Indonesia Conference Directory

This study investigates the determinant factors that promote the issuance of sukuk instrument in Indonesia from 2010 to 2017. The first aim is to examine macroeconomic factors that influence sukuk issuance. Using vector error correction model the empirical results show that economic development has co-integrating relationship with sovereign sukuk issuance. Second objective is to explore which specific firm level factors have a significant effect on corporate sukuk issuance using panel data analysis in the form of fixed effect and random effects model. The results are consistent with trade-off and pecking order theory and suggest that corporate sukuk issuance can enhance company valuation, bargaining value, and business sustainability