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The lack of physical and technological infrastructure, as well as the low quality of human resources, have led to very low rates of foreign direct investment in developing countries. Indeed, infrastructure projects require huge amounts of investment which governments in those countries cannot fund from their own budgets. Meanwhile, foreign loans fr...
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Indonesia and many countries in the world have been using ṣukūk as one of the tools of monetary or fiscal policy in economic development. Nevertheless, it is still rare to find empirical studies that prove the practice of ṣukūk has really played a role in the economy. Before studying further the influence of sovereign ṣukūk on the economy of state,...
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... EG is a response variable, and it is measured by a proxy of GDP growth which is a log of real GDP per capita (Barro, 1991), and it reflects the real state of the economy (Asteriou & Spanos, 2019;Karim et al., 2022;kong et al., 2021;Sun & Tang, 2022;). This technique is consistent with the findings of previous studies (Smaoui & Nechi, 2017;Echchabi et al., 2016;Ledhem & Mekidiche, 2022;Malikov, 2017;Yıldırım et al., 2020) investigating the impact of Islamic securities and Sukuks on economic growth. ...
Although green Sukuk (GS) as a sustainability enabler has started to emerge globally, a limited amount of research has focused on understanding its perspectives and potential. Accordingly, this research aims to explore the economic, social, and financial perspectives of GS by conceptualizing the effects of the issuance of green Sukuk (IGS) on economic growth (EG), social development (SD), and financial performance (FP). The fundamentals of the resource-based view (RBV) theory and institutional theory are employed to develop the theoretical underpinnings of this research. The panel data for IGS, EG, SD, and FP indicators between 2018 and 2021 were collected from Indonesia and were analyzed using the generalized method of movements regression technique. The results indicate that IGS positively interacts with all three indicators (EG, SD, and FP). Further analysis reveals that IGS has a moderate positive effect on EG, a weak positive effect on SD, and a significant positive effect on FP. Our research findings contribute to developing an integrated business landscape covering major domains of environmental sustainability, socioeconomic development, and financial performance under the GS theme.
... Because Islamic financial instruments must be based on tangible assets, Sukuk is different from 192 www.internationalstudentsymposium.com 8. Uluslararası Öğrenci Sempozyumu traditional securities. Sukuk holders owned the asset while in conventional bonds ownership of the asset is absent (Ogunbado, 2019), and bond holders are creditors (Malikov, 2017). This means that the Sukuk is a document to prove ownership of the asset or project and the bond is a document to prove the debt. ...
... Bondholders get predetermined interest, while Sukuk holders get a specific part of the profits generated from the underlying asset (Malikov, 2017). In Sukuk, profits are given only if the project achieves success. ...
Because infrastructure projects need a huge amount to be accomplished, Sukuk can finance those projects. Some experiences show that the use of Sukuk prove the success of Sukuk in financing infrastructure projects. Sukuk is considered one of the Islamic financial instruments that provide the necessary support to achieve economic development because it involves collecting funds and directing them to either public or private investment. By issuing Sukuk, the government can collect funds from individuals and firms to finance large projects. This paper sought to shed light on the role of Sukuk as a tool for financing infrastructure. The study concludes that Sukuk plays a vital and effective role in providing funds to finance infrastructure. Experiences prove that issuing Sukuk in many countries has succeeded to finance big infrastructure projects such as airports and highways. Therefore, Sukuk is a useful and effective Instrument to finance infrastructure.
... This finding demonstrates that sovereign Sukuk indeed promote economic growth. Furthermore, Malikov (2017) also confirmed this outcome by revealing a positive impact of sovereign Sukuk issuances on the economic development of Malaysia and Saudi Arabia. ...
The main objective of this paper is to examine the impact of Sukuk sector development on economic growth. This study focuses on a sample comprising some Sukuk-issuing countries in the MENA and Southeast Asia regions over the period 1995-2015. To address potential problems of endogeneity and simultaneity, we employ the generalized method of moments (GMM) system proposed by Blundell and Bond (1998). The obtained results indicate that the development of the Sukuk market significantly affects economic growth, even after controlling various measures of the financial market development and classical determinants of economic growth. Furthermore, the findings suggest that the financial and service sectors have a greater impact on economic growth compared to other sectors. Additionally, there is a significant difference observed between the various sectors of Sukuk in the two regions.
