundation for scholarly advancement in this field. Second, through the synthesis and analysis of an extensive body of research, this study develops a nuanced understanding of the economic consequences of SG mechanisms. These insights offer substantial practical value by providing evidence-based guidance to practitioners and regulatory bodies in developing more effective policies and recommendations. Financial institutions can leverage these findings to design governance frameworks that enhance compliance while optimizing performance, while regulators can use this synthesis to revise the current policy framework and formulate more comprehensive and effective oversight mechanisms that address the unique challenges of IFIs. Practical implications: Through the systematic literature review of the economic consequences of SG, the authors demonstrate that the societal implications extend beyond the financial sector. The findings reveal how strong SG practices enhance public trust and financial inclusion, particularly among conservative Muslim communities. Improved governance mechanisms promote responsible financial practices, influencing policy development and enhancing financial literacy at the community level. These outcomes illustrate the practical impact of governance improvements on community well-being and social development. Originality/value: To the best knowledge of the authors, this study contributes to the literature by being the first of its kind to discuss the development of SG literature. This study provides a comprehensive knowledge assessment of existent SG research and offers advice regarding improvements in research, policy and practice by identifying possible knowledge gaps. Accordingly, this study offers a consistent summary of the past and a roadmap for future research on SG. © 2025, Emerald Publishing Limited.en-USIslamic financeLiterature reviewShariah boardShariah governanceArticlehttps://doi.org/10.1108/jima-06-2024-0231