Determinants of Sharia-compliant and Non-compliant Capital Structure in the Cyclical Consumer Sector
DOI:
https://doi.org/10.30588/jmp.v13i2.1687Keywords:
Earnings volatility, Firm size, Leverage, Liquidity, ProfitabilityAbstract
Indonesia is a predominantly Muslim country, so investing in stock instruments that comply with Sharia provisions is a major concern for investors in Indonesia. This research aims to compare the determining factors of capital structure in Sharia and non-sharia companies. This research sample used a purposive sampling method to obtain 66 shariah-compliant and 30 noncompliant companies from the cyclical consumer sector listed on the Indonesia Stock Exchange form 2020-2022 and used panel data regression. Profitability and liquidity have a negative effect on shariah-compliant and noncompliant leverage. Size has a positive effect on shariah-compliant and noncompliant leverage. EVAL has a negative effect on shariah-compliant market leverage and a significant positive effect on noncompliant book leverage. In noncompliant, GDPG has a positive effect on market leverage. The novelty of this study is to add business risk as an independent variable. This study is expected to guide financial managers on the use optimal capital structure in sharia and non-sharia companies to increase the shareholders wealth. Investors are recommended to choose enterprises with high level of profitability, liquidity and size, as well as low earnings volatility.
References
Ahmeti, Y., Kalimashi, A., Ahmeti, A., & Ahmeti, S. (2023). The Capital Structure Determinants on Banking Sector of Western Balkan Countries. Ekonomika, 102(1). https://doi.org/10.15388/Ekon.2023.102.1.6
Akbar, S., Khan, S., Haq, Z. U., & Khan, M. I. (2023). Capital structure dynamics of Shariah-compliant vs noncompliant firms: evidence from Pakistan. International Journal of Islamic and Middle Eastern Finance and Management, 16(2), 366–383. https://doi.org/10.1108/IMEFM-06-2021-0239
Al-Harby, A. (2019). Factors Affecting Capital Structure of Conventional and Islamic Banks: Evidence from MENA Region. Global Review of Islamic Economics and Business, 7(2), 069. https://doi.org/10.14421/grieb.2019.072-02
Ali, S., Rangone, A., & Farooq, M. (2022a). Corporate Taxation and Firm-Specific Determinants of Capital Structure: Evidence from the UK and US Multinational Firms. Journal of Risk and Financial Management, 15(2). https://doi.org/10.3390/jrfm15020055
Ali, S., Rangone, A., & Farooq, M. (2022b). Corporate Taxation and Firm-Specific Determinants of Capital Structure: Evidence from the UK and US Multinational Firms. Journal of Risk and Financial Management, 15(2), 55. https://doi.org/10.3390/jrfm15020055
Ali, S., Rangone, A., & Farooq, M. (2022c). Corporate Taxation and Firm-Specific Determinants of Capital Structure: Evidence from the UK and US Multinational Firms. Journal of Risk and Financial Management, 15(2), 55. https://doi.org/10.3390/jrfm15020055
Almustafa, H., & Kalash, I. (2022). The dynamic relationship between firms’ cash reserves and financial leverage: evidence from MENA emerging markets. Journal of Economic and Administrative Sciences. https://doi.org/10.1108/jeas-05-2022-0121
Alnori, F., & Alqahtani, F. (2019a). Capital structure and speed of adjustment in non-financial firms: Does sharia compliance matter? Evidence from Saudi Arabia. Emerging Markets Review, 39, 50–67. https://doi.org/10.1016/j.ememar.2019.03.008
Alnori, F., & Alqahtani, F. (2019b). Capital structure and speed of adjustment in non-financial firms: Does sharia compliance matter? Evidence from Saudi Arabia. Emerging Markets Review, 39, 50–67. https://doi.org/10.1016/j.ememar.2019.03.008
Amin, H. I. M., & Cek, K. (2023). The Effect of Golden Ratio-Based Capital Structure on Firm’s Financial Performance. Sustainability, 15(9), 7424. https://doi.org/10.3390/su15097424
Amin, M. A. N., & Azis, L. A. (2023). Pengaruh Growth Opportunity, Pertumbuhan Aset, Profitabilitas, dan Risiko Bisnis Terhadap Struktur Modal pada Perusahaan Properti dan Real Estate yang Terdaftar di Bursa Efek Indonesia Tahun 2017-2021. Jurnal Manajemen Fakultas Ekonomi Dan Bisnis Universitas Bina Bangsa, 3(1), 132–151. https://doi.org/10.46306/vls.v3i1.168
Anggriani, F., Mardani, R. M., & Mustapita, A. F. (2020). Pengaruh Profitabilitas, Growth opportunity, Likuiditas Terhadap Struktur Modal (Studi Kasus Perusahaan Manufaktur Yang Terdaftar Di BEI Periode 2016-2018). Jurnal Riset Manajemen, 28–29.
