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The purpose of this paper is to examine the applicability of Preference Similarity Theory (PST) and Protection Motivation Theory (PMT) in identifying the target audience and developing effective marketing strategies, particularly in non-Muslim countries, to increase the market growth and reach of sukuk to broader investor groups and provide recommendations for such strategies.

After separately examining the effects of PST and PMT on marketing sukuk, recommendations are presented from a shared perspective of these two theories.

The findings of this study suggest that understanding the values, beliefs and perceptions of potential investors is crucial for effectively marketing sukuk investments, especially in non-Muslim countries. The PST and PMT provide useful frameworks for tailoring sukuk offerings and communicating effectively about the risks and benefits of sukuk investments to attract investors who identify with the values and beliefs embodied in sukuk.

To the best of the author's knowledge, this is the first paper to examine the marketing of sukuk in non-Muslim countries. This study is also the first paper to discuss sukuk in the context of PST and PMT. In addition, this study is expected to guide banks in the marketing of sukuk.

This study aims to provide one of the first empirical examinations of the liquidity conditions in the international sukuk market. It also provides evidence on how those differences have changed over time.

The study uses propensity score matching in combination with two price-based liquidity measures, bid-ask and high-low spreads, to compare the liquidity conditions of international sukuk issuances with similar international conventional bonds.

The results confirm that sukuk issuances are significantly less liquid than their conventional equivalents. The results also show that this difference in liquidity is more prominent in the case of corporate issuances. Finally, the analysis shows a general decline in these liquidity differences over time as the sukuk market matures and as more investors and issuers enter the market.

The study addresses the gap in the literature regarding the absence of an empirical examination of the liquidity conditions in the international sukuk market. The findings of this study also suggest that prior empirical findings regarding the diversification benefits offered by sukuk are likely to be driven by the lack of liquidity in the sukuk market rather than underlying economic factors.

Both developed and developing countries, Muslim and non-Muslim, have been showing keen interest in sukuk financing. This interest was because of the lesson learned by both Asian and non-Asian economies that having a developed capital market is very essential to enable an economy resilient to the financial crisis. Therefore, this study aims to produce theoretical relationships and identify empirical support for the determinants of sukuk market development.

By using panel data analysis, the study covers the period from 1993 until 2017, and includes 13 sukuk issuing economies as per the availability of data.

The findings of the study revealed that the stage of economic development, banking system, money supply and current account balance are positively associated with sukuk market. Interestingly, economic size and exports appear to be negatively associated with sukuk.

To flourish the domestic sukuk market, authorities need to strengthen the existing financial system and economic development.

The study contributes in a limited body of knowledge on determinants of sukuk market development by exploring novel determining factors of foreign capital inflows as well as macroeconomic and financial factors.

The purpose of this paper is to examine the opportunities of Islamic finance in spurring economic development in Tunisia after the revolution of 2011. Precisely, this paper seeks to explore whether the Islamic banks-Sukuk markets relationships are more conducive of economic growth.

This work reviews the role of Islamic finance in economic development, examines the current dominance of Islamic banks on the saving-investment process and compares it with a situation characterized by a more important implication of banks in the Sukuk markets both as issuers and buyers.

This paper finds that the “marketable Islamic intermediation” provides easily more funds to finance the economic development and solve the problems of poverty and unemployment. It also reveals that Islamic intermediation can be improved by a more important implication of banks in the Sukuk markets. This permits to overcome many problems related to saving mobilization, bank liquidity management, risk taking and long-run investment.

The author's recommendations related to the economic policy suggest strict rules to establish accountability, disclosure laws and transparency in Tunisia.

This paper is a first attempt to study the role of the relationships between Islamic banks and Sukuk markets in the economic development process. It stresses the importance of these relationships to better meet the requirements of development financing in Tunisia.

This study aims to find whether sukuk (Islamic bonds) possess a safe haven property for investors or not.

To analyze this statement, the study used data from MSCI World conventional and MSCI World Islamic indices from August 17, 2012 to June 8, 2022. The study used the generalized autoregressive conditional heteroskedasticity (GARCH) variance technique, the most common technique used in stock data analysis.

The results dictate the absence of sukuk as a safe haven for investors as both the conventional and Islamic markets show decoupling behavior. The study finds concrete evidence of a strong association between the debt-based bond market and the Islamic sukuk market. As these markets mostly like to move in a parallel direction, a recession in a conventional bond market likely means a recession in the Islamic sukuk market.

