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Corporate Attributes Influencing the Compliance of Islamic Finance: Evidence from Listed Companies under Shariah Index in India

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DOI: 10.4236/tel.2019.96112    56 Downloads   155 Views

ABSTRACT

The aim of this paper is to provide empirical evidence relating to the factors influencing the compliance of Islamic finance by Indian corporate sector. The sample comprised of the whole population of Shariah companies numbered as 190 consisted in the 500 Shariah and Nifty Shariah indices during the period of 2009 till 2014. However, after making the necessary filtration due to unavailability of data, the actual size of the sample came out to be 136 companies. The relationship between factors and the extent of compliance were analysed using Panel data regression model. The results evident that companies of larger size and higher growth rate have significant mandatory compliance. Whereas, firm size examined with net sales and board independence has withstood with compliance of voluntary and overall measures. The significant implication of our results is that it provided information on firm specific characteristics for the investors who are looking for investment in Shariah compliant companies. In this way investor would be able to keep an eye on their investment. These results may also be advantageous to the regulators in making decisions. Distinct from previous empirical research concerning to Islamic social reporting in Muslim and non-Muslim countries, this study examines the factors affecting the extent of Shariah compliance by the companies listed under Shariah Index in Indian stock exchange.

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Nobi, K. , Singh, M. and Aggarwal, A. (2019) Corporate Attributes Influencing the Compliance of Islamic Finance: Evidence from Listed Companies under Shariah Index in India. Theoretical Economics Letters, 9, 1744-1771. doi: 10.4236/tel.2019.96112.

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