Search

This research aims to analyze the implementation of green banking and the policies implemented in it. The macro approach is carried out through literature studies by collecting secondary data such as scientific articles, planning documents, government policies, and the mass media as well as data related to this research. Data analysis was carried out qualitatively by implementing green banking in several aspects, namely, in the internal bank, in customer service, and during financing. And in its implementation, it has fulfilled the principles of the green banking concept which includes 4 elements of life, namely nature, well-being, economy, and society. [ABSTRACT FROM AUTHOR]

Purpose: This paper investigated whether a bank's popularity and depositors' fear of Google search volume could affect bank deposits and credit. Design/methodology/approach: The authors used two different quarterly data from Google Trends and banking data from 2012 Q1 to 2020 Q1. Based on available data, Google Trends data start from 2012. The authors exclude data after 2020 Q1 because the Covid-19 pandemic arguably increased the volume of Internet users due to shifting behavior to online activities. They merged and cleaned the data by winsorizing at 5 and 95 percentiles to avoid any outlier problems, reaching 74 banks in the sample. They used panel data estimation of quarterly data following Levy-Yeyati et al. (2010) and Trinugroho et al. (2020). Findings: The results show that a higher search volume of a bank's name leads to higher deposits. A higher search volume of depositor fear reduces deposits and credit. The authors also found that banks with high risk and a high search volume of their name have a significantly lower volume of deposits. Originality/value: To the best of the authors' knowledge, not many papers in banking and finance have used Google Trends data to gauge related issues regarding depositors' behavior. The authors have filled a gap in the literature by investigating whether the popularity of Google search and depositors' fear could impact deposits and credit. This study also attempted to establish whether Google Trends data could be a reliable source of information to predict depositors' behavior by using a Zscore to measure bank risk. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to systematically review the study of the relationship between sharia governance (SG), which is represented by the Sharia Supervisory Board (SSB), and internal sharia compliance, and whether it can affect the performance of Islamic banking. Design/methodology/approach: Literature search consists of two steps: random literature review and systematic literature review. The methodology adopted in this article is a systematic literature review. Findings: The variable of internal sharia compliance, sharia risk and internal sharia audit on one of the indications of SG newly researched variable which will later be used as a new paradigm, to measure the implementation of Islamic sharia principles in sharia banking. Practical implications: The development of a conceptual framework by using measurement of the new SG has practical implications for sharia bank, which can later be applied to also increase sharia banking performance by complying with Islamic sharia principles. This new concept can be used as a reference by the Financial Service Authority (Otoritas Jasa Keuangan) to establish regulations regarding SG framework, especially in Indonesia. Originality/value: Further research can add more of it or replace it with other variables that are more relevant, in such a way that it could be empirically tested on how the independence and remuneration (lit. performance allowance) of SSB and the internal sharia control team can affect the performance of sharia banks. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to examine the joint impact of the COVID-19 pandemic and the government response on the performance of Islamic and conventional banks. Design/methodology/approach: Data were collected from a sample of 94 conventional and 14 Islamic banks in Indonesia from March 2020 to September 2021. The system generalized methods of moments estimation is used to analyze the data. Findings: This study finds robust results regarding the negative impact of the COVID-19 pandemic and the positive effects of government responses to COVID-19 pandemic on bank performance in Indonesian banking. Moreover, in line with the rise in confirmed COVID-19 cases, a higher government policy responses index improves bank performance, both in conventional and Islamic banks. Practical implications: This paper highlights the importance of the government policy responses index to absorb the negative impact of the COVID-19 outbreak on banking performance. Originality/value: This paper provides novel insights into the joint impact of the COVID-19 pandemic and government responses to COVID-19 pandemic on bank performance between conventional and Islamic banks. [ABSTRACT FROM AUTHOR]

This issue continues to showcase the distinctiveness of Islamic economic and financial practices in Indonesia and their potential relevance globally. It covers various aspects, including emerging trends in Islamic economics research, the significance of Islamic economics and finance in the modern economy, institutional performance, financial stability, waqf institutions, and the societal role of Islamic economics and finance. The selection process for the articles followed several rigorous steps. Upon receiving each submission, an initial check was conducted to assess its suitability with the journal's aim and scope. Subsequently, the manuscripts were sent to two appropriate reviewers for a double-blind peer review process. In some cases, manuscripts required multiple rounds of evaluation before final acceptance. The feedback provided by the reviewers played a crucial role in making the final decisions. Upon acceptance, the manuscripts proceeded to the editing stages, where they underwent meticulous proofreading and layout design. Throughout this stage, close and constant communication between our editors and the respective authors was maintained to ensure the clarity and coherence of the final articles. From the numerous submissions received, only 12 outstanding papers were selected for publication. Each of these articles offers valuable contributions to the field of Islamic economics and finance, and they have been carefully chosen for their originality, relevance, and potential impact on the scholarly community. We believe that these selected papers will enrich the understanding and discourse surrounding Islamic economics and finance, both in Indonesia and beyond. [ABSTRACT FROM AUTHOR]

