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This paper identified the ṣukūk structure suitable for deficit financing during the COVID-19 crisis. The study also explored the relevant Sharīʿah contracts that could be utilized to issue ṣukūk that is suitable for various jurisdictions and corporations in handling deficit financing during the COVID-19 crisis.

The authors have adopted a qualitative research approach in which primary and secondary sources available on the subject were reviewed, especially a number of cases related to ṣukūk structures prior to and during the COVID-19 crisis and analyzed their performances and drawn their conclusions.

The outcome of this paper suggests that certain ṣukūk structures used during the COVID-19 crisis aimed primarily at financing deficit have been successful. Furthermore, these ṣukūk structures are relied very much on the obligator’s/issuer’s cash flow position. It has been revealed that if the ṣukūk is structured on equity-based contracts with lower repayment amount or no payment, it would not trigger default because the nature of this ṣukūk is the sharing of profit and loss, in accordance with a Sharīʿah rule that there will be compensation for any loss only if deliberate and notable negligence is proven. However, if it is debt based or ijarah and wakalah contracts, then the payment to ṣukūk holders ought to be made as agreed and if not, it will trigger default. This payment is to be made from the cash flow of the issuer and if there is an issue in the cash flow of the issuer due to COVID-19, consent from the ṣukūk holders needs to be obtained to reschedule payment as found in the case of the Garuda Indonesia ṣukūk. However, as found in MASB’s IMTN ṣukūk case, if the cash flow of the company is good, then the chances of default are very slim. However, so far, three new ṣukūk in the middle of COVID-19 were issued, one by a corporation and two issued by a sovereign, one of which addresses the liquidity issues during the pandemic, and all these proved that ṣukūk is definitely a viable alternative mode for deficit financing and a reliable option during the COVID-19 pandemic.

This paper looked into the ṣukūk structure, especially the ṣukūk which are yet to mature and the new ṣukūk issued during the crisis caused by the COVID-19 pandemic.

It is anticipated that the outcome of this research will assist the stakeholders in ṣukūk markets to understand the ṣukūk impact on COVID-19 related deficit financing and suggest various structures that could be utilized in the ṣukūk market in an unprecedented situation such as the COVID-19 economic distress.

Looking at the social aspect of ṣukūk markets, this paper has endeavored to provide solutions to the financing of deficit for social well-being as a tool to provide relief and social stability in the lives of the people.

The novel COVID-19 pandemic has caused unprecedented economic difficulties and market distress on a global scale; and this research sought to identify the relevant ṣukūk structures to be used for deficit financing during the pandemic crisis, especially the ṣukūk which are yet to mature and new ṣukūk issued during the pandemic crisis. The former includes HDFC Muḍārabah ṣukūk (2019) Maldives and MAHB ṣukūk/IMTN program (2010) Malaysia, while the latter includes IsDB Trust Certificates, Phase 2 of the tranches (2020), the Federal Government of Nigeria Road ṣukūk (May, 2020) and Sharj’ah Government two billion Dirham ṣukūk (June, 2020).

This paper aims to explore issues arising from ṣukūk (Islamic bonds) on blockchain, including Sharīʾah (Islamic law) and legal matters.

A qualitative methodology is used in conducting this research where relevant literature on ṣukūk was reviewed. Through a doctrinal approach, the paper presents analyses on the practice of ṣukūk and ṣukūk on blockchain by discussing its legal, Sharīʾah and regulatory issues. This culminates in a conceptual analysis of blockchain ṣukūk and its peculiar challenges.

This paper reveals that digitizing ṣukūk issuance through blockchain remedies certain inefficiencies associated with ṣukūk transactions. Indeed, structuring ṣukūk on a blockchain platform can increase transparency of underlying ṣukūk assets and cash flows in addition to reducing costs and the number of intermediaries in ṣukūk transactions. The paper likewise brings to light legal, regulatory, Sharīʾah and cyber risks associated with ṣukūk on blockchain that confront investors, practitioners and regulators. This calls for deeper collaboration in research among Sharīʾah scholars, lawyers, regulators and information technology experts.

