Corporate Sukuk Rating Prediction in Indonesia: An Empirical Model Based on Financial Ratios and Firm Characteristics
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Abstract
This study aims to analyze the influence of liquidity, company size, productivity, leverage, profitability, and board attributes on corporate sukuk ratings in Indonesia. Sukuk ratings issued by PT Pemeringkat Efek Indonesia are used as a proxy for the issuer's creditworthiness and default risk. This study uses a quantitative approach with secondary data in the form of financial statements and annual reports of sukuk issuing companies registered with the Financial Services Authority during a specific observation period. The analysis was conducted using panel data regression with the Eviews statistical tool. Panel data regression is a regression used on panel data. Several methods are commonly used in estimating panel data regression models, including pooled least squares (common effect), fixed effects, and random effects. The results show that liquidity, company size, productivity, and board attributes have a positive effect on sukuk ratings, while leverage and profitability have no effect on sukuk ratings. Productivity and board attributes, such as the proportion of independent commissioners and board size, also contribute to improving rating quality. These findings have implications for investors and management in making sukuk-based funding decisions.
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