The Effect of Buy and Sell Financing (Murabahah), Profit Share Financing (Mudarabah), Equity Capital Financing (Musyarakah), and Non-Performing Financing Ratio towards Firm Performance: The Role of Profitability as mediating and Firm size as Moderating Variables in Sharia Commercial Banks in Indonesia

Abstract

This study aims to determine whether there is an influence between Murabahah, Mudarabah, Musyarakah and Non-Performing Financing on firm value. In addition, this study also aims to determine whether there is mediation of profitability as a function of the independent variable operating in any situation, and helps to conceptualize and explain the effect of the independent variable on the dependent variable; and whether the size of the company as a moderator can strengthen or weaken the relationship between the independent variable and the dependent variable. This research is conducted on Islamic banking in Indonesia. Quota Sampling in which this sampling technique takes as many samples as the number that has been determined by the researcher so that the appropriate sample for this research is 14 Islamic banks in Indonesia. The analysis of the data uses Path Analysis and Moderated Regression Analysis (MRA) using SPSS application. The results of this study are Murabahah has no significant effect on profitability and Mudarabah, Musyarakah have a positive effect and Non-Performing Financing, NPF has a significant negative effect on profitability. In addition, Murabahah, Firm Size, and Musyarakah have no significant effect on ROS, Mudarabah and Non-Performing Financing; and Profitability have a positive and significant effect on ROS. Other than that, profitability is able to mediate the relationship between Mudarabah, Musyarakah, Non-Performing Financing on ROS. Thus, the researcher suggests that Islamic banking in Indonesia should pay more attention to Mudarabah.