As a pioneering subject, the paper notes the prospects of blockchain ṣukūk and the current dearth of literature on it. The paper would assist relevant Islamic capital market entities and authorities to determine the potential and impact of blockchain ṣukūk in their respective businesses and the financial system.

Blockchain ṣukūk will assist in addressing issues inherent in classical ṣukūk and in paving the way to innovative solutions that will facilitate and enhance the quality of ṣukūk transactions. For that, ṣukūk would require appropriate regulatory technology to address its governance and regulation peculiarities.

Integrating ṣukūk with blockchain technology will add value to it. The paper advances the idea that blockchain ṣukūk revolutionises ṣukūk and enhances its practice against known inadequacies.

This paper aims to explain the relationship between sukuk market and economic growth. In this context, the study investigates the impact of sukuk market development on economic growth for nine countries (Brunei, Indonesia, Jordan, Kuwait, Malaysia, Nigeria, Saudi Arabia, Pakistan and Turkey) which have Islamic finance and banking system.

The study analyzed the data of nine countries as Brunei, Indonesia, Jordan, Kuwait, Malaysia, Nigeria, Saudi Arabia, Pakistan and Turkey for periods between 2014Q1 and 2017Q4. As a part of gross domestic product, total sukuk export measured by the sukuk market and the sukuk density which was considered as annual sukuk export per country were used to determine sukuk market development. Inflation, trade deficit and financial stress series were used as control variables.

It was determined that there was a long-term cointegrated relationship between sukuk market development and economic growth. Sukuk volume and sukuk density had a positive effect on growth in the long run. One unit increase in sukuk volume increased growth by 0.5%, while increase in sukuk density increased growth by 1.7%. According to short-term relationships, it was seen that sukuk variables did not have an effect on growth. However, sukuk exports contributed positively to growth rates in the long run.

The findings of this study are limited with nine countries (Brunei, Indonesia, Jordan, Kuwait, Malaysia, Nigeria, Saudi Arabia, Pakistan and Turkey). Also, the accessible data of sukuk market was used and the periods of 2014Q1–2017Q4 was analyzed in a study. Accordingly, future studies can find different results for different countries which has Islamic finance and banking system for different periods in the global market.

This study provides empirical findings to the related literature, and it proves that sukuk market development contributes positively to the economic growth of countries including Islamic finance and banking system in the long run.

This study aims to identify the factors that influence the willingness of Bangladeshi retail investors to invest in ṣukūk.

The authors surveyed Bangladeshi retail investors using a structured questionnaire to understand their perspectives on potential investment in ṣukūk. The authors considered the behavioral aspects of retail investors and the desired ṣukūk features to analyze the demand side. Factors and regression analyses were performed to identify the persuading factors.

The results indicate that investor awareness is a fundamental factor in potential investments in ṣukūk. Investors perceive the security represented by government and third-party guarantees as a persuasive feature of ṣukūk. The tradability and tenor of ṣukūk also affect the investment intention. Sharīʿah consciousness of the investors also plays a significant role in their investment decisions.

One limitation of this study is that it incorporates potential individual investors only, and precludes institutional investors. In the future, there is scope for research to explore the demand factors impacting institutional investors of ṣukūk in Bangladesh.

The authors expect that the study will aid policymakers and ṣukūk issuers in crafting strategies to cater to the needs of Bangladeshi retail investors.

This study is the earliest research conducted in Bangladesh to determine the factors impacting the willingness of individual investors to make their potential investments in ṣukūk. To the best of the authors' knowledge, no study has analyzed the desired ṣukūk features from the perspective of Bangladeshi retail investors.

