Do board characteristics influence Islamic banks’ capital structure decisions? Empirical evidence from a developing country

Figures & data

Table 1. Sample distribution for the year period.

Years	ICBs that were operating	ICBs that published annual reports	ICBs as sample
2007	6	2	2
2008	7	3	3
2009	9	5	5
2010	12	11	11
2011	12	11	11
2012	12	11	11
2013	13	13	13
2014	13	13	13
2015	13	13	13
2016	14	14	14
2017	14	14	14
2018	14	14	14
2019	14	14	14
2020	14	14	14
2021	12	12	11
Total	179	164	163

Source: OJK (2023).

Table 2. Variables, acronyms and measurements.

Variables	Acronyms	Measurements
Debt to asset ratio	DTAR	The ratio of total liabilities to total asset
Debt to equity ratio	DTER	The ratio of total liabilities to total equity
Board size	B_SIZE	Total number of board members
Board independence	B_IND	The ratio of the number of independent members to the total members of the board
Board gender diversity	B_GEN	The ratio of the number of female members to the total members of the board
Sharia board size	SB_SIZE	Total number of Sharia Board (SB) members
Sharia board expertise	SB_EXP	The ratio of the number of SB members with economic, finance and accounting expertise to the total members of the SB
Profitability	PROF	The ratio of profit after taxes to total asset
Bank growth	GROWTH	Total asset(t) – total asset(t−1)/total asset(t−1)
GDP growth	GDP	Annual growth of real GDP
Inflation	INFLA	Annual inflation rate

Table 3. Descriptive statistics.

Variables	Mean	Std. dev	Minimum	Maximum	Skewness	Kurtosis
DTAR	0.1687	0.0741	0.0116	0.3826	0.1483	2.6343
DTER	2.0679	1.6720	0.0531	8.3839	1.1171	4.3366
B_SIZE	4.1227	1.1588	2	8	1.4309	5.7029
B_IND	0.5349	0.1634	0.3333	0.8000	0.0356	1.5261
B_GEN	0.1767	0.1921	0.0000	0.6667	0.8706	3.1199
SB_SIZE	2.3252	0.4955	1	4	0.7436	2.3661
SB_EXP	0.3451	0.2352	0.0000	0.7500	−0.4926	1.8085
PROF	1.6513	2.8828	−12.1300	12.1600	−0.6029	9.7203
GROWTH	0.0514	0.1667	−0.0394	1.1240	5.4629	13.2005
GDP	4.6198	2.1522	−2.0700	6.3500	−2.5142	8.1842
INFLA	4.3300	2.3920	1.6800	11.0600	1.0297	2.8389

Source: ICBs’ annual report, world bank and Indonesian Central Bureau of Statistics during 2007–2021.

Table 4. Matrix correlation of independent variables.

Variables	B_SIZE	B_IND	B_GEN	SSB_SIZE	SSB_EXP	PROF	GROW	GDP	INFLA
B_SIZE	1
B_IND	0.0490	1
B_GEN	−0.0084	−0.3352	1
SSB_SIZE	−0.0325	0.1386	−0.1419	1
SSB_EXP	−0.0735	0.3286	−0.2182	0.2169	1
PROF	0.1159	−0.2730	−0.0657	−0.1043	−0.0023	1
GROW	−0.2143	0.1902	−0.1840	0.1178	0.1748	0.0124	1
GDP	0.0213	0.0113	0.0102	−0.0278	−0.0479	−0.0709	−0.0446	1
INFLA	0.0027	−0.0031	0.0399	0.0298	0.0414	−0.0548	0.0475	0.4433	1

Source: ICBs’ annual report dan Indonesian Central Bureau of Statistics in the period 2007–2021.

Table 5. The results of the variance inflation factor (VIF) model.

Variable	VIF	1/VIF
SB_SIZE	9.52	0.105037
GDP	6.36	0.157110
B_IND	6.27	0.159404
INFLA	5.39	0.185499
SB_EXP	3.53	0.282941
B_GEN	2.17	0.460011
PROF	1.55	0.644261
GROWTH	1.25	0.802752
B_SIZE	1.10	0.913000
Mean VIF	4.13

Source: Self-calculation results.

Table 6. The results of the model fit test.

Dependent variable	Probability values			Suitable model
	Chow test	Hausman test	LM test
Debt to asset ratio (DTAR)	0.0000	0.9508	0.0000	REM
Debt to equity ratio (DTER)	0.0000	0.0032	0.0000	FEM

Source: Self-calculation results.

Table 7. The results of the heteroscedasticity test.

Observed model	chi2(1)	Prob > chi2	Results interpretation
Model 1: dependent variable DTAR	1.67	0.1962	There is no heteroscedasticity
Model 2: dependent variable DTER	892.77	0.0000	There is heteroscedasticity

Source: Authors’ calculation results.

Table 8. The summary of GMM model fitness test results.

Lagged dependent variable	Sargan test		Arellano-Bond test		Coefficient
	Chi2	Prob > chi2	z	Prob > z	FEM	GMM	PLS
DTARit−1	122.928	0.068	−0.767	0.4428	0.399***	0.425***	0.479***

Source: Processed ICBs Indonesia’s annual report for the 2007–2021 period. Notes: ***statistically significant at the 1% level.

Table 9. Summary of REM, SYS-GMM and FGLS estimation results.

Variable/ model	REM			SYS-GMM to check robustness			FGLS
Dependent variable	Debt to asset ratio (DTAR)			Debt to asset ratio (DTARit)			Debt to equty ratio (DTER)
Independent variable	Coefficient	Std. error	z	Coefficient	Std. Error	z	Coefficient	Std. Error	z
DTARit−1	–	–	–	0.4252***	0.0747	5.70	–	–	–
B_SIZE	0.0101***	0.0031	3.24	0.0106***	0.0027	3.91	−0.0676	0.0721	−0.94
B_IND	0.2073***	0.0346	5.98	0.1262***	0.0350	3.61	−0.0998	0.8459	−0.12
B_GEN	−0.0110	0.0243	−0.41	0.0001	0.0249	0.00	−2.9629***	0.6051	−4.90
SB_SIZE	0.0399	0.0436	0.92	0.0059	0.0391	0.15	2.7401***	1.0347	2.65
SB_EXP	0.1232***	0.0222	5.56	0.1123***	0.0209	5.37	1.2328**	0.5971	2.06
PROF	−0.0239	0.0016	−1.52	−0.0052***	0.0015	−3.46	0.0287	0.0401	0.72
GROWTH	0.0607***	0.0229	2.66	0.0965***	0.0234	4.13	0.3503	0.5342	0.66
GDP	0.0231	0.0018	1.31	0.0031**	0.0015	2.06	−0.0450	0.0408	−1.10
INFLA	0.0109	0.0016	0.69	−0.0023	0.0015	−1.53	0.0675**	0.0368	1.93
Constant	0.1594***	0.0228	6.99	0.0917***	0.0234	3.92	0.7315	0.6261	1.17
Adj R-squared	60.93%			–			–
Wald chi2	133.08			137.04			307.89
Probability	0.0000			0.0000			0.0000
Banks	14			14			14
Observations	163			163			163

Note: ***statistically significant at 1%; **statistically significant at 5%.

OJK, Statistik Perbankan Syariah, Otoritas Jasa Keuangan, 2023, https://ojk.go.id/id/kanal/perbankan/data-dan-statistik/statistik-perbankan-indonesia/default.aspx

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