Yayan Hendayana

Type of the article: Research Article

Abstract
This study aims to examine the strategic role of sukuk and bonds as primary sources of financing and the differences in their characteristics in influencing corporate adjustment behavior. The subjects were 187 companies included in the Indonesian Islamic Stock Index (ISSI) for the 2010–2023 period. The methodology used is a partial adjustment model with a dynamic panel approach, which formulates speed of adjustment (SOA) as a function of debt instruments, accompanied by subsample analysis and robustness tests using alternative leverage definitions and bootstrapping. Sukuk-issuing companies have the highest average leverage, both in terms of book (0.530) and market (0.567). The average SOA of Islamic companies is moderate (book SOA = 0.267; market SOA = 0.364). Bonds consistently accelerate adjustment towards optimal capital structure in both book and market leverage. In contrast, sukuk issuers exhibited a high book-based SOA (0.948), but this was not statistically supported due to sample limitations. This finding extends the literature by confirming that SOA is not simply a fixed value, but rather a function of the financing instrument used. Theoretically, this study develops trade-off theory and pecking order theory by incorporating the dimension of sharia instruments. Practically, the results suggest that bonds are currently more effective as a compliance mechanism. Meanwhile, sukuk require strengthening of market infrastructure. From a policy perspective, this study emphasizes the urgency of developing a sukuk market to achieve credibility equivalent to bonds at the global level.

Acknowledgment
This research was funded by the Directorate General of Higher Education, Research and Technology, Ministry of Education, Culture, Research and Technology of the Republic of Indonesia through the 2025 Fundamental Research Scheme. The author also expresses his appreciation and gratitude to As-Syafi’iyah Islamic University for the administrative support and facilitation provided so that this research can be carried out properly.