Anwar, S. (2019). The Influence of Ownership Structure, Asset Structure, and Earning Volatility on Debt Policy in Indonesia. Journal of Accounting and Strategic Finance, 2(1), 93–106. https://doi.org/10.33005/jasf.v2i1.54
Asikin, N., Ruwanti, S., & Fatahurrazak. (2019). Pengaruh Struktur Aset dan Growth Opportunity terhadap Struktur Modal dengan Ukuran Perusahaan sebagai Variabel Moderasi pada Perusahaan Manufaktur yang Terdaftar di BEI Periode 2014 - 2017. Universitas Maritim Raja Ali Haji .
Azmi, W., Hassan, M. K., Houston, R., & Karim, M. S. (2021). ESG activities and banking performance: International evidence from emerging economies. Journal of International Financial Markets, Institutions and Money, 70, 101277. https://doi.org/10.1016/j.intfin.2020.101277
Bhat, D. A., Chanda, U., & Bhat, A. K. (2023). Does Firm Size Influence Leverage? Evidence from India. Global Business Review, 24(1), 21–30. https://doi.org/10.1177/0972150919891616
Boateng, P. Y., Ahamed, B. I., Soku, M. G., Addo, S. O., & Tetteh, L. A. (2022). Influencing factors that determine capital structure decisions: A review from the past to present. Cogent Business & Management, 9(1). https://doi.org/10.1080/23311975.2022.2152647
Bugshan, A. salem, Alnori, F., & Bakry, W. (2021). Shariah Compliance and Corporate Cash Holdings. Research in International Business and Finance. https://doi.org/10.2139/ssrn.3581440
Cheong, C. W. H. (2021). Risk, resilience, and Shariah-compliance. Research in International Business and Finance, 55. https://doi.org/10.1016/j.ribaf.2020.101313
Cindy, M., Leon, F. M., & Purba, Y. E. (2023). Determinants of Cash Holding of Shariah and Non-Shariah-Compliant Firms at Indonesia Stock Exchange. The International Journal of Business & Management, 11(1). https://doi.org/10.24940/theijbm/2023/v11/i1/BM2301-009
Hakim, M. Z., & Apriliani, D. (2020). EFFECT OF PROFITABILITY, LIQUIDITY, SALES GROWTH, BUSINESS RISK, AND ASSET STRUCTURE ON CAPITAL STRUCTURE. Jurnal Akademi Akuntansi, 3(2), 224–243. https://doi.org/10.22219/jaa.v3i2.12115
Hussain, H. I., Ali, M., Hassan, M. K., & El-Khatib, R. (2023). Asymmetric capital structure speed of adjustment, equity mispricing and Shari’ah compliance of Malaysian firms. International Review of Economics & Finance, 86, 965–975. https://doi.org/10.1016/j.iref.2020.10.017
Indriani, V., & Rochdianingrum, W. A. (2022). Pengaruh Inflasi, Kurs, Kebijakan Moneter, dan PDB terhadap Harga Saham Sektor Perbankan yang terdaftar di BEI. Jurnal Ilmu Dan Riset Manajemen, 11(4).
