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Islamic financial instruments in corporate firms’ balance sheet: A research note

Dzolkarnaini, N and Minhat, M 2012, 'Islamic financial instruments in corporate firms’ balance sheet: A research note' , International Journal of Excellence in Islamic Banking and Finance, 2 (2) , pp. 65-75.

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Purpose: This paper examines the use of Islamic Financial Instruments (IFIs) in the corporate firms’ balance sheet. Methodology/Approach: The overall research approach involves an examination of annual reports of 20 top non-financial firms from 16 countries over the years 2005 through 2009 (i.e., a 5 year period). Findings: It documents two important findings. Firstly, there is lower proportion of IFIs in the capital structure mix of corporate firms. Secondly, the tendency to use IFIs in the firms’ capital structure mix is generally diverse across countries. Research limitations/implications: The research in this area is fraught with data non-availability. This could be due to different level of accounting development and modernisation in communicating the annual report, by the public listed firms, in a particular country. Practical implications: The paper supports the arguments that the tremendous growth in Islamic finance has been largely propelled by various governments’ needs of funds to develop the nations hence dominating the Islamic capital market. Originality/value of paper: This is the first study to document evidence in the use of IFIs in the corporate firms’ capital structure mix despite voluminous literature in this field of research.

Item Type: Article
Uncontrolled Keywords: Islamic Finance; Corporate Finance; Capital Structure; Islamic Financial Instruments; Sukuk
Themes: Media, Digital Technology and the Creative Economy
Schools: Schools > Salford Business School
Schools > Salford Business School > Business and Management Research Centre
Journal or Publication Title: International Journal of Excellence in Islamic Banking and Finance
Publisher: Hamdan Bin Mohammed e-University (HBMeU) Dubai
Refereed: Yes
ISSN: 2220-829
Related URLs:
Funders: University of Salford
Depositing User: Dr Nazam Dzolkarnaini
Date Deposited: 10 May 2013 11:35
Last Modified: 08 Nov 2015 23:04

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