The role of ownership and governance mechanism in Sukuk Financing by Malaysian firms : An application of a double selection model
Joint Authors
Ashraf, Dawud
Rizwan, Muhammad Suhayl
Azmat, Sad
Source
Islamic Research and Training Institute
Issue
Vol. 2018, Issue 2-6 (31 Dec. 2018)45 p.
Publisher
Islamic Development Bank (IDB) Islamic Research and Training Institute (IRTI)
Publication Date
2018-12-31
Country of Publication
Saudi Arabia
No. of Pages
45
Main Subjects
Abstract EN
After controlling for the double selection bias in a sequential three-equation model of the decisions to issuance, to choose a Sukuk structure, and the volume of Sukuk engagements, we find robust evidence suggesting that ownership structure and governance mechanisms play a significant role in controlling agency costs through issuance of Sukuk.
In line with monitoring hypothesis, we find that higher government ownership positively influences the decisions to participate, issue a debt-like Sukuk and volume thereof.
Similarly, in line with complementarity hypothesis, the empirical evidence suggests that firms with higher board of directors’ independence are more likely to participate in issuing Sukuk with higher volumes.
We also find that ethnicity, in the form of a higher proportion of Malay/Muslim members on the board of directors, does not influence the initial decision on whether or not to issue Sukuk.
However, once the decision to issue Sukuk is made, firms with higher institutional ownership or a higher proportion of Malay/Muslim board members are more likely to issue equity-like Sukuk.
American Psychological Association (APA)
Ashraf, Dawud& Rizwan, Muhammad Suhayl& Azmat, Sad. 2018. The role of ownership and governance mechanism in Sukuk Financing by Malaysian firms : An application of a double selection model. Islamic Research and Training Institute،Vol. 2018, no. 2-6.
https://search.emarefa.net/detail/BIM-832835
Modern Language Association (MLA)
Ashraf, Dawud…[et al.]. The role of ownership and governance mechanism in Sukuk Financing by Malaysian firms : An application of a double selection model. Islamic Research and Training Institute No. 2-6 (2018).
https://search.emarefa.net/detail/BIM-832835
American Medical Association (AMA)
Ashraf, Dawud& Rizwan, Muhammad Suhayl& Azmat, Sad. The role of ownership and governance mechanism in Sukuk Financing by Malaysian firms : An application of a double selection model. Islamic Research and Training Institute. 2018. Vol. 2018, no. 2-6.
https://search.emarefa.net/detail/BIM-832835
Data Type
Journal Articles
Language
English
Notes
General Note.
Record ID
BIM-832835