Islamic index, independent commissioner and firm performance

Figures & data

Table 1. Sample Distribution Based on Industry

SIC	Non ISSI		ISSI		Total
	N	%	N	%	N	%
1	300	69.93	129	30.07	429	100
2	319	60.42	209	39.58	528	100
3	196	49.75	198	50.25	394	100
4	260	74.50	89	25.50	349	100
5	140	61.40	88	38.60	228	100
6	115	53.99	98	46.01	213	100
7	169	84.92	30	15.08	199	100
8	23	48.94	24	51.06	47	100
9	4	100.00	0	0.00	4	100
Total	1526	63.82	865	36.18	2391	100

the table shows the distribution of firms that are both included and not included in the ISSI consistently (successively) from 2012 to 2018. The research sample consisted of 2391 firms listed on the Indonesia Stock Exchange from 2012–2018.

Table 2. Descriptive Statistics

	Mean	Median	Minimum	Maximum
ROA	5.114	4.510	−38.410	44.150
ISSI	0.362	0	0	1
DIR	4.762	4.000	1.000	16.000
COM	4.283	4.000	1.000	22.000
AUCOM	3.079	3.000	1.000	7.000
INDCOM	0.375	0.333	0.000	3.000
INDDIR	0.149	0.143	0.000	0.667
BIG4	0.367	0	0.000	1
LEV	0.482	0.472	0.022	2.986
TASSET	7.949e+09	2.489e+09	14,410,000.000	1.775e+11
AGE	31.391	29.000	1.000	117.000

The table depicts the descriptive statistics for all variables in this study. All firms on the Indonesian stock exchange (IDX) listed for the year 2012–2018 are the sample of the study.

Table 3. Pearson correlation matrix

	ROA	ISSI	DIR2	COM2	AUCOM2	INDCOM2	INDDIR2	BIG4	LEV	SIZE	AGE
ROA	1.000
ISSI	0.231***	1.000
	(0.000)
DIR2	0.180***	0.202***	1.000
	(0.000)	(0.000)
COM2	0.145***	0.232***	0.525***	1.000
	(0.000)	(0.000)	(0.000)
AUCOM2	0.079***	0.033	0.172***	0.164***	1.000
	(0.000)	(0.102)	(0.000)	(0.000)
INDCOM2	−0.054***	−0.017	0.051**	−0.018	−0.002	1.000
	(0.008)	(0.399)	(0.013)	(0.374)	(0.905)
INDDIR2	−0.116***	−0.141***	−0.301***	−0.204***	−0.036*	0.161***	1.000
	(0.000)	(0.000)	(0.000)	(0.000)	(0.075)	(0.000)
BIG4	0.173***	0.174***	0.307***	0.320***	0.132***	0.022	−0.085***	1.000
	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.283)	(0.000)
LEV	−0.317***	−0.206***	0.001	−0.036*	0.012	0.013	−0.078***	−0.020	1.000
	(0.000)	(0.000)	(0.962)	(0.082)	(0.548)	(0.515)	(0.000)	(0.324)
SIZE	0.140***	0.144***	0.553***	0.528***	0.235***	0.090***	−0.127***	0.409***	0.022	1.000
	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.275)
AGE	0.050**	0.072***	0.079***	0.110***	0.049**	0.051**	0.058***	0.087***	0.011	0.183***	1.000
	(0.014)	(0.000)	(0.000)	(0.000)	(0.017)	(0.013)	(0.005)	(0.000)	(0.583)	(0.000)

p-values in parentheses * p < 0.1, ** p < 0.05, *** p < 0.01. this table shows the pearson correlation for all variable in the study

Table 4. Independent T-Test

	ISSI	Non ISSI
	N = 865	N = 1526	Coefficient	t-value
ROA	8.465	3.215	5.250***	11.630
COM	1.495	1.298	0.197***	11.647
DIR	1.589	1.422	0.167***	10.068
AUCOM	1.121	1.110	0.010	1.636
BIG4	0.479	0.304	0.175***	8.636
LEV	0.406	0.525	−0.119***	−10.287
SIZE	21.926	21.437	0.489***	7.131
AGE	3.336	3.241	0.095***	3.530

This table shows the result of the t-test for all variables in the study

Table 5. Multiple Linear Regression Analysis

	(1)	(2)
Variable	ROA	ROA
ISSI_INDCOM ISSI	2.427***	−0.783 (−0.25) 2.718**
	(5.30)	(2.14)
DIR	2.662***	2.664***
	(3.95)	(3.95)
COM	−0.656	−0.666
	(−1.03)	(−1.05)
AUCOM	2.970**	2.965**
	(2.12)	(2.12)
INDCOM	−3.518**	−3.313**
	(−2.45)	(−2.00)
INDDIR	−0.756	−0.755
	(−0.46)	(−0.46)
BIG4	1.998***	2.001***
	(4.20)	(4.20)
LEV	−12.174***	−12.179***
	(−15.96)	(−15.96)
SIZE	0.383**	0.385**
	(2.18)	(2.19)
AGE	0.811**	0.810**
	(2.48)	(2.47)
_cons	−3.260	−3.386
	(−0.92)	(−0.94)
Industries dummies Year dummies Adjusted R2	Included Included 0.203	Included Included 0.203
N	2391	2391

Regression models relating to the firm performance. Sharia firm and control variable. All continous variables are winsorized at the 1 per cent and 99 per cent levels. t statistics in parentheses, * p < 0.1, ** p < 0.05, *** p < 0.01.

Table

Variable	Definition	Source
Dependent variable
ROA	Earning before tax divided by total assets	OSIRIS
Independen:
ISSI	Dummy variable, 1 for a firm included in the ISSI index	IDX/OJK
Control:
DIRECTOR	Number of directors	OSIRIS
COMMISSION	Number of commissions	OSIRIS
AUDCOM	Number of audit commissions	OSIRIS
INDCOM	Percentage of number of independent commission	OSIRIS
INDDIR	Percentage of number of independent director	OSIRIS
BIG4	Dummy variable, 1 for a firm appoints a Big 4 auditor, otherwise 0	OSIRIS
LEV	Total liabilities divided by total assets	OSIRIS
SIZE	Natural logaritma total assets	OSIRIS
AGE	Natural logaritma of firm age in year	OSIRIS
ISSI*INDCOM	Dummy variable, 1 if a firm included in the ISSI and has a number of independent commission above the average.

Table

IC	Independent Commission
ICM	Islamic Capital Market
IDX	Indonesia Stock Exchange
ISSI	Sharia-Compliant Stock Indonesia
JII	Jakarta Islamic Index
OJK	Financial Services Authority
BAPENAS	National Development Planning Agency (abbreviated Bappenas) is ministry of the Republic of Indonesia that has the task to oversee government affairs in the field of national developmentent