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Old wine in a shariah-compliant bottle?: an empirical comparison of SRI sukuk, social impact bonds, and conventional bonds

Syed Azman, Syed Marwan Mujahid and Haneef, Mohamed Aslam and Engku Ali, Engku Rabiah Adawiah and Ismail, Suhaiza (2020) Old wine in a shariah-compliant bottle?: an empirical comparison of SRI sukuk, social impact bonds, and conventional bonds. In: 8th ASEAN Universities International Conference on Islamic Finance (8th AICIF) 2020, 24th-26th November 2020, Bogor, Indonesia. (Unpublished)

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Purpose – The Islamic finance and Socially Responsible Investing (SRI) Industries have grown significantly in recent times with growth rates exceeding the conventional markets. Both industries arguably share similarities in terms of their objectives. Following this, there are ongoing contentions that Islamic finance instruments simply replicate conventional tools. This paper addresses this issue by empirically comparing three instruments: Sustainable and Responsible Investment (SRI) sukuk, Social Impact Bonds (SIBs), and conventional bonds (CB). Design/methodology/approach – The methodology used is a comparative approach in looking into the similarities and differences of the three financial instruments. This is done qualitatively through a critical review of literature and quantitatively through data obtained from a survey conducted towards stakeholders in Malaysia Findings – The qualitative analysis finds that SRI sukuk, SIB, and conventional bonds shares commonalities but also differences. At the same time, the quantitative analyses of the show that generally, stakeholders view SRI Sukuk, SIB, and CB to be statistically significantly different from each other. This shows that stakeholders do not view SRI sukuk as "old wine in a new Shariah-compliant bottle" but instead is considered to be different from its conventional counterparts. Furthermore, stakeholders also differentiate between SIB and CB. Practical implications – The paper provides empirical evidence that Islamic finance instrument, represented by SRI sukuk, is viewed as different instruments to conventional tools, represented by SIB and CB. As such, firstly, it debunks the notion that Islamic finance are viewed as similar to its conventional counterpart. Secondly, SIBs are seen as different from CBs, illustrating the distinct categorisation of impact investing instruments. As such, thirdly, the development of SRI sukuk and SIB can provide diversification to portfolios as it is a unique instrument in the social finance and financial market. Research limitations/implications – The paper is empirical, but the scope is limited to stakeholders in Malaysia. Further empirical studies can be done to other stakeholders around the world. Furthermore, other factors can be put into consideration to enhance the empirical analysis.

Item Type: Conference or Workshop Item (Slide Presentation)
Additional Information: 8628/86266 Presented via Zoom
Uncontrolled Keywords: SRI sukuk, social impact bonds, Islamic finance
Subjects: BPH Islamic Economics
BPH Islamic Economics > BPH437 Sukuk - Islamic Bond
H Social Sciences > HG Finance > HG3368 Islamic Banking and Finance
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): Institute of Islamic Banking & Finance (IIiBF)
Kulliyyah of Economics and Management Sciences
Depositing User: Dr. Syed Marwan Mujahid Syed Azman
Date Deposited: 30 Dec 2020 22:52
Last Modified: 30 Dec 2020 22:52
URI: http://irep.iium.edu.my/id/eprint/86266

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