The Determinants of Sukuk Markets: Evidence from Participation banks in Türkiye

Abstract

Sukuk is the fastest growing interest-free financial instrument in the Islamic finance market in recent years. The development of sukuk, an asset-backed securitization, and the analysis of barriers to it have been the subject of many international academic studies recently. The purpose of this article is to determine the effects on the sukuk issued by participation banks in Turkey. In this context, the parameters on the sukuk issued by participation banks in the 2015Q1-2021Q4 periods were analyzed by panel data method. Data on the variables of Gross Domestic Product (GDP), exchange rate, interest rate, unemployment, inflation, profit share rates, foreign direct investments, stock market, public expenditures, exports, participation bank size and banking sector size used in the analysis. TKBB), Turkish Statistical Institute (TUIK) and Electronic Data Distribution System (EVDS) of the Central Bank of the Republic of Turkey. According to the results of the analysis, it was concluded that the relevant parameters affected the development of the sukuk markets positively and negatively. The study is one of the most comprehensive studies in which the parameters affecting the sukuk markets in Turkey are discussed and it is aimed to add to the literature.