TY - GEN
T1 - Determinants of Capital Structure
T2 - 4th International Conference on E-commerce, E-Business and E-Government, ICEEG 2020
AU - Lubis, Arief Wibisono
AU - Paramaanindya, Dyatmika
N1 - Funding Information:
We would like to thank PUTI Grant from Universitas Indonesia.
Publisher Copyright:
© 2020 ACM.
Copyright:
Copyright 2020 Elsevier B.V., All rights reserved.
PY - 2020/6/17
Y1 - 2020/6/17
N2 - Islamic fnance is a subject that is no longer reserved for Muslims around the world, and the usage of Islamic fnance is now widely accepted. In Indonesia, to meet with the increasing demand, OJK launched three indices dedicated to sharia-compliant stocks. In doing so, the organization has come up with a list of criteria that a frm needs to meet to be classifed as sharia-compliant. One of which is that a sharia compliant frm must maintain a debt level below 45%. Sharia-compliant frms are then expected to behave differently from sharia non-compliant frms that do not have this restriction placed upon them in terms of capital structure. This study aims to examine and compare the determinants of capital structure among sharia-compliant and non-compliant frms in Indonesia, using a cross-sectional data of all frms in Indonesia that are listed in 2017. We used four independent variables to predict capital structure: proftability, frm size, tangibility, and business risk. The result is there are variables that do affect sharia compliant and non-compliant frms differently, with some variables being signifcant for sharia non-compliant frms but not signifcant for compliant frms. For example, the variable proftability was found to be signifcant for sharia non-compliant frms, but not for sharia compliant frms.
AB - Islamic fnance is a subject that is no longer reserved for Muslims around the world, and the usage of Islamic fnance is now widely accepted. In Indonesia, to meet with the increasing demand, OJK launched three indices dedicated to sharia-compliant stocks. In doing so, the organization has come up with a list of criteria that a frm needs to meet to be classifed as sharia-compliant. One of which is that a sharia compliant frm must maintain a debt level below 45%. Sharia-compliant frms are then expected to behave differently from sharia non-compliant frms that do not have this restriction placed upon them in terms of capital structure. This study aims to examine and compare the determinants of capital structure among sharia-compliant and non-compliant frms in Indonesia, using a cross-sectional data of all frms in Indonesia that are listed in 2017. We used four independent variables to predict capital structure: proftability, frm size, tangibility, and business risk. The result is there are variables that do affect sharia compliant and non-compliant frms differently, with some variables being signifcant for sharia non-compliant frms but not signifcant for compliant frms. For example, the variable proftability was found to be signifcant for sharia non-compliant frms, but not for sharia compliant frms.
KW - Capital Structure
KW - Leverage
KW - Pecking Order Theory
KW - Sharia Compliant
KW - Trade-Off Theory
UR - http://www.scopus.com/inward/record.url?scp=85094813263&partnerID=8YFLogxK
U2 - 10.1145/3409929.3414735
DO - 10.1145/3409929.3414735
M3 - Conference contribution
AN - SCOPUS:85094813263
T3 - ACM International Conference Proceeding Series
SP - 39
EP - 44
BT - ICEEG 2020 - 2020 4th International Conference on E-commerce, E-Business and E-Government
PB - Association for Computing Machinery
Y2 - 17 June 2020 through 19 June 2020
ER -