Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/zbw/bofitp/bdp2014_021.html
   My bibliography  Save this paper

Do the type of sukuk and choice of shari'a scholar matter?

Author

Listed:
  • Godlewski, Christophe J.
  • Turk-Ariss, Rima
  • Weill, Laurent
Abstract
​Sukuk, the shari'a-compliant alternative mode of financing to conventional bonds, have considerably expanded over the last decade. We analyze the stock market reaction to two key features of this instrument: sukuk type and characteristics of the shari'a scholar certifying the issue. We use the event study methodology to measure abnormal returns for a sample of 131 sukuk from eight countries over the period 2006-2013 and find that Ijara sukuk structures exert a positive influence on the stock price of the issuing firm. We observe a similar positive impact from shari'a scholar reputation and proximity to issuer. Overall our results support the hypotheses that the type of sukuk and the choice of scholars hired to certify these securities matter for the market valuation of the issuing company. Publication

Suggested Citation

  • Godlewski, Christophe J. & Turk-Ariss, Rima & Weill, Laurent, 2014. "Do the type of sukuk and choice of shari'a scholar matter?," BOFIT Discussion Papers 21/2014, Bank of Finland Institute for Emerging Economies (BOFIT).
    • Handle: RePEc:zbw:bofitp:bdp2014_021
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/212807/1/bofit-dp2014-021.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kedia, Simi & Rajgopal, Shiva, 2011. "Do the SEC's enforcement preferences affect corporate misconduct?," Journal of Accounting and Economics, Elsevier, vol. 51(3), pages 259-278, April.
    2. Sattar A. Mansi & William F. Maxwell & Darius P. Miller, 2004. "Does Auditor Quality and Tenure Matter to Investors? Evidence from the Bond Market," Journal of Accounting Research, Wiley Blackwell, vol. 42(4), pages 755-793, September.
    3. Jeong-Bon Kim & Byron Song & Judy Tsui, 2013. "Auditor size, tenure, and bank loan pricing," Review of Quantitative Finance and Accounting, Springer, vol. 40(1), pages 75-99, January.
    4. di Mauro, Filippo & Caristi, Pierluigi & Couderc, Stéphane & di Maria, Angela & Ho, Lauren & Grewal, Beljeet Kaur & Masciantonio, Sergio & Ongena, Steven & Zaher, Sajjad, 2013. "Islamic finance in Europe," Occasional Paper Series 146, European Central Bank.
    5. Wilson, Rodney, 2009. "The development of Islamic finance in the GCC," LSE Research Online Documents on Economics 55281, London School of Economics and Political Science, LSE Library.
    6. Godlewski, Christophe J. & Turk-Ariss, Rima & Weill, Laurent, 2013. "Sukuk vs. conventional bonds: A stock market perspective," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 745-761.
    7. di Mauro, Filippo & Ongena, Steven & Caristi, Pierluigi & Couderc, Stéphane & di Maria, Angela & Ho, Lauren & Grewal, Beljeet Kaur & Masciantonio, Sergio & Zaher, Sajjad, 2013. "Islamic finance in Europe," Occasional Paper Series 146, European Central Bank.
    8. E. Johnson & Inder K. Khurana & J. Kenneth Reynolds, 2002. "Audit†Firm Tenure and the Quality of Financial Reports," Contemporary Accounting Research, John Wiley & Sons, vol. 19(4), pages 637-660, December.
    9. Najeeb, Syed Faiq & Ibrahim, Shahul Hameed Mohamed, 2014. "Professionalizing the role of Shari'ah auditors: How Malaysia can generate economic benefits," Pacific-Basin Finance Journal, Elsevier, vol. 28(C), pages 91-109.
    10. Solomon, I & Shields, MD & Whittington, OR, 1999. "What do industry-specialist auditors know?," Journal of Accounting Research, Wiley Blackwell, vol. 37(1), pages 191-208.
    11. Datar, Srikant M. & Feltham, Gerald A. & Hughes, John S., 1991. "The role of audits and audit quality in valuing new issues," Journal of Accounting and Economics, Elsevier, vol. 14(1), pages 3-49, March.
    12. Campbell, Cynthia J. & Cowan, Arnold R. & Salotti, Valentina, 2010. "Multi-country event-study methods," Journal of Banking & Finance, Elsevier, vol. 34(12), pages 3078-3090, December.
    13. Brown, Stephen J. & Warner, Jerold B., 1985. "Using daily stock returns : The case of event studies," Journal of Financial Economics, Elsevier, vol. 14(1), pages 3-31, March.
    14. Brown, Stephen J. & Warner, Jerold B., 1980. "Measuring security price performance," Journal of Financial Economics, Elsevier, vol. 8(3), pages 205-258, September.
    15. Kathleen Fuller & Jeffry Netter & Mike Stegemoller, 2002. "What Do Returns to Acquiring Firms Tell Us? Evidence from Firms That Make Many Acquisitions," Journal of Finance, American Finance Association, vol. 57(4), pages 1763-1793, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Christophe J. GODLEWSKI & Rima Turk-Ariss & Laurent Weill, 2014. "What Influences Stock Market Reaction to Sukuk Issues? The Impact of Scholars and Sukuk Types," Working Papers of LaRGE Research Center 2014-03, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
