This study aims to examine how Sharia compliance influences the relationship between political connected Board of Directors and stock price synchronicity.
The sample was selected using purposive sampling technique and the hypothesis was tested using multiple regression analysis. The sample consisted of 1,083 observations from companies listed on the Indonesia Stock Exchange in 2021–2022. Additional tests, such as endogeneity testing using the Generalized Method of Moments and Two-Stage Least Square, were also conducted.
The findings indicate that Sharia compliance strengthens the negative influence of political connections in the board of directors on stock price synchronicity. This study can serve as a reference and consideration for investment decisions, suggesting that political connections and Sharia compliance are important factors for investing in Indonesian companies.
This study examines how Sharia compliance influences the association between political connections and stock price synchronicity in Indonesia where Sharia-based economy is largely developed.
