Factors affecting sukuk market development: empirical evidence from sukuk issuing economies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ameenullah Aman ◽  
Asmadi Mohamed Naim ◽  
Mohamad Yazid Isa ◽  
Syed Emad Azhar Ali
Keyword(s):  
Economic Development ◽  
Panel Data Analysis ◽  
Banking System ◽  
Empirical Support ◽  
Capital Inflows ◽  
Market Development ◽  
Current Account Balance ◽  
Content Type ◽  
Factors Affecting ◽  
Foreign Capital Inflows

Purpose 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. Design/methodology/approach 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. Findings 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. Practical implications To flourish the domestic sukuk market, authorities need to strengthen the existing financial system and economic development. Originality/value 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.

scholarly journals What Determines Sukuk Market Development? New Theoretical Insights

2019 ◽  
Vol 7 (1) ◽  
pp. 021 ◽  
Author(s):  
Ameen Ullah Aman ◽  
Asmadi Mohamed Naim ◽  
Mohamad Yazid Isa
Keyword(s):  
Banking System ◽  
Capital Inflows ◽  
Market Development ◽  
Bond Markets ◽  
Corporate Financing ◽  
Academic Literature ◽  
Financial Variables ◽  
Determining Factors ◽  
Foreign Capital Inflows ◽  
Conceptual Study

In recent past, the Asian economies faced various financial crises, 1997 & 2008, because of underdeveloped or small capital markets. Most of the countries continued to heavily depend on the mere banking system for sovereign and corporate financing needs which made the region repeatedly vulnerable to the crises state. Therefore, the last decade has witnessed the remarkable growth in the alternative arrangement in the form sukuk and bond markets. The academic literature on the topic mainly focuses on bond market ignoring largely the determinants of sukuk market. Using content analysis approach, this conceptual study proposes the theoretical relationships of sukuk with some new possible determining factors along with some other factors which have not received enough attention in the literature. The study focuses on the dynamics of foreign capital inflows, macroeconomic and financial variables with respect to sukuk market development.

Foreign capital inflows and economic growth: the experience of low-income countries in Sub Saharan Africa

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Atif Awad
Keyword(s):  
Low Income ◽  
Foreign Capital ◽  
Ordinary Least Squares ◽  
Capital Inflows ◽  
Sub Saharan Africa ◽  
Low Income Countries ◽  
Content Type ◽  
Long Run ◽  
Foreign Capital Inflows ◽  
The Impact

Purpose This paper aims to investigate the long-run impact of selected foreign capital inflows, including aid, remittances, foreign direct investment (FDI), trade and debt, on the economic growth of 21 low-income countries in the Sub Saharan Africa (SSA) region, during the period 1990–2018. Design/methodology/approach To obtain this objective and for robust analysis, a parametric approach, which was dynamic ordinary least squares, and a non-parametric technique, which was fully modified ordinary least squares, were used. Findings The results of both models confirmed that, in the long run, trade and aid affected the growth rate of the per capita income in these countries in a positive way. However, external debt seemed to have an adverse influence on such growth. Originality/value First, this is the initial study that has addressed this matter across a homogenous group of countries in the SSA region. Second, while most of the previous studies regarding capital inflows into the SSA region have focused on the impact of only one or two aspects of such foreign capital inflows on growth, the present study, instead, examined the impact of five types of foreign capital inflows (aid, remittances, FDI, trade and debt).

scholarly journals An Empirical Investigation on Foreign Capital Inflows and Economic Development in Nigeria

2020 ◽  
pp. 63-76
Author(s):  
G. Tunde, Monogbe ◽  
J. Emeka, Okereke ◽  
P. Ebele, Ifionu
Keyword(s):  
Economic Development ◽  
Foreign Direct Investment ◽  
Capital Flows ◽  
Direct Investment ◽  
Foreign Capital ◽  
Capital Inflows ◽  
Portfolio Investment ◽  
Foreign Portfolio Investment ◽  
Foreign Capital Flows ◽  
Foreign Capital Inflows