Kadim, A., & Sunardi, N. (2019). Pengaruh Profitabilitas ,Ukuran Perusahaan Terhadap Leverage Implikasi Terhadap Nilai Perusahaan Cosmetics and Household yang terdaftar di Bursa Efek Indonesia. Jurnal SEKURITAS (Saham, Ekonomi, Keuangan Dan Investasi), 3(1), 22. https://doi.org/10.32493/skt.v3i1.3270
Kahya, E. H., Ersen, H. Y., Ekinci, C., Taş, O., & Simsek, K. D. (2020). Determinants of capital structure for firms in an Islamic equity index: comparing developed and developing countries. Journal of Capital Markets Studies, 4(2), 167–191. https://doi.org/10.1108/JCMS-07-2020-0023
Kalash, İ. (2019). Firm Leverage, Agency Costs and Firm Performance: An Empirical Research on Service Firms in Turkey. İnsan ve Toplum Bilimleri Araştırmaları Dergisi, 8(1), 624–636. https://doi.org/10.15869/itobiad.513268
Kasmir. (2019). Analisis Laporan Keuangan (12th ed.). PT. Rajagrafindo Persada.
Kepramareni, P., Pradnyawati, S. O., & Muliahati, K. A. (2023). Analysis of the Effect Using Financial Ratios, Ownership and Corporate Size on Corporate Value in Food and Beverage Corporate. International Journal of Applied Business and International Management, 8(1), 101–112. https://doi.org/10.32535/ijabim.v8i1.2077
Krisnando, K., & Novitasari, R. (2021). Pengaruh Struktur Modal, Pertumbuhan Perusahaan, dan Firm Size terhadap Nilai Perusahaan Pada Perusahaan Consumer Goods yang Terdaftar di Bursa Efek Indonesia (BEI) Periode 2017-2020. Jurnal Akuntansi Dan Manajemen, 18(02), 71–81. https://doi.org/10.36406/jam.v18i02.436
Kumar Panigrahi, A., Kalyan Chaudhury, S., & Ranjan Swain, K. (2021). Does capital structure affect profitability? Evidence from Indian IT Companies. Journal of Management Research and Analysis, 8(1), 15–22. https://doi.org/10.18231/j.jmra.2021.005
Kusuma, R. P., Hayati, F. R., & Leon, F. M. (2021). Pengaruh Book Value, Market Value dan Debt Maturity dari Leverage Terhadap Green Firm Investment Dimoderasi oleh Firm Size dan Firm Age. Jurnal OPTIMA , 5(1), 22–30.
Muliani, Rico Nur Ilham, Chairil Akhyar, & Siti Maimunah. (2023). THE INFLUENCE OF PROFIT MANAGEMENT AND FINANCIAL PERFORMANCE ON COMPANY VALUE IN BUILDING MATERIALS CONSTRUCTION SUB-SECTOR COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE FOR THE 2018-2021 PERIOD. Journal of Accounting Research, Utility Finance and Digital Assets, 1(4), 323–335. https://doi.org/10.54443/jaruda.v1i4.52
Prihadi, T. (2020). Analisis Laporan Keuangan (2nd ed.). PT Gramedia Pustaka Utama.
Puspita, I., & Dewi, S. K. S. (2019). PENGARUH PROFITABILITAS, RISIKO BISNIS DAN TINGKAT SUKU BUNGA TERHADAP STRUKTUR MODAL. E-Jurnal Manajemen, 8(4), 2152–2179. https://doi.org/10.24843/EJMUNUD.2019.v8.i4.p10
Putra, M. R. A. (2021). Analisis Pertumbuhan Gross Domestic Product (GDP) Negara ASEAN Tahun 2015 - 2019. Universitas Muhammadiyah Surakarta.
