1

Welcoming
WelcomingNote
Note––Project
ProjectOfficer
Officer

Dear BIES Conference 2021 participants,

 
We are delighted to welcome you to the Third British Islamic Economic Society (BIES)
Conference, an annual event of the Indonesia Islamic Economic Society in the United
Kingdom (Masyarakat Ekonomi Syariah United Kingdom—MES UK). 

The Theme of the BIES Conference 2021 is “Build Back Better: Islamic Finance and the Post-
COVID-19 Socio-Economic Development”. This theme aims to cover a range of socio-
economic development issues resulted from the COVID-19 outbreak. The pandemic has led
to the weaknesses of the existing political economy and challenged the socio-economic
establishment. Hence, any policy responses to these developmental challenges require the
recognition of organic and authentic theoretical, conceptual, and empirical research. 

This year’s conference is held in collaboration with the Durham Centre for Islamic Economics
and Finance (DCIEF) and Gulf One Lab for Computational & Economic Research (GOLCER),
Lancaster University Management School. Here, selected papers from students, researchers,
academics, practitioners, and regulators worldwide would be presented to shed light on
some of the most pressing Islamic finance and development issues by relying on theoretical,
conceptual, and empirical findings. This one-day online conference also includes an expert
panel session, where top-notch speakers in the field are invited.

I hope that the discussion will be engaging, provide new inspiration for your research, and
wish you outstanding academic achievements in the future.
  

Dhimas Rachman Taufiq

Project Officer
BIES Conference 2021

2
Welcoming Note – Chairman of MES UK
Welcoming Note – Chairman of MES UK

 The British Islamic Economic Society (BIES) Conference is now in its third edition and
continues to benefit from the outstanding contributions of worldwide scholars, researchers,
practitioners, and policymakers. We have received a significant number of submissions
requiring us to make some challenging decisions as to which paper should be included in
the programme. After a thorough discussion with the board of reviewers and considering
time constraints faced by online meeting, we only came up with ten outstanding papers for
this year’s conference.

The current conference is quite special due to the COVID-19 crisis. We are grateful that
despite the pandemic, BIES can still be organised online. The biennial conference held by
the Indonesia Islamic Economic Society in the United Kingdom (MES UK) has been
persistently aimed at bridging the gaps of the literature in Islamic economics and finance as
well as between theory and practice since 2017. This year, we put forward the socio-
economic development in light of the COVID-19 pandemic into the heart of our conference
topic, “Build Back Better: Islamic Finance and the Post-COVID-19 Socio-Economic
Development”.

We are honoured this year by the presence of three distinguished speakers – Professor
Mehmet Asutay of the Durham University Business School, Professor Marwan Izzeldin of
the Lancaster University Management School, and Dr Bridget Kustin of the Saïd Business
School, University of Oxford. Their expertise and experiences on the topic would bring
valuable insights to all audiences.

We are also delighted and thankful to our organising partner, the Durham Centre for
Islamic Economics and Finance (DCIEF), as well as to our supporting partner, the Lancaster
University’s Gulf One Lab for Computational & Economic Research (GOLCER).

Finally, we would like to warmly thank those who submitted, presented, and participated in
the programme. We wish you all an intellectually provoking and productive conference!

Wahyu Jatmiko
Chairman
Islamic Economic Society United Kingdom (MES UK)

