EconPapers    
Economics at your fingertips  
 

Why do companies issue sukuk?

Paul-Olivier Klein and Laurent Weill

Review of Financial Economics, 2016, vol. 31, issue C, 26-33

Abstract: This paper investigates the determinants for firms to choose sukuk over conventional bond. We investigate the potential impact of information asymmetries through moral hazard and adverse selection to explain why firms prefer using sukuk. We perform logit regressions of the choice of debt type to determine which characteristics lead a firm to issue a sukuk rather than a bond. We use a dataset of sukuk and conventional bond issuances in Malaysia from 2004 to 2013. We find evidence of the influence of information asymmetries and adverse selection on the choice of the sukuk market.

Keywords: Financial instruments; Islamic finance; Debt issuance; Emerging countries (search for similar items in EconPapers)
JEL-codes: G14 P51 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1058330015300343
Full text for ScienceDirect subscribers only

Related works:
Journal Article: Why do companies issue sukuk? (2016) Downloads
Working Paper: Why Do Companies Issue Sukuk? (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:revfin:v:31:y:2016:i:c:p:26-33

DOI: 10.1016/j.rfe.2016.05.003

Access Statistics for this article

Review of Financial Economics is currently edited by T. K. Mukherjee and G. Whitney

More articles in Review of Financial Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2024-02-12
Handle: RePEc:eee:revfin:v:31:y:2016:i:c:p:26-33