Attributes of islamic labels in increasing internal comprehensive strength

Diana Hasyim (Universitas Negeri Medan, Indonesia)
Kustoro Budiarta (Universitas Negeri Medan, Indonesia)
Nurul Wardani (Universitas Negeri Medan, Indonesia)
Edison Parulian (Universits IBBI Indonesia, Indonesia)

Jurnal Mantik
Vol. 7 No. 2 (2023): Agustus: Manajemen, Teknologi Informatika dan Komunikasi (Mantik)

The objectivity of this study includes 3 (three) investigations, namely (1) the implications of Islamic label attributes on financial flexibility, (2) the impact of a combination of Islamic labels and capital structure conservatism on financial flexibility, and (3) the interaction of Islamic labels and cash holding on financial flexibility. By observing 225 companies during the period 2012 – 2021 and using the Generalized Method of Moment (GMM) analysis technique, the results of the study found that the attribute of the Islamic label contributed to financial flexibility. Examination of the impact of the combination of Islamic Label (IL) and capital structure conservatism on financial flexibility shows that IL capital structure conservatism does not contribute to an increase in financial flexibility. However, cash holding IL has the potential to become a source of financial flexibility.