Abstract: Focusing on the sukuk market in Malaysia during 2000–2017, this study investigates the determinants of sukuk issuance by type. First, we find that both, high and low information asymmetric firms, can choose a cost-plus-sales-based Murabahah sukuk for their small and short-term funding. Second, a low information asymmetric firm prefers a profit-and-loss sharing-based Musyarakah sukuk, while a high information asymmetric firm issues a lease-based Ijarah sukuk for large and long-term funding. We, therefore, conclude that sukuk issuance also follows a financial hierarchy in accordance with the agency costs of each financial methodology required, when the specific sukuk is chosen.(END)