What motivates retail investors to invest in government-issued digital sukuk during COVID-19?

Abstract

Purpose To analyse Sukuk Prihatin (SP), the first-ever retail digital sukuk issued by the Government of Malaysia in the midst of the COVID-19 pandemic, as part of the national economic recovery plan. The issuance of SP was oversubscribed, even upsized, resulting in the government announcing its intention to issue similar types of sukuk in the future. In light of this, the purpose of this study is to understand the motivation for retail investors to invest in SP. Design/methodology/approach The purposive sampling method was applied via a self-administered survey, while the cross-sectional data were empirically tested using the SmartPLS 3.2.9 structural equation modelling. An integrated model of the theory of planned behaviour and social cognitive theories was used in determining investors’ intention to invest in SP. Findings The findings of this research revealed that attitude (ATT) towards SP investment (SPI), social norms (SN), perceived control (PBC) regarding SPI, sukuk features (SF), tax incentives (TI) and the spirit of unity and brotherhood (SUB) were significant determinants of investors’ willingness to invest in SP. This research also provided evidence for significant national pride-moderated interactions of ATT, SN, PBC, SF, TI and digitisation on investment intention. Practical implications The outcome of this study could assist governments and policymakers to structure sukuk and other debt-based capital market products to attract retail investors who would be willing to invest in the development of the nation in the midst of a crisis. Originality/value This study is the first of its kind to investigate various relevant predictors, which have been derived from behavioural, contextual and motivational perspectives. These predictors could influence investors’ perceptions of an innovative sukuk like SP, which was issued in the midst of a pandemic. The value of this study is its possible use by governments and policymakers to further develop debt-based capital market products that have the dual function of an investment vehicle and a source of funds for the economic recovery of a nation.

Factors Affecting Individuals’ Behavioral Intention to Use Online Capital Market Investment Platforms in Indonesia

“…A study conducted by Bin-Nashwan et al (2022) investigates the intention of using government Sukuk digital investment. This study was conducted in Malaysia during the COVID-19 epidemic, and it used Social Cognitive Theory (SCT) and TAM to describe the intention of using the government's Sukuk digital investment.…”

“…Subjective norm is a subjective judgment of a person's abilities toward other people (both colleagues and family) that might influence the person's behaviour (Afif et al, 2018;Dewi & Rahadi, 2020;Merhi et al, 2019;Ramayah et al, 2009). Because daily decisions are dependent on reference groups, subjective norms have a large influence on individual views (Bin-Nashwan et al, 2022;Chong et al, 2021). According to one study, social pressure from friends, family, spouses, and other groups was the impetus for people to invest in government-issued Sukuk online in order to speed up economic development after COVID-19 (Bin-Nashwan et al, 2022).…”

“…National pride is a feeling of love, attachment, and a feeling of wanting to serve the community or residents of the country or homeland (Bin-Nashwan et al, 2022). National pride is essential, especially in recovering the country's economy after the COVID-19 pandemic (Bin-Nashwan et al, 2022).…”

“…National pride is a feeling of love, attachment, and a feeling of wanting to serve the community or residents of the country or homeland (Bin-Nashwan et al, 2022). National pride is essential, especially in recovering the country's economy after the COVID-19 pandemic (Bin-Nashwan et al, 2022). The state of crisis during the COVID-19 pandemic is tied to one's ideology and sense of nationalism; when national policies are consistent with their ideology, people tend to support them; when they are inconsistent, people tend to reject national policies related to the COVID-19 pandemic (Su & Shen, 2021).…”

“…While Afif et al (2018) and Chong et al (2021) focus on online stock investment, Shulhan and Oetama (2019) and Rahadi et al (2021) employ TAM and UTAUT theories to describe the intention of utilizing mutual fund investment online platforms. Another study that describes the online investing platform is one conducted by Bin-Nashwan et al (2022), who combined Social Cognitive Theory (SCT) and TAM to assess the intention of using government sukuk digital investment. TAM and TPB theories were largely used in previous studies to analyze intentions to use online capital market investing platforms.…”