Acta Universitatis Danubius. Œconomica, Vol 12, No 3 (2016)

Abstract

The surge of interest in inter vivos transfers has sparked a debate over its  motivations.  However, most of the academic research has focused on developed economies; and similar to many other countries, empirical research is  scarce in  Malaysia too. This study,  aims to unravel motives for inter vivos transfers among Malaysian Muslims. It employs logit regression analysis in which the data is collected by means of questionnaires from October to December 2012.This research discovers  that exchange motive is more prevailing than altruism motive among the respondents. More inter vivos transfers are given to daughters, children who provide more services and children with low opportunity cost of their time. However, inter vivos gifts among Muslims in Malaysia have one distinctive feature,  they have been a part of the Malay culturally defined sphere enriched by the Islamic law. This is called ‘hibah’ in Malay language, which originates  from  an Arabic word. It is concluded that the cultural aspect of the inter vivos transfers provides enhanced information as to how the transfer mechanism work.