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International Journal of Islamic Economics and Business Sustainability

Abstract

Purpose – The study examines the relationship between institutional quality, macroeconomic conditions, and sovereign sukuk outstanding in eight member countries of the Organization of Islamic Cooperation (OIC) during 2014–2021.

Design/methodology/approach– The study employs panel data for Bahrain, Brunei Darussalam, Indonesia, Malaysia, Pakistan, Qatar, Saudi Arabia, and Türkiye. Institutional quality is measured using government effectiveness, control of corruption, regulatory quality, and voice and accountability. Macroeconomic variables included are economic size, inflation, and oil rents. Fixed-effects panel regressions with robust standard errors are applied following model specification and diagnostic tests.

Findings – Economic size and voice and accountability are positively associated with sovereign sukuk outstanding, while regulatory quality shows weaker positive evidence (significant at the 10 percent level). In contrast, oil rents are negatively associated with sovereign sukuk outstanding. Government effectiveness, control of corruption, and inflation are not statistically significant in the model.

Implications– The findings highlight the importance of fiscal transparency, accountability, and regulatory credibility in strengthening sovereign sukuk markets. They also suggest that resource-rich economies may use sukuk to diversify government financing beyond commodity revenues.

Originality/value– This study contributes by jointly examining multiple dimensions of institutional quality and macroeconomic conditions as determinants of sovereign sukuk outstanding across OIC countries.

References

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Bahasa Abstract

Tujuan (Purpose) –
Penelitian ini mengkaji hubungan antara kualitas kelembagaan, kondisi makroekonomi, dan jumlah outstanding sukuk negara pada delapan negara anggota Organisasi Kerja Sama Islam (OKI) selama periode 2014–2021.

Desain/metodologi/pendekatan (Design/methodology/approach) –
Penelitian ini menggunakan data panel untuk Bahrain, Brunei Darussalam, Indonesia, Malaysia, Pakistan, Qatar, Arab Saudi, dan Türkiye. Kualitas kelembagaan diukur menggunakan indikator efektivitas pemerintah, pengendalian korupsi, kualitas regulasi, serta suara dan akuntabilitas. Variabel makroekonomi yang digunakan meliputi ukuran ekonomi, inflasi, dan rente minyak. Regresi data panel dengan efek tetap (fixed effects) dan robust standard errors diterapkan setelah melalui spesifikasi model dan uji diagnostik.

Temuan (Findings) –
Ukuran ekonomi serta suara dan akuntabilitas berhubungan positif dengan jumlah outstanding sukuk negara, sementara kualitas regulasi menunjukkan bukti positif yang lebih lemah (signifikan pada tingkat 10 persen). Sebaliknya, rente minyak berhubungan negatif dengan jumlah outstanding sukuk negara. Efektivitas pemerintah, pengendalian korupsi, dan inflasi tidak menunjukkan pengaruh yang signifikan secara statistik dalam model.

Implikasi (Implications) –
Temuan penelitian menegaskan pentingnya transparansi fiskal, akuntabilitas, dan kredibilitas regulasi dalam memperkuat pasar sukuk negara. Temuan ini juga menunjukkan bahwa negara-negara yang kaya sumber daya alam dapat memanfaatkan sukuk sebagai instrumen untuk mendiversifikasi pembiayaan pemerintah dan mengurangi ketergantungan pada pendapatan komoditas.

Orisinalitas/nilai (Originality/value) –
Penelitian ini berkontribusi dengan menganalisis secara simultan berbagai dimensi kualitas kelembagaan dan kondisi makroekonomi sebagai determinan jumlah outstanding sukuk negara di negara-negara OKI.

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