Underlying Assets and Sharia Governance Mechanism on Sukuk Yields


  • Upik Ayu Fadilah Sary Department of Business Management, Bandung Institute of Technology, Indonesia
  • Yunietta Anny Nanggolan Department of Business Management, Bandung Institute of Technology, Indonesia




The aim of this study is twofold. The first is to examine the different performances of Sukuk's yield based on different underlying asset types. The second is to investigate the effect of sharia governance mechanism on Sukuk's yield. The underlying asset is differed by equity-based and asset-based. While the proxies of sharia governance mechanism include independent commissioner, number of sharia scholars, and the percentage of Muslim board. The control variables include conventional corporate governance such as institutional ownership and board size and the ratings and profitability of the issuers. The data covers 2015 to 2018 for 24 tranches of long-term and medium-term issuances of Sukuk from 12 corporations. Multivariate panel robust regression and comparative tests are applied. The findings show that (1) There is no significant difference in Sukuk yield’s performance between different underlying asset types. (2)Better internal and sharia compliance control in the presence of Independent commissioners and sharia scholars significantly influence the yields of Sukuk.


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