In an attempt to attained sustainable level of economic development in a nation, empirical studies as well as financial theories posit that foreign capital inflows play a lead role. As such, this study set out to empirically investigate the extent to which foreign capital flows promotes economic development in Nigeria. Time series data between the periods 1986 to 2018 were sourced from the central bank of Nigeria statistical bulletin and world bank data based. The study proxied foreign capital flows using foreign direct investment, foreign portfolio investment, foreign aids and external borrowings which is decomposed into multilateral and bilateral loans while Human development index is used as proxy for economic development. The study further employed unit root test, co-integration test, error correction model and granger causality test to ascertain the direction of relationship. Findings reveal that of the five indices of foreign capital inflows, three (foreign  portfolio investment, foreign aids and bilateral loan) prove to be significant in promoting economic development in Nigeria, while foreign direct investment and multilateral loan are negatively  related to economic development in Nigeria. As such, the study conclude that foreign capital inflows in the form of foreign portfolio investment, foreign aids and bilateral loans are significant in boosting economic development in Nigeria. Therefore, we recommend that managers of the Nigerian economic should create an enabling financial environment as this will help in accelerating further inflows of portfolio investment and thus boost economic development in Nigeria.

Environmental impact of economic growth, emission and FDI: systematic review of reviews

2019 ◽  
Vol 11 (1) ◽  
pp. 81-134 ◽  
Author(s):  
Neha Saini ◽  
Monica Sighania
Keyword(s):  
Economic Growth ◽  
Carbon Emission ◽  
Capital Inflows ◽  
Kuznets Curve ◽  
Negative Effects ◽  
Research Papers ◽  
Content Type ◽  
The Status ◽  
Review Of Reviews ◽  
Foreign Capital Inflows

PurposeThe purpose of this paper is to organize the detailed review of economic growth, carbon emission and foreign capital inflows and its impact on the environment. Another objective of the study is to provide the comprehensive bibliography and to analyze the findings and results of the studies undertaken in review.Design/methodology/approachThis paper examined 111 research papers from a sample of thousands of papers, based on inclusion criteria, in this area of research. These 111 research papers are categorized on the basis of several factors to know the status of research on this topic.FindingsThis study is based on economic development and carbon emission and its impact on the environment. We tried to gather all the available facts based on this topic and found that the topic is gaining high relevance in the present scenario because of the growing pace of development in developing countries. Most of the studies supported the environmental Kuznets curve hypothesis and we also found that significant amount of literature is available which supports cleaner FDI as a measure to mitigate the negative effects of economic growth on the ecological environment.Originality/valueBased on the literature review from various sources, this study provides the collection, classification and comprehensive bibliography on this topic, which may be helpful for stakeholders such as academicians, researchers and policymakers working particularly in this area of research.

The impact of foreign capital inflows on economic growth and employment in Egypt

2019 ◽  
Vol 36 (3) ◽  
pp. 258-276
Author(s):  
Hanan AbdelKhalik Abouelfarag ◽  
Mohamed Sayed Abed
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Foreign Investment ◽  
External Debt ◽  
Capital Inflows ◽  
Aggregate Model ◽  
Employment Level ◽  
Content Type ◽  
Foreign Capital Inflows ◽  
The Impact

Purpose The purpose of this paper is to trace the effects of both foreign direct investment (FDI) and external debt on economic growth and employment in Egypt over the 1985–2014 period. Design/methodology/approach The empirical analysis includes three stages: an aggregate time series analysis, a panel model that includes six economic sectors and a set of single-sector models. The “autoregressive distributed lag” approach is utilized either in the time series or in the panel models. Findings The empirical results of this research reveal that foreign investment exerts a weak positive effect on economic growth and employment in Egypt. External debt exerts an insignificant effect on economic growth and employment in the aggregate model. The sectoral analysis reveals that the effect varies greatly between sectors; the effect of FDI on output is positive in the financial, tourism and other service sectors, while it is insignificant in the agricultural, construction and manufacturing sectors. Practical implications It is important not to depend on external debt as an easy way to obtain capital. Greater efforts should be exerted to increase the absorptive capacity of the Egyptian economy so as to benefit from the positive spillover effect of foreign investment as much as possible. Originality/value With respect to Egypt, very limited studies have focussed on the role of external debt on growth and that of FDI and external debt on the employment level. There is no general agreement concerning the effect of FDI on economic growth. Therefore, this research explores the effect of FDI and external debt on the Egyptian economy utilizing both aggregate and sectoral data.