Business innovation is deemed an important factor for sustainable competitive advantages. The mentioned important factors are vis à vis not merely product, but also service. Subsequently, this paper elaborates service innovation within ambidexterity approach that comprises two considerations of exploitation and exploration. The exploitation refers to the continuous improvement of the existing activities in companies. Meanwhile, the exploration refers to the breakthrough of new frontier activities in companies that are needed for the company to gain sustainable competitive advantages. Both exploitation and exploration are supported by the theoretical approach and its empirical implementation within companies' sustainable competitive advantages, through grand theory within industrial engineering discipline. This paper elaborates the service innovation that is deemed as antecedents for both financial and nonfinancial performance in the banking industry in Indonesia. The focus of the banking industry in this paper refers to the area of DKI Jakarta, as the center of technology in its capacity as the capital city of Indonesia. The theoretical approach is subsequently implemented through Industry 4.0 that covers trilogy of physical, digital, and biology. Furthermore, the mentioned implementation is aimed at the benefits of Making Indonesia 4.0 with the Indonesia local wisdom and setting. Precisely, it covers focused sectors: food and beverages; textile; automotive; chemical; and electronic. Ultimately, it refers to an action plan as quick wins in term of technology incentive; investor roadshow; vocational education; and innovation center, along with its support for small medium enterprise. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to explore and analyse the credit risk assessment procedure conducted by the Indonesian Islamic banks to address the issue of asymmetric information among their micro-, small- and medium-sized enterprise (MSME) clients. This study also investigates the gaps in credit risk assessment procedures by comparing Islamic banks' practices and presenting several recommendations to reinforce the credit risk evaluation procedures and eventually promote more inclusion of the MSME segment into the Islamic financial services. Design/methodology/approach: This paper adopts a qualitative method by implementing a multi-case study research strategy. The data were gathered primarily through an interview approach by incorporating purposive uncontrolled quota sampling. Findings: The result of this study implies that the Islamic banks in Indonesia have their own unique approaches and strategies in assessing the credit risk and have several similarities in performing their evaluation procedures for the MSME. Despite seemingly adequate approaches and measures taken by the Islamic banks to eliminate the asymmetric information problem, the study identifies several gaps that occur within the Islamic banks' methods of credit risk assessment. Research limitations/implications: Since this study focuses on Indonesia and emphasises the two segments of Islamic banks, which consist of Islamic commercial and rural banks, in performing the MSME credit risk assessment; therefore, the findings of this study were limited around the observed Islamic banks within the MSME segment purview. Practical implications: By referring to the recommendations as proposed by this paper, four implications could be expected from adopting these respective recommendations, among others: more effective evaluation procedures for the MSME, provision of a clear path and more efficient approach to assess the MSME units, lower financing cost and increase the confidence of Islamic banking industry in disbursing more financing to the MSME sector. This mechanism will potentially improve Islamic financial inclusion for the MSME due to the greater access to financial services; hence, the sector could contribute even more to Indonesia's growing economy. Originality/value: By incorporating a multi-case study among Indonesian Islamic banks pertaining to their methods in evaluating MSME customers, this study identifies several gaps affecting the effectiveness of MSME credit risk assessment. Furthermore, this study also presents a proposed framework to address these gaps accordingly by suggesting the salient strategies to minimise the issues of information asymmetry and enhance the MSME credit risk assessment procedure. [ABSTRACT FROM AUTHOR]

In this paper, we explore how asset returns used as a proxy to detect interconnectedness of systemic risk in the financial system. Our sample employs a mixture of Indonesian banks' public and prudential data over the 2012–2019 period. Using the Principal Component Analysis and Granger causality the core banks in the network could explain the variance, risk co-movement, and show shocks propagation. Further, the results are also in line with Basel indicator-based to score the interconnectedness. The dominance of big size banks in the centrality measures raises issue of substitutability. This paper outstretched theories and their application provides a basis for policy makers to develop supervision frameworks to mitigate systemic risk. [ABSTRACT FROM AUTHOR]