3
 Invited Speakers’ Profile
Professor Mehmet Asutay, BA, MSc, PgDip, MA, PhD
Professor of Middle Eastern and Islamic Political Economy & Finance. Director of Durham
Centre for Islamic Economics and Finance.
Mehmet Asutay is a Professor of Middle Eastern
and Islamic Political Economy & Finance at the
Durham University Business School; iand the
Director of the Durham Centre in Islamic
Economics and Finance.
Mehmet’s teaching, research, publication, and
supervision of research is all in Islamic moral
economy/Islamic economics, Islamic finance and
banking, Islamic political economy, Islamic
governance and management and the Middle
Eastern political economies. His articles on his
research interest have been published in various
international academic journals and professional
magazines. He has also published and edited
books on aspects of Islamic moral economy and
Islamic finance, the latest of which are: A Model for
Islamic Development: An Approach in Islamic Moral
Economy (with S. Jan, 2019), Mapping the Risks
and Risk Management Practices in Islamic Banking
(with W. Eid, 2019).
Mehmet's recent research includes the
construction of Islamic moral economy and Islamic
4
political economy; and their articulation in
economic and sustainable development. In
addition, his research focused on locating Islamic
banking and finance within the expressed ideals of
Islamic moral economy by essentialising sharing
and collaborative economy nature of Islamic
finance. Mehmet is also involved in empirical
research in various aspects and dynamics of
Islamic banking and finance as well as examining
the political economy determinants and
consequences of various Islamic finance industry
development models.
Mehmet is the Editor in Chief of the American
Journal of Islamic and Society, the International
Journal of Islamic Economics and Finance Studies,
and the Review of Islamic Economics. He is also an
Associate Editor of the International Journal of
Islamic and Middle Eastern Finance and
Management, and a member of the Editorial
Advisory Board of the Journal of Islamic Accounting
and Business Research, and Borsa Istanbul Review
among other journals.
 Invited Speakers’ Profile
Dr Bridget Kustin
Research Fellow and Qualitative Lead, Saïd Business School, University of Oxford.
Bridget is an economic anthropologist (PhD,
Anthropology, Johns Hopkins University)
who studies the complexity and ethics of
corporations, financial systems, and the
humans interacting with them. She is a
Research Fellow and Qualitative Lead on The
Ownership Project at Saïd Business School,
University of Oxford. She is also a 2020-21
Early Career Research Fellow at the Skoll
Centre for Social Entrepreneurship.  Council of American Overseas Research
Her research engages the breadth of the
global wealth spectrum, from large family
businesses (annual revenue above $1
billion), to Islamic (micro)finance institutions
in Bangladesh and Pakistan serving the
world’s poorest, to international
development finance, through fieldwork at
the Islamic Development Bank in Saudi
Arabia and a position as a 2018-19 Fellow on
the World Economic Forum’s Global Future
Council on Development Finance. She has
developed research-based curricula for
5
family enterprises, next gens, and other
UHNWIs, including the Oxford Programme
on Responsible Ownership; and developed
the MBA course, “Reckoning with Racial
Capitalism: Diversity, Equity, and Inclusion in
Business.”
Bridget’s research has been supported by
the National Science Foundation, the
Centers, and the Institute for Money,
Technology, and Financial Inclusion. She has
consulted on financial inclusion for the Bill
and Melinda Gates Foundation’s Financial
Services for the Poor division and Islamic
Relief Worldwide. She speaks and reads
Bangla, held a 2012 research residency at
the Berlin Centre for Social Science
Research, and has taught at Johns Hopkins
University; SOAS, University of London; and
at the Saïd Business School.
 Invited Speakers’ Profile
Prof Marwan Izzeldin PhD SFHEA
Professor of Financial Econometrics
Professor Marwan Izzeldin is a professor of
financial econometrics at the Department of
Economics at Lancaster University, where he
is also the Director of Gulf One Lab for
Computational and Economic Research
(GOLCER). He holds a PhD in Finance from
the Cass Business School (London City
University) and an MA in Economics from
University College Dublin. Professor Izzeldin
is also actively engaged in several
consultancy, research and training projects
in the Middle East and Africa.
He has research interests in the area of
modelling and forecasting volatility using
high-frequency data. High-frequency data
are recorded at ‘fine’ intervals of time:
milliseconds and seconds. Hence, they can
provide us with a closer look at the
dynamics and the evolution of the price
process and its components (i.e., continuous
and discontinuous). His research in this area
addresses several topics, including that of
quantifying the information arrival process
6
to markets. This research is important in
that it provides a better understanding as to
how markets respond to various intensity
levels of information, not least during crisis
episodes. Current research interest includes
the use of different types of jumps and
classifications in forecasting, mixed sampling
frequency modelling and data compression
and machine learning.
Marwan have also research interests in
Banking / Islamic banking. Here, his research
contrasts the respective business models of
Islamic and conventional banks. In taking a
variety of perspectives, his work identifies
characteristics that explain the observed
resilience of Islamic banking following the
(2008) financial crisis. His research on
efficiency and productivity extends beyond
the comparison of Islamic and conventional
banking models. Most recently, he has been
looking at novel ways in measuring
productivity and efficiency using Bayesian
methods.
Conference Agenda

