Connections between politicians and business houses are not uncommon. Literature shows that firms tends to connect with politicians/political parties to get easy access to credit, to have lax regulatory oversight, to have preferential treatment for the government contracts and for having access to insider information. On the other hand a Shari'ah compliant firm is considered to perform ethically and justly due to adherence to the rules and regulations prescribed by Shari'ah. In recent years the research on political connections of Malaysian listed firms is increased. But the comparison of politically connected listed firms and Shari'ah compliant listed firms in Malaysia is lacking. Malaysia is a leading country in Islamic finance hence; this paper analyzes the impact of political connections and Shari'ah compliance on the profitability of the listed firms' in Malaysia for the period of 2000-2014. The paper used regression technique for the analysis. The result of the study shows that Shari'ah compliant firms perform better than the politically connected firms. Shari'ah compliance has positive and significant impact on the profitability of the firm whereas political connections have negative and significant impact on the profitability of the firm in the case of Malaysia.

Shari'ah provides the basic tenets of the Islamic finance industry and advocates banks to share their profits and losses with investors. But what it means for a firm to be "Shari'ah-compliant" and what form of connections it can have, even in theory, to either the firm's value or profitability is still an untapped question. This study tries to answer this question. This study aims to find the impact of Shari'ah compliance on firm performance. The results obtained would be useful in helping investors, regulators, companies, government, academicians and practitioners in their decision-making process as to ensure better economic and business gains, both locally and globally. Panel data on 634 Shari'ah-compliant firms have been used in this study for the period of 2000-2014. The results indicate that Shari'ah compliance adds to the value of firms as firms perform transactions according to Shari'ah while avoiding non-permissible activities. This study adds value to the existing literature by showing the statistical results for the impact of Shari'ah compliance on the performance of the listed firms on Bursa Malaysia.

Businesses and politics are two important blocks for the economic growth of any country. This dissertation focuses on the determinants of the performance of the listed firms in the case of Malaysia with the analysis and impact of political connections and Shari'ah compliance on the performance of the listed firms for the year 2000-2014. The research also focuses on the performance of firms having political affiliations and who also attain the status of Shari'ah compliance as per the rule book of the Securities and Exchange Commission of Malaysia. The results of our study shows, certain firm-specific ...