This study aims to evaluate cognitive, personal and environmental factors affecting investors’ behavioral intentions (BI) to invest in ṣukūk (Islamic investment certificates) in Pakistan.

Data from 462 participants were collected through survey-questionnaires by using the convenient sampling technique. Hypothesized proposed relationships among the constructs were examined by applying the structural equation modeling (SEM) technique through smart partial least squares.

Compatibility, internal influence, external influence and intrinsic motivation were found to be significant predictors of investors’ BI to invest in ṣukūk. In addition, it was found that the religious aspect not only affects investors’ BI positively but also works as a moderator in the relationships between BI and both internal and external influence.

The results are quite helpful for ṣukūk issuers and regulators to consider cognitive, personal and environmental factors that might enhance the adoption of ṣukūk, especially among Muslim investors.

This study is among the few research studies that shed light on investors’ BI to invest in ṣukūk. Using social cognitive theory, the study investigates the cognitive, personal and environmental factors influencing ṣukūk adoption, which were previously unexplored. In addition, this is the first study that unveils the influential factors of ṣukūk adoption in Pakistan, a Muslim-majority country.

The purpose of this paper is to elucidate the concept of ḍamān al-milkiyyah (ownership risk) and to assess its application in contemporary Islamic financial products and services.

The methodology adopted is that of descriptive research.

From an Islamic law of contract perspective, the concept of ḍamān al-milkiyyah is central to legitimate profit-making transactions and hence must be adhered to in practical applications of Islamic finance.

This study should help motivate further investigation into the position of ḍamān al-milkiyyah among different parties in existing Islamic financial products and services.

Policymakers and regulators should ensure that Islamic financial products and services are structured in a way that does not allow parties to profit without adequately bearing the liability for potential loss.

The condition of ḍamān al-milkiyyah as a source of legitimate profit reflects the idea that the role of finance in Islam is to promote and ensure social benefits.

This paper emphasizes the importance of ḍamān al-milkiyyah as a fundamental condition for profit in Islamic financial transactions.

This paper focuses on Ṣukūk issuance determinants in Gulf Cooperation Council (GCC) countries. Given the dual characteristic of debt and equity of Ṣukūk as well as their unique benefits of social responsibility, the author questions whether the theories of capital structure, the trade-off and the pecking order are able to well explain the Ṣukūk issuance.

First, the author verifies these theories using capital structure determinants and regresses the Ṣukūk change on these determinants. Second, the author tests the trade-off theory with the target debt model and third, verifies the pecking order theory using the fund flow deficit model.

The empirical results show that capital structure determinants fail to explain both theories. The author confirms that the Ṣukūk change is significatively linked to the deviation from a Ṣukūk target. So, issuing firms balance the marginal costs of Ṣukūk and their benefits of religiosity and social responsibility toward a target debt. The author finds no evidence of the pecking order theory.

This study contributes to corporate finance theory and corporate social responsibility. It verifies if capital structure theories proved in conventional financing can well explain Islamic bonds issuance given their social responsibility benefits.

Managers and investors would pay attention to the social factors explaining Ṣukūk issuance in their finance and investment decisions. They would be enhanced to use this financing tool knowing its social unique benefits. This also should encourage governments to enhance this socially responsible financing. Rating agencies would be motivated to evaluate Ṣukūk and firms would improve the quality and relevance of disclosure to get the best rating.

The author highlights the social factors explaining Ṣukūk issuance and enhances corporate social responsibility (CSR).

The author extends the few literature testing capital structure theories for Islamic bonds and highlights the specific social responsible features of Ṣukūk that would bridge their issuance to capital structure theories. So the author enhances the concept of Islamic CSR. Tying capital structure theories to CSR would also help developing Islamic finance theory as a unique social responsible framework.

This paper aims to investigate empirically whether Sukuk financing is boosting the economic growth in Southeast Asia within the framework of the endogenous growth model.

