The Moderating Effect Of Sharia Governance On The Profit Levels Of Sharia Commercial Banks In Indonesia (2020–2024)
Keywords:
Profit Smoothing, Sharia Governance, Leverage, Profitability, Sharia Banks, Risk ManagementAbstract
This study examines the moderating role of Islamic Corporate Governance (ICG) in the relationship between leverage, profitability, and income smoothing practices across 13 Indonesian Islamic Commercial Banks from 2020-2024. Using logistic regression with interaction effects on 65 observations, results show that leverage and profitability have no significant direct effects. However, ICG significantly moderates the profitability-income smoothing relationship (p=0.089; coefficient=-18.634), indicating that strengthening Islamic governance is effective as a risk mitigation instrument against opportunistic income smoothing.
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