Authors : Noor Zahirah Mohd Sidek and Nursilah Ahmad
Abstract: The impact of social capital on financial development is a longstanding issue. Empirical evidences suggest that social capital has an important effect on economic growth. Given this relationship, we hypothesize the same impact on the financial market. In this study, we examine the impact of social capital on the development of Islamic finance with a special focus on sukuk issuance. A sample of sukuk issuance from 2000-2014 from sixteen countries is examined. Results suggest that social capital promotes greater sukuk issuance, especially in the presence of a more democratic and financially liberalized environment. An important policy implication is that government should strengthen and enhance both political and economic institutions as they are the basis for social capital development.
Noor Zahirah Mohd Sidek and Nursilah Ahmad, 2016. Social Capital in Islamic Finance: The Case of Sukuk. International Business Management, 10: 4670-4678.