المستخلص: |
Institutions employ a combination of owned and borrowed funds to finance diverse aspects of their operations, and the composition of financing sources varies according to several factors and theories interpreting financial structure. Traditional literature indicates that the nature of the activity conducted by the institution is one of the factors that can influence its reliance on borrowing to finance its activities. Sharia-compliant institutions, differing from traditional ones, adhere to distinctive characteristics guiding their financial decisions, notably avoiding interest-based loans and opting for alternative financing mechanisms. This study examines how the sectoral context influences the financing choices of Sharia-compliant institutions, using a sample of Malaysian entities listed on the stock exchange during 2010-2022. Results reveal varying debt reliance across sectors, with Utilities, Healthcare, and Telecommunications displaying relatively higher levels. Despite sectoral disparities, overall stability in borrowing levels was observed throughout the study period, suggesting these institutions maintain borrowing dependence amidst activity changes.
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