Purpose: This paper investigates the joint impact of COVID-19, alliances and digital strategies on bank lending. Additionally, this study examines whether the effect of COVID-19, alliances and digital strategies on bank loans depends on the types of banks. Design/methodology/approach: Using a sample of 92 commercial banks in Indonesia from March 2020 to September 2021, a fixed-effects model (FEM) was used to analyze data. Findings: This study provides robust results regarding the negative impact of the COVID-19 pandemic on bank loans in Indonesian banking. Furthermore, it reveals that collaboration between banks and FinTech does not substantially influence bank lending, despite the rise in proven cases tending to reduce credit expansion. It emphasizes the importance of the development of mobile banking as part of digitalization in boosting loan bank expansion, and this finding is more noticeable in private and small banks. Practical implications: This study highlights some policy recommendations to improve bank lending during the COVID-19 period, particularly the role of new alliances and digital strategy in involving COVID-19 pandemic mitigation within a novel financial ecosystem. Originality/value: This study offers a significant contribution to the empirical literature that specifically explores the joint impact of the COVID-19 pandemic, alliances and digital strategies on bank lending in banking. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to determine the effect of equity financing on bank stability during normal and crisis periods. Design/methodology/approach: This study uses a static panel regression that includes pooled ordinary least square, random effect and fixed effect model to examine the influence of equity financing on bank stability. In estimating bank stability during a financial crisis, the authors predict the occurrence of a crisis using the early warning system (EWS). The authors then used z-score to measure Islamic banks' stability. Findings: Islamic banks that offer equity financing structure are more stable compared to Islamic banks without such structure. Islamic banks with medium equity financing have highest stability relative to Islamic banks with high or low equity financing. During crises, the Islamic banks with equity financing structure remain relatively stable compared to other Islamic banks. Research limitations/implications: The sampling coverage could have included a larger number of countries and banks. Practical implications: The authorities need to strengthen the banking framework to support the Islamic financial products by encouraging a wider use of risk-sharing instruments. Besides using a debt-like financing structure, Islamic banks should also place emphasis on equity financing in instilling the banking sector stability. In monitoring banks with equity financing, the authorities may need to look into the level of equity financing. Social implications: Besides avoiding riba and gharar in financing, equity financing encourages cooperation and participation among society as they share the risks. Originality/value: This paper analyses the effect of equity financing on the Islamic banks stability during normal and crisis periods. This paper further examines the intensity of the equity financing and its influence on bank stability. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to describe earnings growth and marketability generated by Islamic banks in Indonesia and to find the effects of a moderated mediation model on the nexus between Islamic financial inclusion and literacy, marketability and earnings growth. Design/methodology/approach: The sample of this research was Islamic commercial banks in Indonesia listed on the Financial Services Authority and Bank Indonesia using time-series data of financial statements from 2014 to 2021. This research was designed using the model of moderated mediation. Findings: Earnings growth experienced by Islamic banks in Indonesia has a positive average value followed by a positive marketability. Based on the significance test, the level of earnings growth is positively affected by marketability. The result indicates that the higher the marketability, the higher the earnings growth of Islamic banks. In a moderated mediation model, the result has found a positive effect on the nexus between inclusion supported by the role of literacy, marketability and earnings growth. It indicates that Islamic financial inclusion moderated purely by the role of literacy enhances Islamic banking marketability so that earnings growth continuously increases. Practical implications: The increase of literacy is an empirically proven way to strengthen market power, so the finding obtained in this research can be feedback from the scheme made by the Indonesian government in supporting the Islamic business and for the corporate area being eager to grow greater and faster in competing and equalizing its power in the banking industry. In addition, this research implies that other countries continuously promote and increase the role of Islamic financial literacy and inclusion to enhance market power and increase the growth in Islamic banking. Originality/value: This research extends the limited scholarly work on the role of Islamic financial literacy and inclusion using a different design from prior studies. The framework of market power theory has been elaborated to find the effect of Islamic financial inclusion supported by the role of literacy on earnings growth through marketability. This research is a trailblazer in testing the nexus model between variables allowing the path analysis using the moderated mediation model. [ABSTRACT FROM AUTHOR]

This paper examined the effects of audit committee attributes on the sustainability reporting (SR) of commercial banks in Indonesia. This study conducted a cross-sectional and time-series analysis using a sample of 74 commercial banks from 2015 to 2019. This study investigated the audit committee attributes, including financial expertise, size, independence, and meeting frequency. The model under study was underpinned by the theory of legitimacy, stakeholders, and agency. The results showed that the financial expertise of audit committee had an inverse relationship with SR disclosure. Meanwhile, there was a positive relationship between committee independence, bank size, bank age, and type of auditor with SR disclosure. These findings imply that the banks should further focus on the audit committee's attributes as an effective measure to produce quality SR disclosure. In addition, non-financial expertise, especially in the field of sustainability, is a skill that the audit committee needs to have. [ABSTRACT FROM AUTHOR]

Transfer pricing in the banking industry has a huge impact on maintaining risks and strategic decision-making for preserving competitive advantage in the market. As a best practice, the bank owns an Asset & Liabilities Management (ALM) function assigned to control internal pricing, named Fund Transfer Pricing (FTP), to regulate the inter-division fund pricing between the Funding Division and the Lending Division. While the FTP implementation provisions of a bank are not regulated due to management’s appetite, the FTP calculation methods are definitively established based on several research studies. The most sophisticated method is named MatchMaturity, by reason of matching every banking product’s tenor to the yield curve and calculating them by the repayment behavior. This paper aims to study the significance of the Match-Maturity FTP (MM-FTP) method on a bank in Indonesia which currently apply the Multiple-Pool FTP (MP-FTP) method. To achieve the set objective, the study performed the FTP calculation of identical banking products including samples and all population utilizing MP-FTP and MM-FTP. The result shows 10 out of 11 groups of product and segment experienced over-charged or over-credited employing MP-FTP, which lead to inaccurate evaluation of balance sheet management and performance measurement. [ABSTRACT FROM AUTHOR]

Fintech lending, also known as peer-to-peer (P2P) lending or online loans, refers to lending provided by non-bank financial technology-based companies that provide financial services by connecting lenders and borrowers on a specific online platform. This paper investigates the impact of fintech lending development on the efficiency of Islamic local banks in Indonesia. Local banks are chosen because they differ from national commercial banks in terms of their characteristics and products, and they also serve limited customers in a specific local area (i.e., provincial level). The presence of Islamic local banks in Indonesia is unique because it fills the gap and has a significant contribution to Muslims who do not have (or do not need) access to larger Islamic commercial banks. This is particularly noteworthy given that Indonesia is the most populous Muslim country. Using a sample of 161 Islamic local banks in Indonesia and provincial-level fintech lending data from 2020Q1 to 2020Q4, we find that fintech development in Indonesia erodes Islamic local banks’ efficiency, suggesting that their presence is significant and could also be damaging for local banks. However, our finding reveals that the negative effects of fintech development can be reduced in banks with higher levels of efficiency. Our results call for policymakers to monitor the development of fintech to maintain a lending ecosystem that can ultimately relate to financial service stability. [ABSTRACT FROM AUTHOR]

