Which firms do prefer Islamic debt? An analysis and evidence from global sukuk and bonds issuing firms

Md Hamid Uddin, Sarkar Kabir, Mohammed Hossain, Nor Wahab, Jia Liu

Research output: Contribution to journalArticlepeer-review

10 Citations (Scopus)
266 Downloads (Pure)


The Islamic debt instrument sukuk has been in the market for two decades; still, we do not know why a firm prefers an Islamic debt over conventional debt, set aside religiosity issue. We argue there is a genuine reason to choose Islamic debt because it has lighter indebtedness, benefits of avoiding external monitoring, and tax incentives. Based on the cross-country data for 346 firms issuing dollar-denominated global sukuk and bonds, we find that firms that prefer Islamic debt and issue sukuk are financially more unstable, and thus exposing to higher insolvency risk as compared to bond issuing firms.

Original languageEnglish
Article number100712
Pages (from-to)(In-Press)
JournalEmerging Markets Review
Early online date7 Jun 2020
Publication statusPublished - Sept 2020

Bibliographical note

NOTICE: this is the author’s version of a work that was accepted for publication in Emerging Markets Review. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Emerging Markets Review, 44 (2020) DOI:10.1016/j.ememar.2020.100712

© 2020, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/


  • Bond
  • Debt market barrier
  • Insolvency risk
  • Islamic debt
  • Sukuk

ASJC Scopus subject areas

  • Business and International Management
  • Economics and Econometrics


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