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Sukuk Market Development and Economic Growth: Panel Data Evidence
Mohammed Abdullah KhanInternational Islamic University MalaysiaCorresponding
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Sara Ahmed El-SayedAmerican University in Cairo
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Abstract
This paper investigates the relationship between sukuk (Islamic bonds) market development and economic growth using panel data from 15 countries with significant Islamic finance sectors over the period 2010-2023. Employing dynamic panel GMM estimation techniques, we find robust evidence of a positive bidirectional relationship between sukuk market capitalization and GDP growth. Our results indicate that a 10% increase in sukuk market depth is associated with a 0.8% increase in long-term economic growth. We also document significant spillover effects, with sukuk issuance in one country positively influencing economic outcomes in neighboring markets. The findings have important policy implications for governments seeking to leverage Islamic capital markets as engines of sustainable economic development.
Keywords
sukukIslamic bondseconomic growthpanel dataGMM estimation
References
How to Cite this Article
Mohammed Abdullah Khan, et al. (2025). Sukuk Market Development and Economic Growth: Panel Data Evidence. Journal of Islamic Financial Research, 1(1), 29-52. https://doi.org/10.12345/jifr.2025.002
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