Islamic Finance and Corporate Financial Performance in Malaysia

Dr. Hafsa Batool, Dr. Nurul Amin, Professor Ahmad Zulkarnain


This study explores the relationship between Islamic finance principles and the corporate financial performance of firms in Malaysia. Drawing upon a comprehensive literature review and empirical analysis, it investigates how Shariah governance, capital adequacy, bank size, and environmental, social, and governance (ESG) practices impact the financial performance of Shariah-compliant companies. Financial reports from Shariah-compliant companies listed on the Bursa Malaysia were extensively utilized. These reports provided crucial data on various financial metrics, including but not limited to profitability indicators such as Return on Assets (ROA) and Return on Equity (ROE), capital adequacy ratios, and information pertinent to ESG practices. The findings suggest that adherence to Islamic finance principles can positively influence corporate financial performance, providing insights into the importance of Islamic finance in promoting sustainable and ethical business practices.

Keywords; Islamic Finance, Corporate, Financial Performance

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