 TRADE-OFF BETWEEN WORKING CAPITAL AND FIXED INVESTMENT UNDER SHARIAH COMPLIANCE AND ISLAMIC ADHERENCEHan-Fang Tsai The International Journal of Business and Finance Research, 2023, vol. 17, issue 1, 35-48 Abstract: This study investigates whether Shariah (Islamic Law) compliance and Islam adherence influence the relationship between working capital and fixed investment, as well as, whether this relationship further affects firm performance. Using a sample of firms listed on the Indonesia Stock Exchange over the period 2011-2018, we find that the relationship between working capital and fixed investment is linear for Shariahcompliant firms, however, this relationship is non-linear for non-Shariah-compliant firms. In addition, the result also shows that non-Shariah-compliant firms with higher working capital/fixed investment ratio have a better firm performance, however, this effect does not exist for Shariah-compliant firms. Finally, Muslim proportion of city exerts influence on the relationship between working capital/fixed investment ratio and firm performance, but Muslim proportion of province does not have this influence. Keywords: Shariah; Islam Adherence; Working Capital Investment; Fixed Investment; Firm Performance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ibf:ijbfre:v:17:y:2022:i:1:p:35-48 Access Statistics for this article The International Journal of Business and Finance Research is currently edited by Terrance Jalbert More articles in The International Journal of Business and Finance Research from The Institute for Business and Finance Research |
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