Start Duration
- End Event Description
* (minutes)
Opening Ceremony
07.00 - 07.05 5 Opening MC
07.05 - 07.10 5 Welcoming remarks 1 PO BIES 2021
07.10 - 07.15 5 Welcoming remarks 2 Director DCIEF or Chairman MES UK
07.15 - 07.20 5 Conference technicality MC
First Session Chair 1: Ikram Nur Muharram (University of Surrey)
07.20 - 07.35 15 Presentation 1 Nur Azifah & Siti Rahayu
07.35 - 07.40 5 Peer-review 1 Li Di et al.
07.40 - 07.55 15 Presentation 2 Li Di et al.
07.55 - 08.00 5 Peer-review 2 Atika Irawan et al.
08.00 - 08.15 15 Presentation 3 Atika Irawan et al.
08.15 - 08.20 5 Peer-review 3 Nur Azifah & Siti Rahayu
08.20 - 08.40 20 Q&A Chair 1: Ikram Nur Muharram
08.40 - 08.50 10 Short break & transition MC
Second Session Chair 2: Fahmi Yunus (University of Sheffield)
08.50 - 09.05 15 Presentation 4 Zulfikar Hasan
09.05 - 09.10 5 Peer-review 4 Agung Maulana
09.10 - 09.25 15 Presentation 5 Agung Maulana
09.25 - 09.30 5 Peer-review 5 Danis Nurul Yunita & Fatchul Wachid
09.30 - 09.45 15 Presentation 6 Danis Nurul Yunita & Fatchul Wachid
09.45 - 09.50 5 Peer-review 6 Zulfikar Hasan
09.50 - 10.10 20 Q&A Moderator 2: Fahmi Yunus
10.10 - 10.20 10 Short break & transition MC
Third Session Chair 3: Syilva Parlina (University of Dundee)
10.20 - 10.35 15 Presentation 7 Nur Dhani Hendranastiti
10.35 - 10.40 5 Peer-review 7 Aisyah As-Salafiyah & Aam Slamet R.
10.40 - 10.55 15 Presentation 8 Aisyah As-Salafiyah & Aam Slamet R.
10.55 - 11.00 5 Peer-review 8 Nur Dhani Hendranastiti
11.00 - 11.15 15 Presentation 9 Indnazulfa Qurrota A’yun
11.15 - 11.20 5 Peer-review 9 Novilia Aisah et al.
11.20 - 11.35 15 Presentation 10 Novilia Aisah et al.
11.35 - 11.40 5 Peer-review 10 Indnazulfa Qurrota A’yun
11.40 - 12.00 20 Q&A Chair 3: Syilva Parlina
12.00 - 12.30 30 Long break MC

7
 Conference Agenda

Start Duration
- End Event Description
* (minutes)
Expert Panel Session Chair 4: Wachid A. Muslimin (Lancaster University)
12.30 - 13.00 30 Keynote speech Erick Thohir, BA., MBA.
          (Chairman MES Indonesia / Minister of
State-Owned Enterprises Indonesia)
13.00 - 13.10 10 Q&A Chair 4: Wachid A. Muslimin
13.10 - 13.40 30 Expert 1 Professor Mehmet Asutay
(Director of Durham Centre for Islamic
          Economics and Finance, UK)
13.40 - 14.10 30 Expert 2 Dr Bridget Kustin
(Saïd Business School, University of
          Oxford)
14.10 - 14.40 30 Expert 3 Professor Marwan Izzeldin
(Associate Dean for International and
Director of GOLCER, Lancaster
          University Management School)
14.40 - 15.10 30 Q&A Chair 4: Wachid A. Muslimin
15.10 - 15.25 15 Awards announcement MC
15.25 - 15.30 5 Closing remarks Director DCIEF / Chairman MES UK

