Markets are often sites of ongoing contestation regarding the acceptability of various product features and production practices. Although prior research has explored how producers resolve moral controversies, less attention has been paid to how they convince consumers of their products’ moral acceptability when consensus remains elusive. This study addresses this gap by examining a prominent tactic: producers’ strategic affiliations with high-status moral advisors. We theorize that such affiliations reassure consumers, making them more likely to accept reduced financial returns for products bearing a strong stamp of moral approval. We test and find support for this argument using data on 1,540 Shariah-compliant bonds, or sukuk, where there has been ongoing debate over what product features are allowed according to Islam. We find that sukuk endorsed by high-status Shariah scholars (sheikhs) have significantly lower coupon rates, indicating consumers’ willingness to accept reduced financial returns in exchange for moral reassurance. Additionally, the impact of high-status endorsements weakens as sukuk adhere more closely to strict moral interpretations, highlighting a compensatory relationship between status signals and substantive product features. Supplementary analyses reveal that issuers are more likely to seek endorsements from high-status moral advisors when their products are complex or opaque. Overall, this research helps to build a more comprehensive picture of the tactics producers use to overcome the challenges of contested moral markets.
Paolella et al. (2026) studied this question.