... In contrast to conventional bonds, the importance of Sukuk is the connection it has with the real economy through its assets. According to Malikov (2017) Sukuk positively contribute to economic growth and social goals, both of which are important for long-term development. ...
The COVID-19 pandemic is an extreme market condition that encourages the investigation of a safe haven asset for an investment portfolio. This study examines Sukuk's ability to provide a safe haven against a global and Saudi equities portfolio during the COVID-19 pandemic. It investigates whether adding Sukuk to an equity portfolio might reduce downside risk by calculating the portfolio's downside risk using the value-at-risk (VaR) and modified value-at-risk (MVaR) before and after adding Sukuk to the equity's portfolio. According to empirical results, the global and Saudi Sukuk demonstrated safe-haven features during the Covid-19 pandemic. Sukuk returns respond to global uncertainty differently and offer investors secure investment options during times of high volatility. The empirical results of this study suggest that portfolio managers can reduce the portfolio risk during the pandemic by adding Sukuk to their domestic and international equities portfolios. Furthermore, international and Saudi investors might rebalance their portfolios to maintain the required level of risk throughout the outbreak by including Sukuk in their portfolios.
... IIFM Sukuk Report (2021) incelendiğinde uluslararası anlamda ilk sukuk ihracı gerçekleştiren Malezya'nın sukuk piyasasında wakala sukuk %0.56 ve icâre sukuk %0.18 gibi çok küçük oranlarda yer alırken, murabaha sukuk %61,05, mudârabe sukuk %10,52, müşareke sukuk %4,03 ve hibrit sukuk %23,66 oranında yer almaktadır. Malezya için sukuk ihracı ile ekonomik büyüme arasındaki ilişkiyi inceleyen çalışmalara bakıldığında sukuk ihraçlarının ekonomik büyümeyi olumlu bir şekilde etkilediği anlaşılmaktadır (Ahmad vd., 2015;Malikov, 2017;Ledhem, 2020). Bu sebeple Türkiye'deki katılım bankalarının reel ekonomiye katkı sunmak adına icâre ve wakala sukuk yerine mudârabe, müşareke ve murabaha gibi sukuk türlerine ağırlık vermeleri gerektiği söylenebilir. ...
Purpose: The aim of this paper is to investigate the relationship between sukuk issued by participation banks and economic growth in Turkey. Method: In this paper, Engle-Granger co-integration and Grenger causality approaches were used as methods. The sukuk issued by all participation banks operating in Turkey and real GDP figures have been analyzed for the period of 2013Q4-2021Q3. Findings: As a result of the Engle-Granger co-integration test, long-term statistically significant co-integration relationship was not found between the issuance of sukuk and real GDP. However, according to the Grenger causality test results, a one-way Grenger causality relationship from real GDP to sukuk issuances was found. Implications: According to the results of this paper, there is no co-integration relationship between the sukuk issued by participation banks and economic growth in Turkey. In other words, it was concluded that there is no long-term equilibrium relationship between the variables. In addition, the one-way Grenger causality relationship determined from economic growth to sukuk issuance shows that participation banks cannot contribute to economic growth with the sukuk instrument, on the contrary, they benefit from economic growth. The results of the study are in the opposite direction of the expected results. Originality: The originality of this study is that it is the first study to examine the relationship between variables in the context of Turkey using the Engle-Grenger co-integration and Grenger causality approach.
... Studies that specifically examine the effect of Sukuk on economic growth were conducted by Malikov (2017) and Smaoui et al. (2017). Their studies revealed that there is a relationship between the development of Sukuk and economic growth. ...
... In this research, he proved the relationship between the development of the Sukuk market and economic growth. The same study was conducted by Hassan et al. (2018) and Malikov (2017), which took Malaysia as the sample. The studies proved a difference in economic growth between before and after Sukuk issuance. ...
