Sukuk issuance and information asymmetry: Why do firms issue sukuk?
Pacific-Basin Finance Journal, 2017, vol. 42, issue C, 142-157
This study investigates the factors that promote a bank borrower to issue sukuk rather than conventional debt security in Malaysia and Indonesia from 2000 to 2014. First, our empirical results show that a bank borrower is likely to approach the sukuk market as the funding size grows and if the firm is valued highly. Second, we find that under high information asymmetry, a firm with a high stock price and large funding demand prefers sukuk issuance to conventional debt. We conclude that firms use the sukuk market as an intermediate funding market when the funding demand is too large to borrow from banks and the information asymmetry is too high for them to approach the conventional debt market.
Keywords: Sukuk; Debt issuance; Hold-up theory; Pecking order effect (search for similar items in EconPapers)
JEL-codes: G15 G30 O16 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:42:y:2017:i:c:p:142-157
Access Statistics for this article
Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee
More articles in Pacific-Basin Finance Journal from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().