Proceedings of the 3rd Asia Pacific International Conference of Management and Business Science (AICMBS 2019)

The Moderating Role of Shariah-Compliant in the Relationship Between Free Cash Flow and Profitability in Family Firm

Authors
Aang Kunaifi, Muhammad Saiful Hakim
Corresponding Author
Aang Kunaifi
Available Online 13 April 2020.
DOI
https://doi.org/10.2991/aebmr.k.200410.002How to use a DOI?
Keywords
free cash flow, shariah-compliant, profitability, agency problem, family firm
Abstract

These research aims to explain agency problem effect on free cash flow in the family firm setting. The free cash flow in the family firm will depend on the agency problem existing to mitigate and decreasing agency cost. Shariah-compliant could use to mitigates the agency problem of free cash flow in the family firm by restricting the free cash flow. This research applied a panel regression to a data set composed 55 families controlled-public company during period 2013-2017. We documented that free cash flow has positive influence on profitability, but low free cash flow by the shariah-compliant firms outperform by highly free cash flow firm. This profitability difference is primarily driven by shariah-compliant is an essential factor in mitigating agency problem for free cash flow by promoting free cash flow limitation.

Copyright
© 2020, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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Volume Title
Proceedings of the 3rd Asia Pacific International Conference of Management and Business Science (AICMBS 2019)
Series
Advances in Economics, Business and Management Research
Publication Date
13 April 2020
ISBN
978-94-6252-954-0
ISSN
2352-5428
DOI
https://doi.org/10.2991/aebmr.k.200410.002How to use a DOI?
Copyright
© 2020, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

TY  - CONF
AU  - Aang Kunaifi
AU  - Muhammad Saiful Hakim
PY  - 2020
DA  - 2020/04/13
TI  - The Moderating Role of Shariah-Compliant in the Relationship Between Free Cash Flow and Profitability in Family Firm
BT  - Proceedings of the 3rd Asia Pacific International Conference of Management and Business Science (AICMBS 2019)
PB  - Atlantis Press
SP  - 9
EP  - 12
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200410.002
DO  - https://doi.org/10.2991/aebmr.k.200410.002
ID  - Kunaifi2020
ER  -