Natural symmetries exist in several processes of chemistry, physics, and biology. Symmetries possess interesting dynamical characteristics that cannot be seen in non-symmetric systems. The present paper investigates the competition between two banking systems, rural and commercial, in Indonesia, in parameterized fractional order Caputo derivative. A novel numerical method is used to discretize the competition system using the real data of rural and commercial banks in Indonesia for the period 2004–2014. The new scheme is more suitable and reliable for data fitting results and has good accuracy. The integer model is formulated in Caputo derivative and their stability results are presented. With the available parameters, the data for the model is analyzed using various scenarios. We shall compare the result with the previous method used in the literature and show that the present method is better than the previous method in the literature. It is shown that fractional order α and the parameter ρ involved in the numerical scheme provide excellent fitting. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Application Business & Management / Jurnal Aplikasi Bisnis dan Manajemen is the property of IPB University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Sharia digital payments have lately emerged as one of the most significant innovations and breakthroughs in the field of Islamic economics in Indonesia. However, behind the positive side of the use of sharia e-wallets, there is one thing that all parties involved need to pay attention to, which if ignored can become a double-edged sword for its users, namely compliance, security, and personal data protection. The paper aims to investigate how the Indonesian government governs data privacy for Islamic e-wallet users. It also investigates the potential risks and challenges of Islamic digital payments particularly in regard to data protection. Besides, it also investigates whether or not the sharia e-wallet has complied with the Fatwa of DSN-MUI. The study used normative research methods employing statutory, case, and conceptual approaches. This study reveals that the use of sharia e-wallets in Indonesia is essentially in compliance with Islamic principles as stated in the Fatwa of the National Sharia Council. As for the protection of personal data, in fact, this has been regulated in a comprehensive manner by the government and related state institutions such as Bank Indonesia and the Financial Services Authority. However, the government still has work that must be considered in regard to the compliance of sharia digital payment operators with established laws and regulations, where in the event of the operators violated the use of data privacy, thus they will face a severe sanctions stipulated by the prevailed rule. [ABSTRACT FROM AUTHOR]

Adaptation to the internet and advances in mobile technology has become key to the survival of industries, including the banking industry. One of the latest electronic banking channels is mobile banking. While mobile banking offers various advantages, many banks in Indonesia are facing the problem of low adoption. This paper reports on the findings of our research project, which examines mobile banking adoption behavior in Indonesia from an interaction perspective. Specifically, the paper examines the role of usability, compatibility and social influence in explaining people’s intention to continue using mobile banking in Indonesia. Using an interaction perspective framework, a research model is proposed. Ten hypotheses are suggested, examining six constructs: satisfaction, perceived usefulness, perceived ease of use, perceived learnability, compatibility and social influence. From a theoretical perspective, this paper is the first to combine usability, compatibility and social influence in a mobile banking adoption study. Data from 319 valid respondents were used to test the proposed model using partial least squares structural equation modeling. The results show that all the hypotheses are supported, and it was found that people’s intention to continue using mobile banking is significantly affected by satisfaction, compatibility, perceived usefulness, perceived learnability and social influence. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to examine the effects of Tier-1 capital toward risk management and profitability on the performance of Indonesian Commercial Banks. Design/methodology/approach: The research population consisted of all commercial banks listed on the Indonesia Stock Exchange. The data were in the form of financial statements of commercial banks for the periods of 2012 to 2016 with a total of 42 companies (bank). From a total of 42 commercial banks listed in the Indonesia Stock Exchange, not all of them met the criteria. Commercial banks that meet these criteria are as many as 28 banks are sampled research. Findings: Tier-1 capital has a positive direct effect on risk management, Tier-1 capital has a positive indirect effect on profitability with risk management as a mediation variable, risk management has a positive direct effect on profitability, Tier-1 capital has a positive indirect effect on performance with risk management and profitability as mediation variables, risk management has a positive indirect effect on performance with as mediation variable and profitability has a positive impact on performance. Originality/value: The originality of this research can be seen from the causal relationship between the effects of Tier-1 capital, risk management and profitability on the performance of commercial banks in the context of stock performance among Indonesia commercial banks. Also, the analysis tools using multiple fixed effect panel data models in this research as a novelty in this research. In addition, previous research findings remain inconsistent with one another. By conducting this research, it is expected that more consistent research findings than the previous ones can be generated. Sluggish global economic conditions, which result in declined bank performance are an interesting topic to investigate. The paper uses an original sample, 28 Indonesian banks in 2012-2016. Also, it links Tier 1 capital with risk management and performance in a novel theoretical framework. [ABSTRACT FROM AUTHOR]

Indonesia is committed to Undang-Undang Nomor 16 Tahun 2016 concerning the Paris Agreement on Climate Change. To support this commitment, the role of banking, including Bank XYZ, is crucial in financing clean energy projects and other business sectors. Although Bank XYZ has shown growth in green financing since 2016, there are notes regarding financing in the coal sector between October 2018 and October 2020, as well as a decline in the ranking in the 2022 Bank Ranking Report. Therefore, an evaluation of the concept of green banking at Bank XYZ is needed to maintain its growth and ensure the effectiveness of its implementation from 2017 to 2022. This research employs a qualitative approach to analyze the implementation of green banking at Bank XYZ. The evaluation is conducted through interviews with the Risk Management Division and an analysis of sustainability reports using the Green Banking Disclosure Index (GBDI). Bank XYZ has proven to implement the concept of green banking transparently, but there are shortcomings such as a lack of transparency in sustainability budgeting, attention to debtors, internal controls, sustainability campaigns, and the use of renewable technology. This research is expected to enhance the quality of green banking implementation at Bank XYZ, support environmental preservation, and address existing weaknesses. [ABSTRACT FROM AUTHOR]