... Based on considerations regarding the development of the Sukuk market, according to research conducted by Smaoui (2017), Malikov (2017), and Anwar (2018), testing of the variable of government effectiveness in terms of economic growth was also carried out by several previous researchers. Among them is research by Arora et al. (2018). ...
This study examines the impact of Sukuk on economic growth with country governance (regulatory quality, the rule of law, and government effectiveness) as the moderating variable. Five countries, Indonesia, Malaysia, United Arab Emirates, Bahrain, and Saudi Arabia were taken as samples. Data taken were from 2006 to 2018. Moderating Regression Analysis (MRA) was used to test the effect of the variables in the country's governance in moderating the relationship between Sukuk and economic growth. The Generalized Least Square (GLS) was used to minimize the variance in the estimation model. The findings of this study indicate that the Sukuk development moderated by the regulatory quality has a significant positive effect on the country's economic growth. At the same time, the other two moderating variables (the rule of law and government effectiveness) did not show a significant moderation effect. The regulatory quality shows the policy's efficiency implemented by the government and Sukuk innovation.
... Studies that specifically examine the effect of Sukuk on economic growth were conducted by Malikov (2017) and Smaoui et al. (2017). Their studies revealed that there is a relationship between the development of Sukuk and economic growth. ...
... In this research, he proved the relationship between the development of the Sukuk market and economic growth. The same study was conducted by Hassan et al. (2018) and Malikov (2017), which took Malaysia as the sample. The studies proved a difference in economic growth between before and after Sukuk issuance. ...
... Based on considerations regarding the development of the Sukuk market, according to research conducted by Smaoui (2017), Malikov (2017), and Anwar (2018), testing of the variable of government effectiveness in terms of economic growth was also carried out by several previous researchers. Among them is research by Arora et al. (2018). ...
This study examines the impact of Sukuk on economic growth with country governance (regulatory quality, the rule of law, and government effectiveness) as the moderating variable. Five countries, Indonesia, Malaysia, United Arab Emirates, Bahrain, and Saudi Arabia were taken as samples. Data taken were from 2006 to 2018. Moderating Regression Analysis (MRA) was used to test the effect of the variables in the country's governance in moderating the relationship between Sukuk and economic growth. The Generalized Least Square (GLS) was used to minimize the variance in the estimation model. The findings of this study indicate that the Sukuk development moderated by the regulatory quality has a significant positive effect on the country's economic growth. At the same time, the other two moderating variables (the rule of law and government effectiveness) did not show a significant moderation effect. The regulatory quality shows the policy's efficiency implemented by the government and Sukuk innovation.
... The paper by Malikov (2017) gives useful insights on the possible influence of sovereign ṣukūk on economic growth in emerging countries, notably in the infrastructure sector. It emphasizes the relevance of ṣukūk financing as a vehicle for boosting economic growth and infrastructural development. ...
... Likewise, non-Muslim countries such as Hong Kong, UK, Luxembourg, and South Africa are seeking to diversify investment portfolio. According to Malikov (2017), this fact demonstrated that ṣukūk issuance has a positive impact on economic growth. ...
Ṣukūk is a new method of financing for both the government and business sector in Bangladesh. By utilizing a descriptive approach, our investigation seeks to ascertain the prospects and outlines the challenges of ṣukūk market in Bangladesh. The primary goal of this article is to investigate domestic legal structure of Bangladesh’s ṣukūk market. The conditions for issuing ṣukūk have already been established by the presence of a large Muslim population, a stable macroeconomic environment, sufficient foreign exchange reserves, and remittances. The findings suggest that there is significant potential for ṣukūk in the country, but it requires a concerted effort from the government, regulators, and market players to overcome the challenges and promote the growth of the market. Finally, this paper provides recommendations for policymakers and market participants to foster the development of the ṣukūk market in Bangladesh.
... Since Islamic securities are a category of securities in financial markets, many remarkable studies like Malikov (2017), Mitsaliyandito et al. (2017), Smaoui and Nechi (2017), Sari et al. (2018) and Ledhem (2020) have determined that Islamic securities development encourages economic growth through expanding investment and capital assets. Therefore, in the sense of the "endogenous growth theory", Islamic securities are an exogenous factor that positively impacts economic growth when investments and capital stocks are raised by Islamic securities financing. ...