* in British Summer Time (BST) or GMT+1

8
Presenters’ Profile
Presenters’ Profile
No Name
1 Nur Azifah1
Siti Rahayu1
2 Mohammed Sharaf Shaiban1
Li Di1
Akram Shavkatovich Hasanov1
Muhammad Shahbaz2
3 Atika Irawan1
Indra Yudha Mambea1
Subiakto Soekarno1
4 Zulfikar Hasan
5 Agung Maulana
6 Fathul Wachid1
Danis Nurul Yunita2
7 Nur Dhani Hendranastiti
8 Aam Slamet Rusydiana1
Aisyah As-Salafiyah1
9 Indanazulfa Qurrota A’yun
10 Novilia Aisah1
Arnis Budi Susanto2
Hersa Farida Qoriani1
Institution
1
Gunadarma University,
Indonesia
1
Monash University Malaysia
2
Beijing Institute of
Technology, Beijing, China
1
School of Business and
Management, Institut
Teknologi Bandung,
Indonesia
Department of Islamic
Banking and Center for
Research and Community
Service
Thammasat Institute of Area
Studies, Thammasat
University, Thailand
1
Islamic Economic and
Finance, Sakarya University
2
Islamic Finance and
Management, Durham
University, UK
Faculty of Economics and
Business, Universitas
Indonesia
1
Sharia Economic Applied
Research & Training
(SMART), Indonesia
Universitas Ahmad Dahlan,
Indonesia
1
Institut Agama Islam Negeri
(IAIN) Jember
2
Universitas Jember
9
Paper Title
Analysis of Indonesian Islamic
Banks Financial Performance
During the Covid-19
Does oil price matter to the
stock performance of banks in
dual Banking system
Determinants of Islamic Banking
Growth in Indonesia: A Panel
Evidence in Indonesian
Provinces
The Role of Digital Technology
in Raising Zakat Funds at
BAZNAS Republic of Indonesia
During the COVID19 Pandemic
The Effect of Fundraiser’s
Status on Donors’ Participation
and Campaign Performance in
Social Crowdfunding and Its
Practical Implications for
Islamic Philanthropic Agenda:
The Mediating Role of News
Media Coverage and Online
Social Networks
The Effect of Government
Scholarships on Material and
Spiritual Welfare of Scholarship
Alumni: An Example of
Indonesian LPDP Scholarship
Finance, Environment, and
Society: the Covid-19 Case
Islamic Moral Economy: A
Scientometric
Factors Affecting the Capital
Structure of Islamic
Microfinance Institutions:
Insights from Rural Banks in
Indonesia
Follow Through on Promise of
Microfinance in Poverty
Alleviation: Development
Dynamics of Microfinance
Institutions (Baitul Maal Wat
Tamwil) in Indonesia.
Papers’
Papers’ Abstract
Abstract
Analysis of Indonesian Islamic Banks
Financial Performance During the Covid-
19 Pandemic
Nur Azifah and Siti Rahayu
The purpose of this research is to
determine the effect of the COVID-19
Pandemic on Indonesian Islamic Banks’
financial performance and determine
factors that significantly affect the
financial performance of the Indonesian
Islamic Banks during the COVID-19
Pandemic. Data of 10 Indonesian Islamic
Banks that entirely reported their annual
financial statements during the 2015-
2020 period was obtained from each
Islamic Banks database. This research
tested using panel data regression
analysis to see the relationship between
dependent and independent variables.
The outcome found that simultaneously
both dependent variables ROA and ROE,
significantly influenced all the
independent variables. However, partially
tested show that the COVID-19 Pandemic
negatively affected the Return of Assets
(ROA) but did not influence the return of
equity in Indonesian Islamic Banks
Performance. The research is expected to
benefit Indonesian Islamic banks’
stakeholders to understand all the factors
that influence Islamic Banking financial
performance and minimize the impacts of
any future global pandemic crisis. 
10
Does oil price matter to the stock
performance of banks in dual Banking
system
Mohammed Sharaf Shaiban, Li Di,
Akram Shavkatovich Hasanov, and
Muhammad Shahbaz
The main focus of this study is to
examine the heterogeneous relationship
between oil price shocks and stock
performance of banks in dual banking
system, due to the differential business
model of Islamic banking, compared to
their conventional counterpart. Using a
fixed effect panel model, we find a
robust oil-bank return nexus in the oil
net exporting countries and an amplified
reaction of bank returns to the oil price
variations. Specifically, our findings
document higher bank return sensitivity
when the oil price drops driven by the
supply side. We also find that the stock
performance of Islamic banks is more
sensitive to oil variations than their
conventional counterparts. Overall, our
results suggest the potential need for the
initiative similar to the Vision 2030 in
Saudi to reduce dependence on oil-
related industries in the net oil-exporting
counties located in the Middle East and
North Africa (MENA) region.