The Great Leveraging in the European crisis countries

2017 ◽  
Vol 44 (6) ◽  
pp. 895-910 ◽  
Author(s):  
Juan Carlos Cuestas ◽  
Karsten Staehr
Keyword(s):  
Global Financial Crisis ◽  
Capital Inflows ◽  
Content Type ◽  
Vector Error Correction ◽  
Vector Error ◽  
Domestic Credit ◽  
Foreign Capital Inflows ◽  
The Global Financial Crisis ◽  
Flow Variables ◽  
Vector Error Correction Models

Purpose The Great Leveraging was an episode of rapid credit growth and booming housing markets leading up to the global financial crisis. It is important to identify the key drivers of the Great Leveraging and, to this end, the purpose of this paper is to model the relationship between domestic credit and net foreign liabilities in the EU countries most affected by the crisis. Design/methodology/approach The analyses show that domestic credit and net foreign liabilities were cointegrated one-to-one for Greece, Italy, Portugal and Spain, while there was no cointegration for Ireland. Estimation of vector error correction models (VECMs) shows that the adjustment to deviations from the cointegrating relationship took place through changes in domestic credit for Greece and Italy, while the adjustment was bidirectional for Spain and maybe also for Portugal. Findings These results suggest that external factors in the form of foreign capital inflows were important drivers of the pre-crisis leveraging in the southern crisis countries, although to varying degrees across the countries. Originality/value Key novelties include the use of stock variables instead of flow variables and the estimation of VECMs for the countries individually instead of in a panel.

scholarly journals Impact of Priority Sector Lending on Financial Profitability: Segment Wise Panel Data Analysis of Indian Banks

2021 ◽  
Vol 20 (1) ◽  
pp. 19-37
Author(s):  
Rajesh Desai ◽  
Keyword(s):  
Service Sector ◽  
Negative Impact ◽  
Panel Data Analysis ◽  
Banking System ◽  
Well Being ◽  
Least Square ◽  
Factors Affecting ◽  
Personal Credit ◽  
Indian Banks ◽  
Financial Profitability

A sustainable and financially stable banking system is a prerequisite to achieve comprehensive growth as well as economic and social well-being of residents of any country. This research focused on analyzing profitability of Indian banks and how it is affected by lending in the priority sector. Priority sector lending (PSL) mainly includes deployment of credit to weaker and neglected segments of an economy. The study adopted a distinctive measure to represent total PSL by classifying it into four sub-segments i.e., agriculture, industrial, service, and personal credit. Applying panel least square regression with fixed and random effects model, the study concluded that agricultural lending has a significant negative impact on bank profitability whereas the service sector lending adds positive value towards financial profitability of banks. Industrial and personal credit were found to be insignificant factors affecting profitability. The study will be beneficial to banking professionals and policy makers to determine sensitive and risky sectors of lending and develop appropriate approaches to deal with them.

Argentine trade balance may fall back into deficit

2016 ◽  
Keyword(s):  
Trade Balance ◽  
Foreign Debt ◽  
Political Support ◽  
Trade Liberalisation ◽  
Capital Inflows ◽  
Content Type ◽  
Export Prices ◽  
Export Tax ◽  
Foreign Capital Inflows ◽  
The Government

Subject Outlook for the trade balance. Significance Exports declined in the first half of 2016. The January devaluation and export tax reductions proved insufficient to offset lower export prices and the Brazilian recession. By contrast, import volumes climbed. Gradual real currency appreciation and trade liberalisation boosted purchases, especially of consumer goods and vehicles. The government is encouraging trade liberalisation as a tool to control inflation and improve local competitiveness. Impacts Growing foreign trade deficits will leave the country more exposed to sudden shifts in foreign capital inflows. Though trade liberalisation may boost long-term competitiveness, the government may lack the political support needed to sustain the policy. Growing foreign debt will raise fears of a new external crisis, given Argentina's poor record.