This research explores the role of corporate governance, audit quality, and fiscal loss compensation in influencing tax avoidance strategies within firms in the Indonesian banking sector. Using financial statements and annual reports of companies listed on the Indonesia Stock Exchange (IDX) from 2017-2021, we employed panel data regression analysis to investigate these relationships. The selection of companies was based on specific criteria, which are detailed within the paper. Our findings revealed that while independent commissioners and audit committees negatively affect tax avoidance, institutional ownership and audit quality had no significant impact. Interestingly, fiscal loss compensation was found to positively influence tax avoidance. Our study indicates that not all corporate governance mechanisms are effective in curbing tax avoidance in the banking sector. Additionally, we highlight the unintended consequences of fiscal loss compensation policies, which may facilitate tax avoidance. These findings have important implications for policy and governance in the banking sector. [ABSTRACT FROM AUTHOR]

The author comments on the paper "Why Don't Asians Invest in Asia?: The Determinants of Cross-Border Portfolio Holdings," by Alicia Garcia-Herrero, Philip Wooldridge and Doo Yong Yang. He agrees with the forecast that Indonesia will recover from the global financial crisis due to its foreign exchange reserves, bank balance sheets and low trade dependence. But he stresses that the effect of the crisis on the economy should not be based solely on initial capital flow. He adds that there are evidences that raise doubts on the stability of Indonesian banks.

Copyright of JDM: Jurnal Dinamika Manajemen is the property of Universitas Negeri Semarang, Fakultas Ekonomi, Jurusan Manajemen and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The purpose of this paper is to find out the influence of internal and external factors on the risk of musharakah financing of Islamic Commercial Banks in Indonesia. Financing risks in previous Islamic banking studies focus more on overall financing risks involving internal and external aspects, both separately and jointly. There have been no studies that examine the internal and external aspects of sharia commercial banks on financing risks, especially in the musharakah contract. This study will complement the literature on the aforementioned issue. This study uses a quantitative method with panel data regression analysis. The data used is quarter financial ratio data from all Sharia Commercial Banks in Indonesia for the period 2012-2017. The results of the study show that bank internal factors predominantly influence the risk of musharakah financing. Whereas on external factors, only GDP growth has a significant effect. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to determine the impact of loan concentration on the returns of Indonesian banks and examines whether bank ownership types affect the relationship between concentration and returns. Design/methodology/approach: This research uses heuristic measures of concentration: The Hirschman–Herfindahl index and Deviation from Aggregated Averages are applied to Indonesian banks across all sectors. The data covers the pre and post global financial crises periods from 2003-2011 for 109 commercial banks in Indonesia. Panel feasible generalised least squares analysis was applied. Findings: The findings show that loan concentration increases bank returns. The positive effect of concentration on returns tends to be more significant for domestic-owned banks. In addition, the interaction effect shows that the positive effect of concentration on returns is less for foreign-owned banks. Research limitations/implications: The Indonesian central bank changes to the reporting format of sectoral loan allocation by banks since 2012 in terms of the Indonesian Banking Statistics Details of Enhancement matrix requires separate data analysis for 2012 onwards. The findings of this paper could be enhanced by more detailed data like interest rate expenses and bank level sectoral non-performing loans data. Practical implications: The findings suggest that a focus strategy provides better returns. Moreover, bank ownership types is an important factor to consider when setting a bank lending policy. Originality/value: This paper is among the few studies where different measures of loan concentration in combination with measures of return are applied in Indonesia as an emerging Asian country. The research also provides evidence of the impact of concentration on the interest earnings of the loan portfolios of banks in addition to return on assets and return on equity that are generally applied as measures of return in previous research. [ABSTRACT FROM AUTHOR]

Participatory financing schemes, including Musharakah and Mudarabah, are theoretically claimed to be the ideal modes of Islamic financing, but their practice is restrained by several factors. That is why Islamic banks have a consistent tendency to avoid participatory financing on the assets side throughout the world. However, recently this trend has started changing in Pakistan and Indonesia where the share of participatory finance has raised significantly in the financing portfolio of Islamic banks. The present paper explores this recent spur of participatory finance in Pakistan in terms of its domains of applications and the responsible factors. The findings lead to a novel posteriori framework which shows that the shift toward participatory financing is primarily characterized by increase in working capital financing and commodity operations financing through Musharakah mode Islamic banks. Moreover, five factors contribute to the spur of participatory financing including: (i) introducing varieties in Musharakah, (ii) enhanced applicability, (iii) high volume projects, (iv) government interventions, and (v) regulator's role. The framework can significantly advance understanding with respect to the implementation theory of participation financing within Islamic banking and related Shariah compliance and regulation. [ABSTRACT FROM AUTHOR]

Sukuk is one of the most attractive Islamic instruments currently in Indonesian Islamic capital market. This instrument brings about the inevitable combinations of contracts in one single transaction to serve variety of demands of the Islamic investors. The fact shows that majority of contracts in Sukuk market (corporate and sovereign) are using double and multiple of contracts in their 'aqad structure. However, based on hadith of the Prophet, it is prohibited to combine more than one contract in single transaction. Therefore, some Muslim scholars have questioned the level of compliance with Shari'ah law in Sukuk issuance. This paper provides proper understanding over the prohibited combination of contracts in Shari'ah. It can be concluded that not all combinations of contracts are prohibited as long as they follow the Shari'ah parameters guidelines. The paper laid down Shari'ah parameters to combine more than one contract in one single transaction, so as it is beneficial for Sukuk issuer (corporate and government) for future development before issuing the Sukuk. [ABSTRACT FROM AUTHOR]

