Does corporate social sustainability influence on business environment? Impact of corporate governance on distance to default of Sukuk issuers in Islamic banks

Xintong Li, Awais Ur Rehman, Smaranda Toma, Mohammad Jaradat, Xinyu Lv, Daniela Melania Mihai, Adina Eleonora Spinu and Malik Shahzad Shabbir

International Review of Economics & Finance, 2024, vol. 93, issue PA, 520-528

Abstract: Malaysia has emerged as a global hub for Sukuk. But on the parallel, the Malaysian sukuk market has undergone many defaults and facing massive competitive pressure. In this scenario, the precautionary tools to mitigate the default risk must be explored. This study analyzed the impact of corporate governance (CG) on corporate social sustainability (CS) and the distance to default of Sukuk issuers (DD) to investigate the mitigating effect of these variables and the mediating role of CS. The results are robust across alternative measures for the variables and robust against different econometric tests. The implication of this study encouraged the inclusion of female directors and their empowerment due to their positive impact on DD and CS.

Keywords: Sukuk; Distance to default; Credit risk; Corporate governance; Corporate social sustainability (search for similar items in EconPapers)
JEL-codes: D11 E47 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:93:y:2024:i:pa:p:520-528

DOI: 10.1016/j.iref.2024.03.002

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