... All the previous studies in this paper focused on employing the GDP as a measurement for economic growth when it is investigated with Islamic securities and Islamic financing. Thus, this paper employs the GDP as a dependent variable for economic growth (Malikov, 2017;Al-Raeai et al., 2018;Smaoui and Nechi, 2017;Echchabi et al., 2018;Yıldırım et al., 2020;Ledhem, 2020) (Table 1). ...
Purpose
This paper aims to investigate empirically whether Islamic securities enhance economic growth in the Southeast Asian region based on the endogenous growth theory using the non-parametric analysis.
Design/methodology/approach
This paper applies panel quantile regression with Markov chain Monte Carlo optimization as an optimal non-parametric approach to investigate the effect of Islamic securities on economic growth starting from 2013Q4 to 2019Q4 in Southeast Asia. Total issued Islamic securities holdings are employed as a measure for Islamic securities, while the gross domestic product is employed as a proxy for economic growth. The sample includes all working Islamic financial foundations in the top progressive Islamic securities markets' countries of Southeast Asia (Malaysia, Indonesia and Brunei Darussalam).
Findings
The findings confirm that the increase of issuing Islamic securities in Islamic capital markets of Southeast Asia is increasing the levels of economic growth, reflecting the weighty role of the Islamic capital market development as an active contributor to economic growth.
Practical implications
This research would fill the literature gap by exploring Islamic securities–economic growth nexus in Southeast Asia using a robust non-parametric approach based on the endogenous growth theory for better estimation results. The findings of this review serve as a roadmap for financial analysts, policymakers and decision makers to stimulate the Islamic securities markets as another source of finance which can promote the economic growth.
Originality/value
This research is the first that investigates empirically the Islamic securities–economic growth nexus in Southeast Asia using a new empirical investigation built on the non-parametric analysis and outlined within the theoretical context of the endogenous growth model to gain robust evidence about this nexus.
... Developed and developing nations can benefit to a large extent by issuing Sukuk. Malikov (2017) also states that Sukuk issuance has become one of the important products of Islamic finance in Malaysia, whereas they are utilized as an equity device to raise public funds to utilize to finance the government budget in growing infrastructure projects. ...
... Since Sukuk continue as loans, it comes an obligation for the government to pay back through the underlying assets of Sukuk. Also, Sukuk issuance has positively affected the economic growth of Saudi Arabia and Malaysia as there were significant contrasts their economy, financial and social well-being signs of the two nations before and after the issuance of Sukuk (Malikov, 2017). Sukuk issuances provided effectively more funds to finance the economic improvement and tackle the issues of unemployment and poverty (Bin Syed Azman & Ali, 2016). ...
The purpose of this paper is to provide an alternative way for abandoned projects in Nigeria through Sukuk. Sukuk have been attracting the attention of investors and become most popular in many global markets. Further, Sukuk have been used for funding many infrastructure developments as an alternative for conventional bonds. The study adopts a descriptive approach to highlight the significance of Sukuk as an investment tool to improve the infrastructural development and economic growth via abandoned projects in Nigeria because this experience is still at the infancy stage in the country. This study attempts to give the financial solution by depending on internal foreign loans which comprise the interest rate. The outcome indicates that Sukuk is the better alternative and reliable in financing abandoned projects and the new one for the development of the country. Also, study shows that Sukuk is the most significant financial instrument in the market because it has no interest rate. Many Muslim countries and non-Muslim countries have applied Sukuk for their infrastructure development and economic growth. The study will be a primary reference for different governments at the state and federal level who intend to adopt similar instruments for abandoned projects in their respective nations. As an individual is qualified to purchase Sukuk, this might lead to a better wealth distribution amongst people. The study has implication for the policymaker and government in terms of fully adopting Sukuk to address the issues of abandoned projects, thereby enhancing the social wellbeing of the people and the development of the economy. The study is among the studies that thoroughly and critically appraise Sukuk as an alternative for the government to tackle issues of abandoned projects in the country. It contributes to the literature in the field of Islamic finance according to the philosophy of profit and loss sharing among investors to solve different challenges in society.
