Macroeconomy Impact On Indonesia's Islamic Stocks Capital Structure

Rizal Ma'ruf Amidy Siregar (Universitas Islam Negeri Syekh Ali Hasan Ahmad Addary, Indonesia)

Abstract


The choice of an appropriate source of funds that comes from the internal and external of the company (capital structure) dramatically affects the company's value. There is no exception for Sharia-compliant companies (SCC) in the Indonesian capital market. This study aims to determine what macroeconomic factors influence the SCC's capital structure. It was challenging to find any research investigating the effect of interest rates on SCC's capital structure in Indonesia. This research showed that interest rate (SBBI - calculated from the annual average of BI-7 days Repo Rate) positively correlates with Indonesia's sharia stocks capital structure. At the same time, Inflation and GDP do not affect the SCC capital structure in Indonesia. That means SCC can not avoid the impact of interest rates, even though interest is forbidden for SCC. The author predicts the leading cause of this phenomenon is that most Indonesian companies still depend on interest in their business.

Keywords


Sharia Capital Structure, Macroeconomy, Indonesia Capital Market

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References


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DOI: https://doi.org/10.24952/bay.v2i2.9910

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