This paper examined the impact of related deposit transactions on banks' risk-taking and financial stability by considering the ratio of related deposits over total deposits to capture banks' dependency on deposits from their related parties. Our sample consisted of 90 Indonesian banks and covered the period 2009–2019. Our finding showed that related bank deposits significantly increased the z-score. Our deeper investigation showed that the effect of related deposits when we split the sample based on size. We find that related deposits increase the z-score only for small banks. Our results provide insights and noteworthy policy implications for regulators to take into account related party transactions in deposits to have greater control over the behavior of bank's risk-taking and to maintain the soundness of the banks, and mitigate financial instability. [ABSTRACT FROM AUTHOR]

Purpose The purpose of this paper is to measure the pattern of contract agreement process to map various banks’ position in perceiving Sharia conduct. This is done by incorporating the dynamics of culture, market demand and Sharia literacy in different banks. Finding of this research will serve as the formula to map the latent degree of Islamic bank’s commitment to their strategic vision and identity as an Islamic-based financial institution.Design/methodology/approach This research develops its theoretical background in classical and contemporary literature review on murabahah contract in Islamic perspective. Focus group discussion (FGD) and in-depth interview are conducted on 32 bankers (in 14 Islamic banks), two National Sharia Council, five academicians and three central bank representatives as an input for qualitative analysis. Content analysis is utilized in this paper to emphasize the process of discovering the relationship between dynamic factors affecting contract agreement process in murabahah scheme in Indonesian banking.Findings There are four dimensions affecting the contract agreement: fairness to customer, country regulation, perceived business practicality and product characteristic. The four dimensions are assumed to be influenced with categories proposed, as the category item is mostly repeated and is perceived to be significant in the participant’s perspective.Originality/value This research will be beneficial in mapping the determinant of degree of Sharia compliance in Sharia banking in Indonesia, focusing on the contract agreement process. [ABSTRACT FROM AUTHOR]

The objective of this paper is to examine the factors of intellectual capital, financial leverage, institutional ownership, and working capital management (WCM) on firm value and the role of profitability as a mediator in influencing firm value. The research analysis unit focuses on the conventional banking sector on the Indonesia Stock Exchange. The panel data was taken from 28 commercial banks for five years (2016-- 2020), with 140 observations and data is analyzed using path analysis. Based upon the result of hypothesis testing, the study concludes that the positive correlation between profitability and firm value. Furthermore, intellectual capital, financial leverage, institutional ownership, and WCM also positively affect firm value and profitability. Based on data analysis using path analysis by comparing the path coefficient substructure, the results show that profitability acts as a mediator the effect of intellectual capital, financial leverage, institutional ownership, and WCM on firm value. [ABSTRACT FROM AUTHOR]

Purpose -- The purpose of this paper is to analyze individual financing instruments and portfolios of instruments, and find the location of the most efficient portfolio financing. The Indonesian Islamic banking industry is very promising with four dominant financing instruments, namely, Mudarabah, Musharakah, Murabahah and Istishna. Each instrument has unique pattern of return, expected return and risk. Moreover, the variances of two, three and four financing instruments suggest the importance of identifying the most prospective financing instruments. Further, the most efficient portion of the most prospective financing is determined by constructing an efficient portfolio financing frontier. Design/methodology/approach -- Technically, it uses risk and return theory to compute risk, return and variance of an instrument and set of financing instruments. In addition, it uses an efficient portfolio frontier curve to locate all combination of the most progressive portfolio financing and finds the most efficient portfolio financing. Findings -- It finds some interesting finding with regard to the pattern of return, characteristics of a financing instrument and groups of financing instruments. The most essential finding of the paper is the location of the most efficient portfolio financing. Research limitations/implications -- The information and finding of this paper benefit the Indonesian Islamic banking industry to optimize the performance of an individual and groups of financing instruments. Particularly, for the most progressive financing instruments, it proposes the combinations of portfolio financing which give optimum output. Originality/value -- To the best of author's knowledge, this is the first paper trying to analyze and construct an efficient portfolio financing frontier of the Indonesian Islamic banking industry. [ABSTRACT FROM AUTHOR]

This paper provides empirical evidence of the comparison default risk in Islamic banks and conventional banks in Indonesia over the 2011 to 2017 period. The calculation of bank default risk using a Merton Model has allowed the measure of the Distanceto-Default (DD) and Default probability (DP). This study was extended to investigate the differences of bank default risk between Islamic banks and conventional banks with the employ of T-test. The evidence shows Islamic banks as banks that are far from the Possibility of Default Risk rather than conventional banks. The T-test indicates that there are significant differences in the Probability of Default values between Islamic banks and conventional banks. These findings could be relevance to regulators in Indonesia to support the growth of Islamic, which helps in maintaining financial system stability and avoiding systemic risk. [ABSTRACT FROM AUTHOR]