Papers’ Abstract
Determinants of Islamic Banking Growth
in Indonesia: A Panel Evidence in
Indonesian Provinces
Atika Irawan, Indra Yudha Mambea, and
Subiakto Soekarno
Known for having a Muslim majority
population, Islamic banks in Indonesia still
have low asset growth. This research
includes macroeconomics variables and
specific characteristics of the region as
well as asset growth measurement in
Islamic banks to investigates the stimulus
of Islamic banking growth in term of
assets in Indonesia from 2011 to 2018.
Provinces that implement Sharia law
alongside national law are considered
dummy variables. It estimates in panel-
data regression using the Generalized
Method of Moment (GMM). The result
shows that GDP per capita in the region,
the number of the Muslim population,
and financing by Islamic banks are
significant to boost the asset growth of
Islamic banks. By that, Islamic banks can
focus on the relevant variables and the
government can support from inline
regulation.
11
The Role of Digital Technology in
Raising Zakat Funds at BAZNAS Republic
of Indonesia During the COVID19
Pandemic
Zulfikar Hasan
This research looks at the impact of
COVID19 on all economic and financial
sectors, including zakat institutions.
Apart from harming the world economy,
the COVID19 outbreak has made
policymakers make various innovations
that make it easier for the community.
No exception for zakat institutions such
as BAZNAS of the Republic of Indonesia,
through this zakat institution
cooperation has been built with other
companies such as Islamic banking and
other digital platforms to facilitate
muzaki in collecting zakat funds. The
collection of zakat funds at BAZNAS of
the Republic of Indonesia has increased
despite the COVID19 pandemic.
Research made by researchers uses a
qualitative methodology by analyzing
primary and secondary data that has
been obtained. The results of this study
can be concluded that the role of digital
technology during the pandemic to
collect zakat funds greatly facilitates
muzaki, besides that it has received full
support from the MUI and the
government. Hopefully, there will
continue to research like this that can
raise more themes about the role of
zakat during the COVID19 pandemic.

Papers’ Abstract
The Effect of Fundraiser’s Status on
Donors’ Participation and Campaign
Performance in Social Crowdfunding
and Its Practical Implications for
Islamic Philanthropic Agenda: The
Mediating Role of News Media
Coverage And Online Social Networks
Agung Maulana
This research proposes a multiple
mediating regression model to
examine the effect of the fundraiser’s
status between celebrity VS non-
celebrity. We observed the mediating
role of news media coverage and the
role of online social networks (OSNs)
size as driven factors of information
diffusion amid the relationship
between fundraiser’s status and
donors’ participation and
crowdfunding performance. This study
collected and examined 220 social
campaigns from the largest donation
based platform in Indonesia
(www.kitabisa.com) as samples. To
solve the hypotheses, we run 2 stages
of analysis in Process Macro for SPSS
(model 4b and 80) to set path analysis
process based on the bias-corrected
bootstrapping method. The result
shows that either direct or indirect
effect, news media coverage, or size of
online social networks help
fundraiser’s status to attract potential
donors to participate in the campaign.
Fundraisers who have celebrity and
NGO status benefited more from these
two information diffusion channels.
Besides, donors’ participation with the
news media coverage and the size of
online social networks simultaneously
have been proven to enhance the
12
donation performance of a campaign.
Theoretical and practical contributions
to the Islamic philanthropic agenda are
further explained in the discussion. 
The Effect of Government Scholarships
on Material and Spiritual Welfare of
Scholarship Alumni: An Example of
Indonesian LPDP Scholarship
Fatchul Wachid and Danis Nurul Yunita
Since the purpose of this study is to fill
in the gap of microfinance literature
and human development regarding the
effects of LPDP scholarship funds on the
material and spiritual welfare of
scholarship awardees. Participants in
this research are 78 alumni LPDP
Scholarship that studies abroad. In this
research paper, material and spiritual
value indicators are adopted from the
CIBEST method, namely shalat, fasting,
zakat, government support, and
household environment. Moreover,
data will be processed by OLS and
CIBEST calculation followed by
categorizing respondents into four
quadrantes: welfare index, material
poverty index, spiritual poverty index,
and absolute poverty index. The results
of this study show that family condition,
study experience, and scholarship
amount affect material welfare. Then
the level of persistence, study
experience, scholarship amount, and
alumni network also influence LPDP
alumni spiritual welfare. After receiving
LPDP scholarship, 97% of alumni are in
quadrant I, i.e., materially and
spiritually rich.

