The Moderating Effect of Shariah Governance on Financial and Maqasid Shariah Performance: Evidence from Islamic Banks in Indonesia

Lia Dahlia Iryani*, Winwin Yadiati, Eddy Mulyadi Supardi and Iwan Triyuwono
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Lia Dahlia Iryani*: Doctoral Student of Accounting Program Padjadjaran University and Lecturer at the Faculty of Economic, Pakuan University, Jalan Pakuan PO Box 452 Bogor 16143, West Java, Indonesia
Winwin Yadiati: Lecturer and researcher at Departement of Accounting, Padjadjaran University, Jalan Dipati Ukur 35, Bandung 40132, West Java, Indonesia
Eddy Mulyadi Supardi: Lecturer at the Faculty of Economic, Pakuan University, Jalan Pakuan PO Box 452 Bogor 16143, West Java Indonesia
Iwan Triyuwono: Lecturer and researcher at the Faculty of Economic and Business, University of Brawijaya, Jalan Mayjend Haryono 165, Malang 65145, East Java Indonesia

The Journal of Social Sciences Research, 2019, vol. 5, issue 2, 264-274

Abstract: The aim of this research is to assess the effect of financial performance to Maqasid Shariah performance with shariah governance as a moderating variable. Financial performance can be measured based on three criteria: firm size (FS), return on asset (ROA) and asset structure, while Maqasid Shariah performance is measured by zakat, infaq, shadaqoh and awqaf (ZISWAF) and qordhul hasan (QH). Shariah governance (SG) is measured by the proportion of independent board of commissioners’ members, board size, audit committee, and shariah supervisory board.  The data in this study are the secondary data from Islamic Banking Financial Report (IBFR) of 2012-2016. This research employed a quantitative approach with panel data regression using E-views 9.0 software. The method for the data analysis used factor analysis. The results show that the effects of FS and ROA on Maqasid Shariah performance are significant, and the implementation of shariah governance is generally proven to play a significant role in moderating the effect of FS and ROA on Maqasid Shariah performance. The better the implementation of SG, the stronger the predictability of Maqasid Shariah, and shariah governance has a positive effect on Maqasid Shariah.

Keywords: Proportion of independent board of commissioners; Board size, audit committee; Shariah Supervisory Board (SSB); Financial performance; ZISW; Qardhul hasan. (search for similar items in EconPapers)
Date: 2019
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