Impact Of Shariah Compliance on the Performance of Firms

Abstract

This study aims to interrogate the impact of shariah compliant companies of the performance of the firms. It was hypothesized in the literature that shariah compliant companies have a significant and positive impact on the performance of the firms. Shariah complaint companies are identified with the use of low leverage level. Based on this evidence, it is expected that shariah compliant companies have a significant and sub sequential impact on the performance of the firms. The results are based on the secondary data that was extracted from the financial statements of 10 shariah compliant companies. This study has employed the statistical tool of SPSS v23.0 to explore the relationship between shariah compliant companies and performance of the firms. It has been indicated by this study at the end that shariah compliance feature has a positive and sub sequential influence on performance of the firms. The positive sign indicates the increase in level of performance of the firms. The findings of this study help the investors and researchers to better understand the effect of shariah compliant companies on the performance of the firms.