The Role of Macroeconomic and Financial Factors in Bond Market Development in Selected Countries

2020 ◽  
pp. 097215092090720
Author(s):  
Ameenullah Aman ◽  
Mohamad Yazid Isa ◽  
Asmadi Mohamed Naim
Keyword(s):  
Recurrent Events ◽  
Developing Economies ◽  
Panel Data Analysis ◽  
Banking System ◽  
Financial System ◽  
Bond Market ◽  
Market Development ◽  
Bond Markets ◽  
Primary Role ◽  
Macroeconomic Factors

Both developed and developing economies have showed serious interest in the development of domestic and regional bond markets. This interest was motivated by the recurrent events of economic crises, due to the over-reliance on the banking system. Therefore, this study investigates the macroeconomic and financial determinants of a bond market development, since the economic and financial environments play a primary role in the development of any financial market. Panel data analysis is employed to investigate the potential relationships. Results identify that financial system and most of the macroeconomic factors are positively associated with a bond market development. However, the stage of economic development is negatively related to bonds. Hence, policymakers need to strengthen and use existing financial system and economic variables to provide reasonable support to the development of bond markets. This study empirically analyses some unexplored theoretical relationships with respect to a bond market.

scholarly journals Competition between conventional and Islamic banks in Malaysia revisited

2020 ◽  
Vol 11 (9) ◽  
pp. 1771-1789 ◽  
Author(s):  
Rafik Harkati ◽  
Syed Musa Alhabshi ◽  
Salina Kassim
Keyword(s):  
Banking Sector ◽  
Monopolistic Competition ◽  
Panel Data Analysis ◽  
Banking System ◽  
Financial System ◽  
Secondary Data ◽  
Perfect Competition ◽  
Islamic Banks ◽  
Content Type ◽  
Conventional And Islamic Banks

Purpose This paper aims to assess the nature of competition between conventional and Islamic banks operating in Malaysia. It is an effort to enrich the existing literature by offering an empirical compromise on the differences in the results of studies related to competition between the two types of banks. Design/methodology/approach Secondary data on all banks operating in Malaysia’s diversified banking sector is collected from the FitchConnect database for the period 2011-2017. A non-structural measure of competition (H-statistic) as informed by Panzar–Rosse is used to measure the competition between conventional and Islamic banks. Panel data analysis techniques are used to estimate H-statistic. Wald test for the market structure of perfect competition/monopoly is used to affirm the validity and consistency of the results. Findings The findings of this study signify that the Malaysian banking sector operated under monopolistic competition during the period of study. The long-run equilibrium condition holds for the Malaysian banking sector. Competition among conventional banks is more intense than that among Islamic banks. Financial reform endeavours of Bank Negara Malaysia (BNM) along with the liberalisation wave of the financial system were successful in promoting competition, rendering the financial system contestable, resilient and dynamic. Practical implications Regulators and policymakers may find the results beneficial in terms of rethinking the number of banks operating in the Islamic sector. The number of banks, however, is not the only determinant of competition in the banking sector. Implications of competition change for stability and risk-taking behaviour of banks should be considered. Originality/value Within the context of Malaysia’s diversified banking system, given the contradictory results reported in studies on competition, this study is an effort to provide a plausible middle ground. It suggests a possible answer as to why competition nature has not changed since the policy change initiatives of BNM, namely, banks merger, expansion of Islamic banking operation scope and liberalisation process.

Sign in / Sign up

Export Citation Format

Share Document