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Financial Performance: Sustainability, Size, Shariah, And Sector Effects In Muslim-Minority Stock Exchanges

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  • Dwi Kartikasari

    (Politeknik Negeri Batam, Indonesia)

Abstract

Sustainability and halal stocks have become increasingly popular in the digital and globalized world after the COVID-19 pandemic, even in Muslim-minority developed countries. This study examines whether there exist sustainability, size, Shariah compliance, sector, and stock exchange effects in financial performance. We collect the cross-section data for 2022–2023 covering 270 public-listed companies. These include earning-per-share (EPS) representing performance, market capitalization representing firm size, and business sectors from Compustat, halal status and level from Musaffa, and Environmental, Social, and Governance (ESG) rating and risk representing sustainability from Sustainalytics. Using the partial least square structural equation model (PLS-SEM), we discover the significance of sustainability and size but the debatably significant moderating effect of Shariah, sector, and stock exchange on performance. We explain these findings by the Stakeholder Theory and Resource-Based View. These results should prove beneficial to managers in backing their green and Shariah compliance strategies for financial performance.

Suggested Citation

  • Dwi Kartikasari, 2023. "Financial Performance: Sustainability, Size, Shariah, And Sector Effects In Muslim-Minority Stock Exchanges," Journal of Islamic Monetary Economics and Finance, Bank Indonesia, vol. 9(4), pages 751-776, December.
    • Handle: RePEc:idn:jimfjn:v:9:y:2023:i:4h:p:751-776
    DOI: https://doi.org/10.21098/jimf.v9i4.1765
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    More about this item

    Keywords

    Sustainability; Shariah; Firm size; Financial performance; Muslim-minority;
    All these keywords.

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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