TY  - JOUR
T1  - Capital Structure Speed of Adjustment and Shari’ah Compliance:
Empirical Evidence from Malaysia
AU - Iqbal Hussain, Hafezali AU - Sinaga, H. Obsatar AU - M Saudi, M. Haizam AU - Hilmi Nadzri, Firdaus AU - M. Saudi, Nur Surayya AU - Nazrul Azizi, Mohd AU - Shamsudin, Mohd Farid 
JO  - Journal of Engineering and Applied Sciences
VL  - 13
IS  - 8
SP  - 2103
EP  - 2107
PY  - 2018
DA  - 2001/08/19
SN  - 1816-949x
DO  - jeasci.2018.2103.2107
UR  - https://makhillpublications.co/view-article.php?doi=jeasci.2018.2103.2107
KW  - Capital structure
KW  -speed of adjustment
KW  -Shari`ah compliance
KW  -Islamic finance
KW  -notion
KW  -firms
AB  - The study empirically tests the speed of adjustment of a sample of Malaysian firms. We find that
Shari’ah compliance influences the speed of adjustment implying that cost of capital for Shari’ah compliant
firms differ from non-compliant firms. Our tests further show that Shari’ah compliant companies whose leverage
leves are above target tend to adjust more rapidly to target levels than non-compliant firms. The evidence
provides an opposite conclusion on firms below target levels. The findings provide a notion of debt versus
equity choice for Shari’ah compliant firms versus non-compliant firms indicating that preference is guided by
implied cost of capital which differs based on the extent of current leverage levels.
ER  -