Proceedings of the International Conference on Economics and Banking 2015

Impact of Firm Leverage to Performance: Evidence from Shariah and Non-Shariah Compliant Companies in Malaysia

Authors
Wan Shahzlinda Shah Bt Shahar, Wan Shahdila Shah Bt Shahar
Corresponding Author
Wan Shahzlinda Shah Bt Shahar
Available Online May 2015.
DOI
10.2991/iceb-15.2015.21How to use a DOI?
Keywords
Firm leverage, Debt Ratio, Short Term Debt, Long Term Debt, Return on Asset, Return on Equity, Market to Book Value
Abstract

This study are meant to investigates the impact firm leverage towards the performance of Shariah compliant listed companies with the non-compliant Shariah listed companies and to discover on their firm leverage practices from each other. A total 70 construction companies listed in Securities Commission Malaysia (SC) main board belonging to construction sector for Shariah and non-Shariah compliant listed companies are analyzed covering the period from 2008 until 2012. Using pooled ordinary least square (POLS) method and generalized least square (GLS) with random and fixed effects, the results clearly indicated that firm leverage’s choice between Shariah and non-Shariah compliant companies are totally difference. It shows that debt ratio does not give an impact towards Shariah compliant company’s performance based on return in asset (ROA) and return on equity (ROE) but short-term debt and long-term debt does give an impact to Shariah compliant company’s performance based on Market-to-book value (MTBV) with negative relationship. On the other hand, in Non-Shariah Compliance Company, inverse result shows when long-term debt and total debt does give an impact to Non-Shariah compliant company’s performance based on ROE. While, size also represent a positive relationship toward N0n-Shariah compliant company’s performance

Copyright
© 2015, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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Volume Title
Proceedings of the International Conference on Economics and Banking 2015
Series
Advances in Economics, Business and Management Research
Publication Date
May 2015
ISBN
978-94-62520-86-8
ISSN
2352-5428
DOI
10.2991/iceb-15.2015.21How to use a DOI?
Copyright
© 2015, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

TY  - CONF
AU  - Wan Shahzlinda Shah Bt Shahar
AU  - Wan Shahdila Shah Bt Shahar
PY  - 2015/05
DA  - 2015/05
TI  - Impact of Firm Leverage to Performance: Evidence from Shariah and Non-Shariah Compliant Companies in Malaysia
BT  - Proceedings of the International Conference on Economics and Banking 2015
PB  - Atlantis Press
SP  - 140
EP  - 148
SN  - 2352-5428
UR  - https://doi.org/10.2991/iceb-15.2015.21
DO  - 10.2991/iceb-15.2015.21
ID  - ShahBtShahar2015/05
ER  -