This study is unique in incorporating the MSCI World Islamic Index and other Islamic indices of several Muslim countries, which was absent in previous research. Second, this study is unique because it adds a separate regression for the COVID era to show whether the movement of indices changed during regression.

This study aims to examine the impacts of global geopolitical risks (GPRs) and COVID-19 pandemic stringency on the size of Sukuk issuance in Malaysia.

To examine the issue, this paper collected yearly data for the Sukuk issuance from the DataStream, and the rest of the variables, including the control variables from the World Bank, were from 2018 to 2022. Several econometric approaches have been used, that is, ordinary least square (OLS), two-stage least squares (2SLS) and generalized method of moment (GMM) with fixed effects and random effects in examining the impacts.

The results demonstrate that global GPRs negatively impact the size of Sukuk issuance due to the investment risk during the high global geopolitical conflicts, war and rampant terrorism. Besides, the COVID-19 pandemic-related stringency also similarly affects the country's Sukuk issuance market because of the long-time lockdown measures, border closures, travel restrictions and low access to the market. The control variables also demonstrate similar results except for the gross domestic products, which shows positive and significant impacts on the Sukuk market of Malaysia.

The study's policy implications for Sukuk investors and issuers stress the importance of disclosing risk mitigation procedures, strengthening the regulatory framework and raising investor knowledge to attract and protect investors in the Sukuk sector.

The purpose of this study is to empirically investigate the asymmetric effects of financial risk on Sukuk market development for a sample of Malaysian countries over the period of 2010–2021.

This study refers to the International Country Risk Guide (ICRG) in determining the financial risk factors to be studied in addition to the Malaysia financial stress index (FSI) to capture changes in financial risk level. The authors use the nonlinear autoregressive distributed lag (NARDL) model to tackle the nonlinear relationships between identified financial risk variables and Sukuk market development.

The results suggest the existence of a long-run relationship between foreign debt service stability, international liquidity stability (ILS), exchange rate stability (ERS) and financial stress level with the Sukuk market development in Malaysia. Indeed, higher ILS and ERS will boost Sukuk market size, whereas higher foreign debt services and financial stress are negatively related to Sukuk market development. Findings also indicate that the long-run positive and negative impacts of identified financial risk components on Sukuk market development are statistically different. Taking into account the role of the Sukuk market in facilitating Malaysia’s economic growth, the country should aim to keep the foreign debt-to-GDP ratio at a sustainable level.

This study points to three possible directions for future research. The first is the differential impact of financial risk components on Sukuk issuance for different Sukuk structures. As more data becomes available in the future, this area could be further explored by conducting the above analysis for different combinations of Sukuk structures and currency denominations. In addition, future researchers could also consider exploring the variability of financial risk impacts through comparative studies of the leading Sukuk-issuing countries to account for differences in regulatory frameworks and supporting infrastructure.

This study provides valuable practical and policy implications for strengthening the growth of the Sukuk market. While benefiting from the diversification benefits of funding sources to finance private or government projects and developments, Malaysia should remain vigilant to global economic conditions, foreign exchange markets and financial stress levels, as all of these factors may significantly influence investor sentiment and the rate of return offered by Sukuk issuance.

The use of the NARDL approach, which investigates the long-run effects of financial risk factors on Sukuk market development in Malaysia, makes this study a valuable addition to the literature, as there has been little research into the asymmetric effects of those variables on Sukuk market development using samples from emerging Asian markets.

This study aims to examine the fiscal policy drivers of sovereign sukuk market development in selected Organization of Islamic Cooperation (OIC) countries. Specifically, the research aims to analyze the effects of fiscal deficit, public debt and government expenditure on sovereign sukuk market development, while controlling for macroeconomic and financial factors.

The sample consists of eight OIC member countries that play active role in the global sukuk market which include Saudi Arabia, United Arab Emirates, Malaysia, Indonesia, Qatar, Pakistan, Turkey and Sudan. In addition, the study covers a period of 10 years spanning between 2011 and 2020. Similarly, the study uses three models, namely, random effect, generalized least square and system generalized method of moments panel models. To check for the robustness of the results, the study replaces current values of fiscal policy variables with one-year lagged values.

