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Purpose: The primary objective of this study aims to intensively explore the environment of Indonesian regulations and laws related to the Islamic banking system and micro-, small- and medium-sized enterprises (MSME) and unveil the restrictive laws and regulatory flaws that potentially hinder the Islamic banking institution and MSME industry in achieving financial inclusion and promoting sustainable growth. Design/methodology/approach: This paper implements a qualitative method by implementing a multi-case study research strategy, both from the Islamic banking institutions and the MSME industries. The data were gathered primarily through an interview approach by adopting purposive uncontrolled quota sampling. Findings: The findings of this paper reveal two essential issues: First, the regulatory imbalances and restrictions could demotivate and hinder the efforts of Islamic banks in providing access to finance for the MSME segment, hence, encumbering the achievement of the financial inclusion agenda from the Islamic banking industry. Second, the flaws in MSME registration and taxation might discourage the formal MSMEs from extending their business license and prevent the informal MSME units from registering their business. This issue would potentially lower their chance of accessing external financing from the formal financial institutions and participating in supportive government programmes due to the absence of proper legality. Research limitations/implications: Since this paper only observed six Islamic banks and 22 MSME units in urban and rural locations in Indonesia using a case study approach, the empirical findings and case discussions were limited to those respective Islamic banks and MSME participants. Practical implications: By referring to the recommendations as presented in this paper, two critical policy implications could be expected from adopting the proposed recommendations, among others: By addressing the issues of the regulatory imbalance associated with the Islamic banking industry and introduce the deregulatory policies on profit and loss sharing (PLS) scheme implementation, this approach will motivate the Islamic banking industry in serving the MSME sector better and provide greater access to financial services, particularly in using the PLS financing schemes. By resolving the problems on MSME registration and taxation, this strategy will enhance the sustainability of the formal MSMEs' operation and encourage the informal ones to register, hence, improving their inclusion into the formal financing services and government assistance programmes. Originality/value: The present study attempts to address the literature shortcomings and helps to fill the gaps – both theoretical and empirical – by incorporating the multi-case study among Indonesian Islamic banks and MSMEs to extensively explore the Indonesia regulatory environment pertaining to the Islamic banking system (supply-side) and MSMEs (demand-side), and thoroughly investigates and reveals the restrictive laws and regulatory flaws that could potentially hinder the Islamic banking institutions and MSME industries in attaining financial inclusion and contributing to sustainable development. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Islamic Economics / İslam Ekonomisi Dergisi is the property of Journal of Islamic Economics / Islam Ekonomski Dergisi 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.)

This quantitative study investigates the impact of Islamic work ethics on employee response and job satisfaction within the Indonesian Islamic banking sector. It contributes to the academic literature by examining the nuanced relationships among these variables, shedding light on organizational dynamics specific to Islamic banking contexts. This study investigates survey responses from 120 Islamic banking employees by employing partial-least-square structural-equation modeling (PLS-SEM). Our findings indicate a significant positive influence of Islamic work ethics on both employee response and job satisfaction. We uncover the mediating role of job satisfaction in the relationship between Islamic work ethics and employee response, providing valuable insights for human resource management practices in Islamic banking environments. [ABSTRACT FROM AUTHOR]

One of the financial institutions currently developing in Indonesia is sharia banking, but previous research states that the majority of people still use conventional banking products. This is because conventional banks have various products, are more diverse, and have advantages over sharia banks. Therefore, this research aims to identify how religiosity and perceptions can influence people's decisions to use sharia banking services. The type of research conducted is quantitative research. Quantitative research is the type of research conducted. The population consists of 1350 traders located in Manonda Market and Masomba Market in Palu City. Simple Random Sampling is the sampling technique used. In this research, there are 180 respondents whose data will be used to test the hypotheses. The research takes place in the traditional markets of Masomba and Manonda in Palu City, and the data collection was conducted in the year 2023. The data that will be used to test the hypothesis in this research is 180 respondents from questionnaires distributed directly to respondents. The research results show that religiosity can influence people's perceptions regarding Islamic banks; apart from that, perceptions are also found to influence consumer decisions when using sharia banking products. Furthermore, perception can be a good mediator between religiosity and consumer decisions, but in this research, it was found that religiosity cannot influence people's decisions to use sharia banking. The implications of this research are important for academics by opening opportunities for further research regarding the complexity of the relationship between religiosity, perceptions and customer decisions in Islamic banking. For Islamic banking practitioners, these results emphasize the importance of understanding the role of perception in increasing the acceptance and use of Islamic services. [ABSTRACT FROM AUTHOR]