Papers’ Abstract
Finance, Environment, and Society: the
Covid-19 Case
Nur Dhani Hendranastiti
The interlinkages between economics,
finance, poverty, and environment
shows that it is important to put the
stakeholders in the same level without
any domination from one party to
another. Considering the current
economic system, that is also reflected
on the financial product, it has put
human and natural resources as object
that can be expropriated rather than
treated to be in the same level of
importance. The current pandemic has
hit the poor part of society the hardest,
considering most of them do not have
fixed income, relying on the day-to-day
activities from other parts of society.
This study argues that developing just
and equal economic system could avoid
further expropriation of environment,
leading towards less pandemic, and
equal society. This study aims to
examine the interlinkages between
finance, poverty, and environment by
observing the effect of economic and
financial crisis on environment and
poverty. It will employ secondary data
from economic and financial sector,
environmental issues, and poverty
measurement. It is expected to suggest
that financial system and product
aspired by Islamic economics, namely
profit-loss sharing, can be an alternative
for the current system in preserving
environment and society and for finance
to return to its origin.
13
Islamic Moral Economy:
A Scientometric
Aam Slamet Rusydiana and Aisyah As-
Salafiyah
This bibliometric study investigates the
current state of various studies on the
Islamic moral economy published by
journals equipped with a digital-object-
identifier. The analysis is focused on
descriptions of the characteristics and
trends of keywords, authors and
journals. The data analyzed were 182
research publications in Dimensi
(https://dimension.ai). The search used
to determine the research dataset was
last updated on January 9, 2021.
Descriptive statistical methods were
used, and bibliometric analysis was
performed using the R Biblioshiny to
determine the bibliometric map. The
number of articles discussing the theme
of the Islamic moral economy is quite
large in recent years. Many journals
publish this theme, among which the
most are JES (Islamic Economics Journal)
which contains several authors who
research this theme with various
keywords. The most productive writer is
Asutay M. The most popular keywords
used are ‘Islamic, economy, moral’. This
study provides an overview of trends in
topics, keywords, journals and writers in
the most popular articles on the theme
of Islamic moral economy, thus providing
information for researchers who focus
on research in this field. This theme has
the potential to continue to be
developed.

Papers’ Abstract
Follow Through on Promise of
Microfinance in Poverty Alleviation:
Development Dynamics of Microfinance
Institutions (Baitul Maal Wat Tamwil) in
Indonesia
Novilia Aisah, Arnis Budi Susanto, and
Hersa Farida Qoriani.
Until now, poverty remains a fundamental
problem faced by many countries in the
world, including Indonesia. Microfinance is
then predicted to be a solution program
that can overcome this. The success of
Grameen Bank in Bangladesh has
succeeded in inspiring the world to
seriously empower marginalized groups –
who have been labelled unbankable and
lead them in a better direction. This study
aims to examine the dynamics of the
development of microfinance institutions
during the last three decades –especially
Islamic-based microfinance institutions
and to highlight the existence of Baitul
Maal wat Tamwil (BMT) as a unique icon
of Islamic microfinance institutions (IMFIs).
This research is included in a qualitative
study using a literature study-based
approach to respond to emerging
empirical phenomena. The findings
indicate that BMT has proven to be
effective and significant in transmitting
poverty alleviation—as in the cases of BMT
Tamzis Wonosobo and BMT Beringharjo
Yogyakarta. In fact, the harmonization of
regulations in the BMT body is an
important thing that must be immediately
followed up so that its benefits can be
increasingly felt in the community. The
academic implication of this study is the
enrichment of microfinance, especially
those based on Islam. The practical
implications reveal the importance of
regulations governing the external side of
14
BMT and the consistency of the
commitment of its management so that
internal institutions can optimize both the
functions of Baitul Maal and Baitut
Tamwil.
Factors Affecting the Capital Structure of
Islamic Microfinance Institutions: Insights
from Rural Banks in Indonesia
Indanazulfa Qurrota A’yun
Optimal capital structure is a balance
between the use of their own capital with
long-term loans; intention is how much of
their own with the use of long-term loan
that will be used so that it can be optimal.
Capital structure or funding decisions will
greatly affect the performance of the
company. The purpose of this study is to
examine the determinants of capital
structure of Islamic Sharia Rural Bank in
Indonesia, using panel financial data of
157 rural banks drawn from 2010 to 2019
on a quarterly basis. A panel regression
technique was applied, using fixed effects
to estimate the relationship between
capital structure and bank-specific
variables such as growth, profitability,
bank size and asset structure. The results
indicate that asset structure is statistically
significant in determining the capital
structure of Islamic rural banks in
Indonesia, confirming the pecking order
theory, trade theory, costs bankruptcy
theory as well as agency theory. However,
growth is not significant in affecting the
bank capital structure. Correspondingly,
the results show that profitability and
bank size have a negative and significant
effect on bank capital structure. Results of
this study provide support to bank
managers to understand the effect of
bank-specific variables on capital
structure.
15
16