This paper applied dynamic panel one-step system generalized method of moments as an optimal estimation approach to investigate the impact of Sukuk financing on economic growth in Southeast Asia spanning from 2013Q4–2019Q3. Sukuk financing was proxied by the total issued Sukuk holdings, while economic growth was proxied by gross domestic product. The sample covered all full-fledged Islamic financial institutions in the most developed Sukuk financial markets countries in Southeast Asia (Malaysia, Indonesia and Brunei).

The findings demonstrated that Sukuk financing is boosting economic growth in Southeast Asia, which reflects the significant role of the Islamic financial markets of Sukuk as a vital contributor to economic growth.

This paper would fill the literature by investigating the link between Sukuk financing and economic growth in Southeast Asia within the framework of the endogenous growth model, as the outcome of this paper serves as a guide for financial researchers, decision-makers and policymakers to improve the Sukuk market globally as an alternative financing source for the best contribution to economic growth.

This paper is the first that investigates empirically the link between Sukuk financing and economic growth in Southeast Asia with a new theoretical context of the endogenous growth model to gain robust information about this link.

The purpose of this paper is to explore the effects of the capital market on economic growth by considering the role of ṣukūk (Islamic investment certificates) and other capital market sub-components in Malaysia between 1998 and 2018.

The empirical investigation is based on the autoregressive distributed lag (ARDL) cointegration bounds test.

The results reveal the prevalence of a long-run equilibrium relationship between capital market variables and economic growth. As expected, bond market components (ṣukūk and conventional bonds) have a positive, albeit insignificant influence on economic growth. In contrast, in the long-term, stock market development – regardless of the indicator used on economic growth – is shown to have a significant and positive effect. The study suggests that stock market sub-components affect Malaysia’s economic growth the most.

The primary limitation of this study is that only corporate ṣukūk were considered, while government ṣukūk were excluded from the estimation due to a lack of requisite information, resources and data.

A strategic framework should be established, especially in pricing efficiencies. Furthermore, there is a need to create more awareness on the benefits of ṣukūk investment among conventional bond investors, including retail investors. Thus, there will be more players in the ṣukūk market, and this will help to improve market liquidity.

Apart from conventional capital market sub-components, this study takes into account ṣukūk as a sub-component in the capital market on economic growth using the ARDL framework. Also, this study particularly concentrates on the world’s largest ṣukūk issuer, Malaysia, rather than focusing on other ṣukūk-issuing countries.

The objectives of this paper are two-fold: first, to empirically compare and contrast the salient features of three financial instruments (FIs), namely sustainable and responsible investment (SRI) ṣukūk, social impact bonds (SIBs) and conventional bonds (CBs) and second, to examine the differences between the perceptions of the investors and the developers on the features of the three FIs.

Using a questionnaire survey, 251 completed and useable responses were received, representing a 42.54% response rate. In examining the differences and similarities in the characteristics of the three FIs, the inferential statistical of frequency and percentage were used. Wilcoxon and Mann–Whitney tests were conducted to investigate the differences in the salient features of the three FIs and the differences between the investors and developers' perceptions on the salient features of SRI ṣukūk, SIBs and CBs, respectively.

The results reveal that stakeholders view SRI ṣukūk, SIBs and CBs to be statistically significantly different from each other. This shows that stakeholders do not view SRI ṣukūk as “old wine in a new Sharīʿah-compliant bottle” but instead considered different from SIBs and CBs. Furthermore, stakeholders also differentiate between SIBs and CBs.

The paper provides empirical evidence that Islamic finance (IF) instrument, represented by SRI ṣukūk, is viewed as different instruments to conventional tools, represented by SIBs and CBs. First, it debunks the notion that IF is viewed as similar to its conventional counterpart. Second, SIBs are seen as different from CBs, illustrating the distinct categorisation of impact investing instruments. As such, third, the development of SRI ṣukūk and SIBs can provide diversification to portfolios as it is a unique instrument in the social finance and financial market.