AbdulRahman, AisyahAlyamani, Ghalib Mohammed2024-12-292024https://hdl.handle.net/20.500.14154/74508Sukuk and bond are two different financial instruments for financing projects by organizations and governments. Majority of previous studies focused on the sovereign sukuk or bond while few examined the organizational sukuk or bond performance. At the organizational level, most of studies focused on corporate governance of financial institutions while few examined the shariah governance and institutional governance. This study investigates the effect of institutional and Shariah governance on the performance of sukuk and bonds in the two largest issuing regions, the Gulf Cooperation Council (GCC) (Saudi Arabia, United Arab of Emirates, Kuwait, Qatar, Oman and Bahrain) and Southeast Asia (Malaysia and Indonesia). The motivation for this research stems from the limited understanding of how governance mechanisms, particularly institutional and Shariah governance, impact sukuk and bond performance. This gap is critical, given the rapid growth of sukuk as a financial instrument in Islamic finance markets, with little exploration into the governance structures that influence its performance. The study also seeks to understand the differences in sukuk and bond performance. Data were collected from 87 financial and non-financial institutions in these regions over the period of 2011-2021. Using panel data analysis, fixed effect model was applied to determine the effects of governance indicators on sukuk and bond issuance and returns. Institutional governance was measured through World Bank indicators (voice and accountability, political stability, regulatory quality, rule of law, government effectiveness, and control of corruption), while a newly developed Shariah governance index was used to assess compliance with Islamic principles. The findings revealed that institutional and Shariah governance positively affect sukuk performance, while institutional governance significantly influences bond performance. Shariah governance played a particularly critical role in sukuk issuance and returns, indicating that compliance with Islamic law strengthens market confidence. Regional differences were also identified, with stronger governance effects in the GCC compared to Southeast Asia. These results offer practical insights for policymakers, suggesting that enhancing governance structures could improve both sukuk and bond performance. The study contributes to the theoretical literature by addressing the gap between governance structures and sukuk and bond performance, an area underexplored in existing research. Future research should examine additional governance mechanisms or explore other financial instruments within different economic contexts.301enSukuk bond governanceThesis