Volume 20, Issue 3 (9-2025)
J. Mon. Ec. 2025, 20(3): 323-345 |
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emamverdi G A, shojaeyan F, mehrara M, ghiasvand A, hadinejad M. Investigating the effect of Islamic financing instruments (Sukuk) on the profitability of Islamic and conventional banks (member countries of the Organization of the Islamic Conference). J. Mon. Ec. 2025; 20 (3) :323-345
URL: http://jme.mbri.ac.ir/article-1-711-en.html
URL: http://jme.mbri.ac.ir/article-1-711-en.html
Ghodrat allah Emamverdi *1 
, Fatemeh Shojaeyan2 , Mohsen Mehrara3 , Abolfazl Ghiasvand1 , Manijeh Hadinejad1
, Fatemeh Shojaeyan2 , Mohsen Mehrara3 , Abolfazl Ghiasvand1 , Manijeh Hadinejad1
1- Assistant Professor
2- Doctoral candidate
3- Professor
2- Doctoral candidate
3- Professor
Abstract: (205 Views)
One of the most important determinants of bank profitability is the bank's financing strategy. Therefore, banks must continuously innovate to design and implement new financing instruments. Among these, Islamic financial instruments—particularly sukuk—play a significant role. The present study investigates the impact of sukuk on different levels of profitability (low, medium, and high) for 24 Islamic banks and 12 conventional banks, considering additional control variables such as GDP growth and inflation. The analysis covers the period 2003–2023 and specifically examines the role of the 2008 global financial crisis. Using dynamic panel quantile regression, the findings reveal that during the crisis, the expansion of the sukuk market positively influenced the profitability of conventional banks but negatively affected Islamic banks, with the strongest reduction observed among banks with low profitability. In contrast, outside the crisis period, sukuk development shows a mixed effect: negative for both Islamic and conventional banks at low and high levels of profitability, while remaining neutral in the middle quantiles.
Type of Study: Original Research - Empirical |
Subject:
Economics
Received: 13 Jul 2025 | Accepted: 15 Sep 2025 | Published: 2 Nov 2025
Received: 13 Jul 2025 | Accepted: 15 Sep 2025 | Published: 2 Nov 2025
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