Sukuk and macroeconomic variables: empirical evidence from panel data

• Main Author: Sumarli, Dian Faqih
• Format: Thesis
• Language: English; English
• Published: 2016
• Subjects: HG Finance
• Online Access: https://etd.uum.edu.my/7557/1/s817743_01.pdf; https://etd.uum.edu.my/7557/2/s817743_02.pdf; https://etd.uum.edu.my/7557/

Sukuk can be referred to a certificate with the same value that represents the ownership of tangible assets, benefits and services, asset ownership over projects or investment activities. The Islamic capital market, particularly sukuk has a prime role to the development of Islamic finance into a mainstream force in the global banking and finance industry. The purpose of this study was attempted to test the relationship of sukuk and macroeconomic variables namely; GDP per Capita, Population and Foreign Direct Investment. The study conducted from seven selected Islamic countries such as Malaysia, Indonesia, Saudi Arabia, United Arab Emirates, Turkey, Bahrain and Sudan for the period of 2000-2015 using the panel data approach. The fixed effect model was employed to analyze the relationship of those variables. The findings of this study showed that there is a positive and significant relationship between sukuk issuance and economic growth, which implied that the higher level of sukuk issuance, the more the contribution to the economic growth. The results are consistent with the theory Harrod-Domar, where investment is an important aspect of economic growth. Furthermore, the study found that there is a positive and significant relationship between the population and sukuk issuance. In addition, the major implication of the findings is that sukuk are becoming important financing instruments in the capital market.