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Capital structure puzzle: Does shariah compliance status matter?

The capital structure puzzle remains largely unanswered. Although some light have been shed on the dynamic forces that shapes the typical firm’s debt-to-equity mix, the case of the Shariah firm’s capital structure behaviour remains even more of a mystery. This paper attempts to investigate the capit...

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Main Authors: Halim, A.A., Sukor, M.E.A., Bacha, O.I.
Format: Conference or Workshop Item
Language:English
Published: 2017
Subjects:
Business
HG Finance
Online Access:http://eprints.um.edu.my/18509/1/Capital_Structure_Puzzle.pdf
http://eprints.um.edu.my/18509/
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spelling my.um.eprints.185092018-04-20T03:55:25Z http://eprints.um.edu.my/18509/ Capital structure puzzle: Does shariah compliance status matter? Halim, A.A. Sukor, M.E.A. Bacha, O.I. Business HG Finance The capital structure puzzle remains largely unanswered. Although some light have been shed on the dynamic forces that shapes the typical firm’s debt-to-equity mix, the case of the Shariah firm’s capital structure behaviour remains even more of a mystery. This paper attempts to investigate the capital structure behaviour of Shariah compliant firms of various levels as well those firms who are consistently Shariah noncompliant in Malaysia. The paper utilises a unique dataset of firms of heterogeneous level of Shariah compliancy status over a 20-year period from the year 1997 to 2016. The paper focuses on the effects of dynamic forces behind capital structure variation such as the optimal capital structure behavior based on the trade-off, pecking order, market timing and firm fixed effect models of capital structure. This study documents significant evidences in support of the trade-off theory with a high speed of adjustment (SOA) as well as for the time invariant firm fixed effects across all Shariah compliancy group. Nevertheless, this study’s findings show that there are evidences to suggest a moderate trend whereby as the Shariah compliancy group descend, stronger and stronger evidences of market timing behaviour appear amongst other things. This study suggests that segregating firms into different Shariah compliancy groups reveals a rich and diverse area of study which has never been delved in. 2017 Conference or Workshop Item PeerReviewed application/pdf en http://eprints.um.edu.my/18509/1/Capital_Structure_Puzzle.pdf Halim, A.A. and Sukor, M.E.A. and Bacha, O.I. (2017) Capital structure puzzle: Does shariah compliance status matter? In: 3rd International Conference on Islamic Perspective of Accounting, Finance, Economics and Management (IPAFEM 2017), 23-25 November 2017, Yildiz Technical University, Istanbul, Turkey.
institution Universiti Malaya
building UM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Malaya
content_source UM Research Repository
url_provider http://eprints.um.edu.my/
language English
topic Business
HG Finance
spellingShingle Business
HG Finance
Halim, A.A.
Sukor, M.E.A.
Bacha, O.I.
Capital structure puzzle: Does shariah compliance status matter?
description The capital structure puzzle remains largely unanswered. Although some light have been shed on the dynamic forces that shapes the typical firm’s debt-to-equity mix, the case of the Shariah firm’s capital structure behaviour remains even more of a mystery. This paper attempts to investigate the capital structure behaviour of Shariah compliant firms of various levels as well those firms who are consistently Shariah noncompliant in Malaysia. The paper utilises a unique dataset of firms of heterogeneous level of Shariah compliancy status over a 20-year period from the year 1997 to 2016. The paper focuses on the effects of dynamic forces behind capital structure variation such as the optimal capital structure behavior based on the trade-off, pecking order, market timing and firm fixed effect models of capital structure. This study documents significant evidences in support of the trade-off theory with a high speed of adjustment (SOA) as well as for the time invariant firm fixed effects across all Shariah compliancy group. Nevertheless, this study’s findings show that there are evidences to suggest a moderate trend whereby as the Shariah compliancy group descend, stronger and stronger evidences of market timing behaviour appear amongst other things. This study suggests that segregating firms into different Shariah compliancy groups reveals a rich and diverse area of study which has never been delved in.
format Conference or Workshop Item
author Halim, A.A.
Sukor, M.E.A.
Bacha, O.I.
author_facet Halim, A.A.
Sukor, M.E.A.
Bacha, O.I.
author_sort Halim, A.A.
title Capital structure puzzle: Does shariah compliance status matter?
title_short Capital structure puzzle: Does shariah compliance status matter?
title_full Capital structure puzzle: Does shariah compliance status matter?
title_fullStr Capital structure puzzle: Does shariah compliance status matter?
title_full_unstemmed Capital structure puzzle: Does shariah compliance status matter?
title_sort capital structure puzzle: does shariah compliance status matter?
publishDate 2017
url http://eprints.um.edu.my/18509/1/Capital_Structure_Puzzle.pdf
http://eprints.um.edu.my/18509/
_version_ 1643690723371909120
score 13.211869

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