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

Dzolkarnaini, Nazam; Minhat, Marizah


Nazam Dzolkarnaini

Marizah Minhat


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.


Dzolkarnaini, N., & Minhat, M. (2012). Islamic financial instruments in corporate firms’ balance sheet: a research note. International Journal of Excellence in Islamic Banking and Finance, 2,

Journal Article Type Article
Publication Date 2012
Deposit Date Mar 23, 2016
Peer Reviewed Peer Reviewed
Volume 2
Keywords Islamic finance; corporate finance; capital structure; Islamic financial instruments;Sukuk;
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