Board structure, ownership structure, and capital structure: empirical evidence on Shariah and non-Shariah compliant firms in Indonesia

Rahman Bayuny, Ahmad Fadlur and Haron, Razali (2023) Board structure, ownership structure, and capital structure: empirical evidence on Shariah and non-Shariah compliant firms in Indonesia. Banks and Bank Systems, 18 (4). pp. 241-254. ISSN 1816-7403 E-ISSN 1991-7074

	PDF (Journal) - Published Version Restricted to Repository staff only Download (493kB) | Request a copy
Preview	PDF (Scopus) - Supplemental Material Download (198kB) | Preview

Abstract

The main purpose of this study is to investigate the impact of board structure and ownership structure on capital structure of Shariah-compliant firms and Non-Shariahcompliant firms in Indonesia. The study used the Generalized Method of Moments to analyze the relationship by applying 2,739 data observations of non-financial companies registered on the Indonesia Stock Exchange. This study uses commissionaire size, director size, female director, female commissionaire, independent director, and independent commissionaire as proxies for board structure, and ownership concentration and government ownership for ownership structure. The results showed that for Sharia-compliant firms, the relevant determinants are all variables of board structure and ownership structure except independent director. For Sharia non-compliant firms, the only non-relevant determinants are female director and commissionaire size. Interestingly, most of the board structure variables in Shariah compliant firms indicate a strong negative relationship with capital structure of firms (except total commissionaire). This may indicate that board structure of Shariah compliant firms strives to lower the leverage level of the firm. This may also indicate that most managers of Shariah compliant firms are risk averse.

Item Type:	Article (Journal)
Uncontrolled Keywords:	capital structure, board structure, ownership structure, sustainable growth
Subjects:	H Social Sciences > HG Finance > HG4001 Financial management. Business finance. Corporation finance.
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Institute of Islamic Banking & Finance (IIiBF)
Depositing User:	Dr. Razali Haron
Date Deposited:	06 Dec 2023 11:48
Last Modified:	15 Jan 2024 08:42
URI:	http://irep.iium.edu.my/id/eprint/108573

Actions (login required)

View Item