Rahim, N., Mat Nor, F., Ramli, N., & Marzuki, A. (2020). Determinants of Capital Structure for Malaysian Shariah-Compliant Firms: The Impact of Revised Screening Methodology. International Journal of Banking and Finance, 14. https://doi.org/10.32890/ijbf2019.14.0.9911
Rashid, M., Johari, D. S. N. K. P. H., & Izadi, S. (2023). National culture and capital structure of the Shariah compliant firms: Evidence from Malaysia, Saudi Arabia and Pakistan. International Review of Economics & Finance, 86, 949–964. https://doi.org/10.1016/j.iref.2020.10.006
Saif-Alyousfi, A. Y. H., Md-Rus, R., Taufil-Mohd, K. N., Mohd Taib, H., & Shahar, H. K. (2020). Determinants of capital structure: evidence from Malaysian firms. Asia-Pacific Journal of Business Administration, 12(3/4), 283–326. https://doi.org/10.1108/APJBA-09-2019-0202
Stamenković, S., Stanišić, N., & Radojević, T. (2023). Determinants of European telecom operators’ capital structure. Ekonomika Preduzeca, 71(3–4), 178–191. https://doi.org/10.5937/ekopre2303178s
Stock, J. H., & Watson, M. W. (2020). Introduction to Econometrics (4th ed.). Pearson Education.
Sugiyanto, & Ikhsan, S. (2022). The Effect of Return on Equity, Current Ratio, and Earnings Volatility on Capital Structure. International Journal of Social Science and Business, 6(4), 478–485. https://doi.org/10.23887/ijssb.v6i4.50318
Supriyono, M., Syaputri, M., Yunita, M., Lestari, W., & Ruhiyat, E. (2020). Pengaruh Non Debt Tax Shield dan Resiko Bisnis Terhadap Struktur Modal. Insentif Pajak Untuk WP Terdampak Covid-19, 42–49.
Toni, N., Simorangkir, E., & Hebert, K. (2021). Praktik Perataan Laba (Income Smoothing) Perusahaan : Strategi Peningkatan Profitabilitas, Financial Leverage, Dan Kebijakan Dividen Bagi Perusahaan (Abdul, Ed.; 1st ed.). Penerbit Adab.
Tran Minh, H. P., Nguyen Thi, K., & Thi Be, L. P. (2022). The non-linear impact of financial leverage on cash holdings: Empirical evidence from Vietnam. Cogent Business & Management, 9(1). https://doi.org/10.1080/23311975.2022.2114304
Unsal, O., & Hassan, M. K. (2020). Employee lawsuits and capital structure. Review of Managerial Science, 14(3), 663–704. https://doi.org/10.1007/s11846-018-0304-1
Widodo, P. (2020, September 15). Study About Targeted Leverage Determinant Behavior and Speed of Adjustment in Secondary and Tertiary Sectors in Indonesia Stock Exchange. Proceedings of the International Conference on Management, Accounting, and Economy (ICMAE 2020). https://doi.org/10.2991/aebmr.k.200915.043
Wijaya, B. S., & Ardini, L. (2020). Pengaruh Profitabilitas, Growth Opportunity dan Firm Size terhadap Struktur Modal. Jurnal Ilmu Dan Riset Akuntansi, 9(2), 1–14.
Wulandari, N. P. I., & Artini, L. G. S. (2019). PENGARUH LIKUIDITAS, NON-DEBT TAX SHIELD, UKURAN PERUSAHAAN DAN PERTUMBUHAN PENJUALAN TERHADAP STRUKTUR MODAL. E-Jurnal Manajemen Universitas Udayana, 8(6), 3560. https://doi.org/10.24843/EJMUNUD.2019.v08.i06.p10
Yousef, I. (2019). The Determinants of Capital Structure: Evidence from GCC and UK Real Estate Sectors. Real Estate Management and Valuation, 27(2), 108–125. https://doi.org/10.2478/remav-2019-0019
Zafar, Q., Wongsurawat, W., & Camino, D. (2019). The determinants of leverage decisions: Evidence from Asian emerging markets. Cogent Economics & Finance, 7(1), 1598836. https://doi.org/10.1080/23322039.2019.1598836
Downloads
Published
How to Cite
Issue
Section
License
Authors who publish with Jurnal Maksipreneur agree to the following terms:
Authors retain copyright and grant the Jurnal Maksipreneur right of first publication with the work simultaneously licensed under a Creative Commons Attribution 4.0 International License that allows others to share (copy and redistribute the material in any medium or format) and adapt (remix, transform, and build upon the material) the work for any purpose, even commercially with an acknowledgment of the work's authorship and initial publication in Jurnal Maksipreneur.
Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in Jurnal Maksipreneur. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).