Copyright of International Research Journal of Business Studies is the property of Prasetiya Mulya Publishing, Universitas Prasetiya Mulya and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Purpose The purpose of this paper is to examine the competitive conditions and market power of Islamic banks in Indonesia for the period of 2006-2013.Design/methodology/approach Using samples of 27 Islamic banks, the study uses a variety of structural and non-structural measures related to the traditional approach and the new empirical approach of the industrial organization. The methodology is based on a set of measures of the competition and market power. The first measures, concentration ratios and Herfindahl–Hirschman index, are to determine the competitiveness level, while the second measures of Panzar–Rosse H-statistic and Lerner index are to examine the market power of Islamic banks in Indonesia.Findings The finding of this study has confirmed the situation of Islamic banking industry in Indonesia which is operated in a higher degree of market power which leads to a less competitive market. Islamic banks earn their revenues under monopolistic competition over the tested period. This study has also found a negative but insignificant relationship between concentration and competition which shows that in the past few years, the market power for leading firms in Indonesia Islamic banking industry has reduced.Practical implications The paper is a very useful source of information that may provide relevant guidelines in guiding the future development of competition of Islamic Banking industry. In addition, the paper provides relevant guidelines for improving competitiveness of Islamic banks.Originality/value This study combines two approaches for bank competition measurement and bank market powers measurement which can provide more robust findings. To the best of the authors’ knowledge, the study on Islamic banking competitiveness level and market power is very limited, especially in the case of Indonesia. Therefore, this study could contribute significantly toward the literature of the related field. [ABSTRACT FROM AUTHOR]

This paper explores the condition of the coconut agroindustry in Konawe Island, Southeast Sulawesi Province, Indonesia that has abundant natural resources of coconut plants and potential to increase the coconut agro-industrial development system (ADS) sector based on coconut utilization into cooking oil ingredients. The experimental method was applied using community focus group discussion (CFGD) approach to determine the elements of CADS actors and the Interpretive Structural Modelling (ISM) method to analyze and determine the actors as the main key elements in the CADS. The study found that coconut farmers and consumers are the main keys in the CADS in Konawe Island. The role of actor elements that influence CADS such as the banking sector, coconut farmers at the second level, department of industry and trade, local government, and collection traders at the third level. Classification of CADS actors has been obtained the linkage quadrant classification are coconut farmers, local government, plantation agency, coconut processing industry, and the department of industry and commerce, while the elements of consumers and universities are in independent quadrant. This study provides knowledge to CADS for improving the coconut agroindustry, especially those in the coconut fruit processing industry. As founders in this industry lack a business management background or experience in order to help them better prepare themselves and avoid failure early in their business. The findings of this study provide information for small coconut processing entrepreneurs on the influence on CADS growth of the relevant actor elements and structures. [ABSTRACT FROM AUTHOR]

To be competitive in their business, many of Indonesian Commercial Banks create strategic initiatives that are managed in form of projects and expect that the impact of this projects will bring quantified value to the organization in form of firm performance. Nevertheless, it is important to know organizations capability and project prioritization in delivering those projects so that the quantified value can be optimized. This paper aims to explore how the project portfolio management supports the project delivery capabilities through PMO to respond the environmental uncertainties and how it affects the bank performance that is measured using Return on Asset (ROA). Data were obtained from 74 respondents representing each of 74 commercial banks and analysed using the partial least squares structural equation modelling software SmartPLS 3.0. Study was concluded that project delivery capabilities had a significant impact on ROA in banks with larger equity category. This empirical research reveals that the environmental uncertainties are responded by the banks with bigger equity category (3 and 4) through implementing the right strategic initiatives in form of project that is managed with sufficient project delivery capabilities through PMO and significantly affecting the ROA. This phenomenon, however, is not reflected in Commercial Banks with smaller equity category (1 and 2). The result of this study shall provide insights to Indonesian Bank Regulatory to provide governance in managing strategic initiatives in the form of projects to the Indonesian Commercial Banks. [ABSTRACT FROM AUTHOR]

Objective - Islamic Banks have a distinct advantage that is not only conduct a commercial operation, but to also conduct social operations. Therefore, Islamic Banks plays an important role in developing the Indonesian economy. The aim of this study is to investigate the impact of internal and external factors that affect the profitability of Islamic Banks in Indonesia. Methodology/Technique - The methodology of this research is multiple regression. The object of this research is the Islamic banking industry in Indonesia. Internal factors include size, liquidity, asset quality, management, and efficiency ratio. External factors include interest rate and inflation. Return on Assets is used to measure profitability. The monthly data is collected from the financial reports of Islamic Banks between 2011 to 2016. Findings - The findings show that size, liquidity, assets quality, management ratio, interest rate and inflation lead to a greater Return on Assets (profitability) in Islamic Banks in Indonesia. Efficiency however does not have a significant effect on profitability of Islamic Banks in Indonesia. Novelty - Based on the results of this research, it can be concluded that the Islamic banking industry can use those variables to improve the profitability of Islamic banks in the future. In addition, there are two variables that affect the profitability of Islamic banking industry. For the Islamic banking industry should anticipate the movement of inflation and interest to improve the profitability of Islamic banks. Type of Paper: Empirical paper. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is testing customer's knowledge on customer intimacy and its impact on repurchase intention, specifically to Bank Muamalat's customers in Jakarta, Indonesia. Design/methodology/approach: This research was conducted at sharia bank with research subject that is a customer of Bank Muamalat reasons to choose Bank Muamalat as a representative of other sharia banks as a place of research because it is the first sharia bank in Indonesia and more experienced in implementing sharia practices. The branch offices approved as research sites are only seven branch offices (Panglima Polim, Slipi, Tanah Abang, Kemayoran, Mangga Dua, Buaran and Kalimalang) in five areas of DKI Jakarta (Central Jakarta, West Jakarta, South Jakarta, East Jakarta and North Jakarta). Respondents at the seven branch offices are considered to represent customers of Bank Muamalat in the area of Jakarta. Data were collected from August to December 2017. Findings: High customer knowledge is able to encourage customer intimacy, and high customer intimacy is also able to encourage repurchase intention. On the other hand, it was found that customer knowledge was not directly able to increase the intention of repeat purchase. However, from the mediation test (indirect effect) is seen with high customer knowledge, supported by the high customer intimacy, it can indirectly increase the high repurchasing intention. Originality/value: Originality is seen from testing the mediation effect of customer intimacy on the influence of customer knowledge on purchase intentions. Furthermore, inconsistencies put the customer's familiarity with familiarity, and familiarity with the intention of repeat purchase, are re-examined in the context of sharia banks. It is assumed the test results will be different if done in different countries and institutions. [ABSTRACT FROM AUTHOR]

