This article is determined to check the effects of sukuk issuance on the economic growth of the Islamic countries (Bahrain, Indonesia, Malaysia, Pakistan, Saudi Arabia and United Arab Emirates). The current research has employed a dynamic panel cointegration model pooled mean group/autoregressive distributed lag (PMG/ARDL) and panel causality test to analyse the causal relationship among the study variables. The quarter data have been collected for the period of 2005–2000. The result supports the ‘Schumpeter’s supply leading hypothesis’ that enforces sukuks, leading to economic growth in the Islamic countries in the long run. The findings of this study would facilitate the policymakers in formulating the Islamic financial reforms, which would further make the Islamic financial systems more efficient in stimulating investments/financing that ultimately would enhance economic growth in the long run.
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