Foreign Investment, Sustainable Development, and Green Sukuk Issuance: Evidence from OIC Countries
DOI:
https://doi.org/10.55657/iefj.v5i2.343Keywords:
Green Sukuk; Sustainable Development; Sustainable Finance; OIC CountriesAbstract
The development of sustainable finance has increased the importance of green financing instruments that support environmental sustainability while complying with Islamic financial principles. This study aims to examine the effects of FDI and Sustainable Development on green sukuk issuance in five member countries of the OIC, namely Indonesia, Bangladesh, Türkiye, Malaysia, and Nigeria during the 2015-2023period. This study employed a quantitative approach using secondary data comprising 424 green sukuk issuances recorded between 2015 and 2023 across the five countries, with green sukuk issuance measured as the natural logarithm of its annual issuance value (USD). Multiple linear regression analysis was conducted using JASP to evaluate the relationships among the variables. The empirical findings reveal that Foreign Direct Investment and Sustainable Development have positive and statistically significant effects on green sukuk issuance. These results indicate that higher foreign investment inflows and stronger sustainable development performance encourage the expansion of green sukuk as a financing instrument for environmentally sustainable projects. This study contributes to the literature by providing cross-country empirical evidence on the determinants of green sukuk issuance in OIC countries. The findings also provide practical implications for governments and financial regulators to strengthen investment policies, improve sustainable development strategies, and expand the role of green sukuk in financing sustainable economic development and supporting the transition toward a green economy.
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