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.
| Original language | English |
|---|---|
| Pages (from-to) | 26-33 |
| Number of pages | 8 |
| Journal | Review of Financial Economics |
| Volume | 31 |
| DOIs | |
| Publication status | Published - 1 Nov 2016 |
| Externally published | Yes |
Free Keywords
- Debt issuance
- Emerging countries
- Financial instruments
- Islamic finance
ASJC Scopus subject areas
- Finance
- Economics and Econometrics
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