    2. repec:zbw:bofitp:2014_021 is not listed on IDEAS
    3. Godlewski, Christophe J. & Turk-Ariss, Rima & Weill, Laurent, 2016. "Do the type of sukuk and choice of shari’a scholar matter?," Journal of Economic Behavior & Organization, Elsevier, vol. 132(S), pages 63-76.
    4. Paul†Olivier Klein & Laurent Weill & Christophe J. Godlewski, 2018. "How sukuk shapes firm performance," The World Economy, Wiley Blackwell, vol. 41(3), pages 699-722, March.
    5. Godlewski, Christophe J., 2015. "The certification value of private debt renegotiation and the design of financial contracts: Empirical evidence from Europe," Journal of Banking & Finance, Elsevier, vol. 53(C), pages 1-17.
    6. Kanungo, Rama Prasad, 2021. "Uncertainty of M&As under asymmetric estimation," Journal of Business Research, Elsevier, vol. 122(C), pages 774-793.
    7. Christophe J. Godlewski & Bulat Sanditov, 2018. "Financial Institutions Network and the Certification Value of Bank Loans," Financial Management, Financial Management Association International, vol. 47(2), pages 253-283, June.
    8. Neelam Rani & Surendra S Yadav & P.K. Jain, 2015. "Impact of Mergers and Acquisitions on Shareholders’ Wealth in the Short Run: An Event Study Approach," Vikalpa: The Journal for Decision Makers, , vol. 40(3), pages 293-312, September.
    9. Panayiotis C. Andreou & Christodoulos Louca & Christos S. Savva, 2016. "Short-horizon event study estimation with a STAR model and real contaminated events," Review of Quantitative Finance and Accounting, Springer, vol. 47(3), pages 673-697, October.
    10. Fungáčová, Zuzana & Godlewski, Christophe J. & Weill, Laurent, 2020. "Does the type of debt matter? Stock market perception in Europe," The Quarterly Review of Economics and Finance, Elsevier, vol. 75(C), pages 247-256.
    11. Ekkayokkaya, Manapol & Paudyal, Krishna, 2015. "A trade-off in corporate diversification," Journal of Empirical Finance, Elsevier, vol. 34(C), pages 275-292.
    12. Paul-Olivier KLEIN, 2017. "Do Shareholders Value Bond Offerings? A Meta-Analysis," Working Papers of LaRGE Research Center 2017-04, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
    13. Karatzas, Antonios & Daskalakis, George & Bastl, Marko & Johnson, Mark, 2022. "Risky business? Shareholder value effects of service provision," International Journal of Production Economics, Elsevier, vol. 244(C).
    14. Quyen Van & Vy Tran, 2023. "Control of Emerging-Market Target, Abnormal Stock Return: Evidence in Vietnam," Papers 2302.07117, arXiv.org, revised Mar 2023.
    15. Neelam Rani & Surendra S. Yadav & P.K. Jain, 2013. "Market Response to the Announcement of Mergers and Acquisitions: An Empirical Study from India," Vision, , vol. 17(1), pages 1-16, March.
    16. Fields, L. Paige & Fraser, Donald R. & Kolari, James W., 2007. "Bidder returns in bancassurance mergers: Is there evidence of synergy?," Journal of Banking & Finance, Elsevier, vol. 31(12), pages 3646-3662, December.
    17. Dang, Man & Puwanenthiren, Premkanth & Truong, Cameron & Henry, Darren & Vo, Xuan Vinh, 2022. "Audit quality and seasoned equity offerings methods," International Review of Financial Analysis, Elsevier, vol. 83(C).
    18. Bouteska, Ahmed, 2019. "The effect of investor sentiment on market reactions to financial earnings restatements: Lessons from the United States," Journal of Behavioral and Experimental Finance, Elsevier, vol. 24(C).
    19. Andrey Golubov & Dimitris Petmezas & Nickolaos G. Travlos, 2013. "Empirical mergers and acquisitions research: a review of methods, evidence and managerial implications," Chapters, in: Adrian R. Bell & Chris Brooks & Marcel Prokopczuk (ed.), Handbook of Research Methods and Applications in Empirical Finance, chapter 12, pages 287-313, Edward Elgar Publishing.
    20. Shaio Yan Huang & Yi-Yang Lee & Yu-Ying Lin, 2023. "Effect of an Audit Partner’ Industry Auditing Tenure on Audit Quality Under the Mandatory Audit Partner Rotation System in Taiwan," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 13(2), pages 1-4.
    21. Mateev, Miroslav, 2017. "Is the M&A announcement effect different across Europe? More evidences from continental Europe and the UK," Research in International Business and Finance, Elsevier, vol. 40(C), pages 190-216.

    More about this item

    Keywords

    financial instruments; Islamic finance; shari’a scholars;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:bofitp:bdp2014_021. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/bofitfi.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.