Introduces articles published in the April 2004 issue of the periodical "Bulletin of Indonesian Economic Studies." Way in which banking crisis was handled; Criticisms that have been levelled at the large-scale last resort undertaken by Bank Indonesia; Radical proposal as to how the government could recoup a substantial proportion of the losses incurred.

This research investigates the connection between dividend policy, third-party funds, financial performance, and company value, with a focus on IT Innovation as a moderating factor. This research was conducted using a quantitative approach, utilizing Commercial Banks listed on the Indonesia Stock Exchange categorized as BUKU 4 Banks during the period of 2016–2022. This study employed Partial Least Squares (PLS) analysis with WarpPLS 6.0 software as the tool for data analysis. This research concludes that dividend policy does not significantly impact financial performance and company value, while third-party funds have a significant positive effect on both financial performance and company value. Although dividend policy does not directly affect company value, its impact may occur through the mediation of financial performance. Additionally, IT Innovation serves as a moderating factor that strengthens the positive relationship between third-party funds and financial performance towards company value. The novelty of this research lies in the development of a more comprehensive model or concept regarding dividend policy, third-party funds, financial performance as a mediating variable, and company value when considering IT Innovation as a moderating variable. [ABSTRACT FROM AUTHOR]

Objective - The purpose of this study is to examine the influence of capital on bankruptcy banks. The hypothesis of this research is that capital has an effect on the bankruptcy of a bank. Methodology/Technique - This research examines financial reports between 2005-2014. An econometric model with a logistical regression analysis technique is used. In this study, capital is measured by CAR, taking into account credit risk; CAR by taking into account market risk; Ratio of Obligation to Provide Minimum Capital for Credit Risk and Operational Risk; Ratio of Minimum Capital Adequacy Ratio for Credit Risk, Operational Risk and Market Risk; Capital Adequacy Requirements (CAR). Findings - The results show that the capital adequacy ratio for market ratio and capital adequacy ratio for credit ratio and operational ratio support the research hypothesis and can form a logit model. The test results of CAR by taking into account credit risk, Minimum Capital Requirement Ratio for Credit Risk, Operational Risk and Market Risk and Minimum Capital Provision Obligations do not support the research hypothesis. Novelty - This paper contribute to bank bankruptcy prediction models based on time dimension and bank groups using financial ratios which are expected can influence bank in bankrupt condition. [ABSTRACT FROM AUTHOR]

Using data from ninety commercial banks in the Indonesian banking sector, this paper investigates the impact of the acquisition of domestic private banks by foreign banks on lending behaviour, particularly SME credit. Among foreign banks, we differentiate between acquired banks and greenfield foreign banks, and examine whether the acquired banks changed their lending behaviour following their acquisition. Our empirical results of effects on the credit supply of acquired banks are not clear except SME credit; between 2000 and 2009, the acquired banks did reduce credit to SMEs after acquisition. [ABSTRACT FROM AUTHOR]

This Paper aims to examine the impact of the implementation of Loan to Deposit Ratio (LDR) Regulation on income smoothing practice of commercial banks in Indonesia. The LDR Regulation is industryspecific regulation. There are conflicting arguments regarding the ability of industry-specific regulation in reducing income smoothing of banks. The samples used in this research are 28 listed commercial banks in Indonesia for the periods 2008 - 2011. Overall, there are 112 bank-annual observations. The test focuses specifically on panel time series cross-sectional models. A T-test of Fixed effects model of panel data and paired sample t-test are used to test the hypothesis. The result indicates that commercial bank managers smooth their income through the allowance for impairment loss. However, the implementation of the LDR regulation can not reduce the level of income smoothing of publicly commercial banks in Indonesia. The level of income smoothing after the LDR regulation is lower than the level of income smoothing before the implementation of the LDR regulation, but the differences are not significant. [ABSTRACT FROM AUTHOR]

Purpose The purpose of this paper is to examine the behavior of banking risk in the emerging economies, particularly Indonesia and contribute to the discussion on the existing policy debate regarding the impact of capital on bank risk.Design/methodology/approach This study investigates the relationship between bank risk and capital using data on 15 Indonesian large banks between 2008 and 2015, using z-score and Delta-CoVaR to measure both idiosyncratic and systemic risks.Findings The empirical investigation suggests that capital has a negative and significant relationship with these risk measures. The authors also find that higher systemic risk encourages banks to increase their capital. However, similar evidence is not found in the idiosyncratic risk models. Finally, the role of capital in reducing risk is considered robust only during the normal periods, as banks may increase their assets risk during times of financial distress.Originality/value Systemic risk (CoVaR) is used to represent bank risk. This study focuses on the Indonesian banking sector (capture institutional arrangements and regulatory environment). It covers the period of 2008 GFC and post-crisis period. [ABSTRACT FROM AUTHOR]