The findings establish that fiscal policy variables significantly influence the development of sovereign sukuk markets. Specifically, public debt is a significant fiscal variable that promotes sovereign sukuk market development, while fiscal deficit has a negative effect on the development of sovereign sukuk market. However, the findings suggest that government expenditure does not influence sovereign sukuk issuance in the OIC member countries.

The study is significant to both investors and regulators in the sukuk market because it attempts to spotlight the importance of sound fiscal climate in developing sovereign sukuk market. Public debt is a facilitator, whereas fiscal deficit appears to be a constraint. Therefore, policymakers should determine the optimal mix of public debt and fiscal deficit in designing policies that promote sukuk market development.

The novelty of the study is its focus on the role of fiscal policy variables in facilitating sovereign sukuk market development. The study systematically establishes the link between fiscal policy and sovereign sukuk market in the OIC countries. Previous empirical studies focus extensively on the effects of macroeconomic, financial and institutional factors on sukuk market development.

The purpose of this paper is to examine the connectedness across a variety of Sukuk and conventional bond indices and the implications for optimal asset allocation for the period January 1, 2010–April 30, 2020.

The data set consists of five major Sukuk (Dow Jones Sukuk, Thompson Reuters BPA Malaysia Sukuk, Indonesia Government Sukuk, S&P MENA Sukuk and Tadawul Sukuk and Bonds Index) and five conventional bond indexes, one for developed (USA) and four for emerging markets (Malaysia, Indonesia, Africa and Qatar). This study investigates the connectedness and volatility spillover effects across the aforementioned indices, by following the Diebold and Yilmaz (2012) approach, based on the time-varying parameter vector autoregressive (TVP-VAR) model. In addition, this paper provides optimal hedge ratios and portfolio weights for investors.

The empirical results show that Sukuk and conventional bond markets are highly integrated and that total connectedness exhibits sensitivity to exogenous shocks. The Dow Jones and the Malaysian Sukuk indices are the primary shock transmitters to other markets. However, the weak volatility spillovers between the Dow Jones and conventional bonds suggest that opportunities for optimal asset allocation may in fact exist. The highest (lowest) hedging effectiveness can be achieved by taking a short position in Malaysian (Qatarian) bonds.

To the best of the knowledge, this is the largest sample taken into account to investigate the connectedness between Sukuk and conventional bonds.

The global sukuk market has seen widespread innovations in the last couple of decades, which helped sukuk develop into one of the most acceptable Islamic instruments for raising finance. According to the State of the Global Islamic Economy Report (2018–19), United Arab Emirates (UAE) is ranked second among Islamic economies and Nasdaq Dubai is credited to be the leading international center for sukuk listings (Thomson Reuters, 2018). However, there has been limited research studies on this financing option within the region. To the best of the authors’ knowledge, this study is the first to focus on the role of signaling theory driving the financing choice for listed entities in the UAE. The paper aims to make a significant contribution in light of the recent expansion of sukuk issuances and fills the lacuna in research carried out in the UAE bond market.

This study empirically tested the hypotheses on a data set that covered a sample of 1,354 bond issuances over the period 2008–2019. The authors used logistic regression to distinguish between the issuance of sukuk versus conventional bond. Sukuk structuration leads to information asymmetry that prompts firms to send signals to the capital market. Information asymmetry has been studied in terms of issue-specific (maturity and issue size) and issuer-specific (firm size, growth, profitability, leverage) variables. Two control variables were included to capture the years under study and the macroeconomic effects of economic slowdown.

The banking sector accounted for 93% of bond issuances but contributed only 63% of the bond market in the UAE in terms of issue size. The data evidenced that non-banking sukuk issuances expanded over the years, with participation from sectors like real estate, oil and gas, logistics and utilities and contributed 50% of issuances in the UAE sukuk market. Typically, firms with smaller asset sizes and higher financing requirements were found to favour sukuk. The banking sector revealed irrelevance of information asymmetry, as Islamic Banks were mandated to issue sukuk. Non-financial firms with high profits and high debts were prompted to prefer conventional bonds, in line with the adverse selection mechanism.

Although UAE’s sukuk market has existed for more than a decade, scant research has been carried out. Few studies exist for the GCC region that either concentrated on stock market reactions to issuances of Islamic versus conventional bonds or studied capital market characteristics of non-financial entities alone. This is the first study to focus on signaling theory and information asymmetry playing a role in the capital structure of all listed firms (banking and non-banking) issuing bonds in the UAE.