This study aims to examine the financial performance of Islamic banks in Indonesia and Malaysia, with a specific focus on optimizing shareholder value. The assessment includes efficiency, market share, interest rates, inflation and economic growth as crucial criteria in comprehending the success of Islamic banks in each country. The secondary data is derived from the annual reports of 25 Islamic banks in Indonesia and Malaysia, with a focus on characteristics pertaining to operational efficiency and market share. Furthermore, data is obtained from Bank Indonesia (BI) to gather statistics regarding inflation, interest rates, and GDP growth from the years 2018 to 2021. The study used panel data regression with a random effects model as the most accurate estimator. The results of the panel data regression analysis suggest that inflation has a favorable effect on return on equity (ROE), while GDP growth has a beneficial impact on return on assets (ROA). This research highlights the importance of enhancing inflation risk management and making strategic adaptations to the business plans of Islamic banks in Malaysia and Indonesia. This research enhances the scholarly comprehension of the variables affecting the efficiency of Islamic banks in diverse economic conditions. [ABSTRACT FROM AUTHOR]

Introduction to The Problem: Risk management is critical for Islamic banks, which must navigate financial and operational risks while adhering to Sharia principles. Understanding how risk governance structures influence risk management's effectiveness in enhancing financial and social performance is essential. Purpose/Objective Study: This study explores the moderation effect of risk governance structures on the relationship between risk management, specifically insolvency risk, financing risk, and operational risk, and Islamic banks' financial and social performance in Indonesia. Design/Methodology/Approach: The research utilized a dynamic panel data regression method to analyze data extracted from the annual reports of 11 Islamic commercial banks spanning from 2012 to 2021. Findings: The study finds that specific risk governance structures, including the size of the audit committee, its independence, the expertise of its members, and the frequency of its meetings, as well as the quality of external audits, significantly enhance the impact of risk management on both the financial and social performance of Islamic banks. Additionally, specific structures unique to Islamic banks, such as the Sharia Supervisory Board size and the frequency of their meetings, also strengthen this effect. [ABSTRACT FROM AUTHOR]

This research illuminates the ethical standards governing marketing professionals within the Islamic banking sector, focusing on discouraging unethical practices for personal gain. We objectively depict the prevailing ethical landscape using field research and descriptive methodologies. Our investigation reveals that the largest Islamic Bank in Indonesia, Bank Syariah Indonesia (BSI), has instituted a comprehensive ethical framework for its marketing personnel. This framework transcends mere guidelines, embodying an ethos deeply ingrained in their professional conduct. Marketing strategies, underpinned by Islamic ethics, are guided by the tenets of faith: Siddiq (honesty), Amanah (responsibility), Fathanah (wisdom), and Tabligh (communicative). This study offers a unique insight into the ethical marketing practices within the Islamic banking industry, contributing to the discourse on ethical standards in financial services marketing. [ABSTRACT FROM AUTHOR]

This study aims to provide an overview and analysis of the influence of policy and corporate governance, including Sharia supervisory board, firm size, firm age, and leverage on green banking disclosure in Islamic commercial banks in Indonesia from 2017 to 2021. This study uses a quantitative approach with panel data regression analysis to examine the causal relationship between the independent variables (policy, board size, board of commissioners, Sharia Supervisory Board, firm size, firm age, and leverage) and green banking disclosures. Islamic commercial banks registered with FSA and IDX are the study population. The sampling method in this study was purposive sampling, with a total sample of six Islamic commercial banks for five years of research. The results of this study show that the company's age, the size of the company, the size of the board of directors, and the board of commissioners have a significant effect on the disclosure of green banking. Meanwhile, Sharia board and leverage do not significantly affect green banking disclosure. This study implies that applying green banking to overcome environmental problems can only be realized by regulation alone, considering the importance of other factors from the bank's side. [ABSTRACT FROM AUTHOR]

Copyright of AL-MUZARA'AH - Journal of Islamic Economics & Finance 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.)

This study aims to determine Indonesia's Islamic Bank Adoption drivers, especially in some customer groups. PLS-SEM is an analytical method used to test hypotheses. The analysis results show that the mediation type is partial mediation, but the mediation type for East Java customers and Generation Z is complete mediation. Based on the results, Islamic Banks must maintain their excellence to attract more customers. The sense of security in using Islamic Bank products and services is the primary indicator for East Java, generation Z, and non-generation Z customers. The reliability of Islamic Bank products and services is the primary indicator for non-East Java customers. Islamic Banks must also be able to build customer intentions to use Islamic Bank products and services, especially for Generation Z East Java customers. This study finds that intention needs to be built to increase the Adoption of Islamic banking products and services. [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 banking has experienced significant development and growth since the entry of the Islamic economic system into Indonesia, but this development is still far from conventional banking. The researcher aims to see whether factors from TPB and TAM such as perceived usefulness, perceived ease of use, attitude, subjective norms, perceived behavioral control, Islamic Financial Literacy and Religiosity have an influence on millennial decision making to become customers of Islamic banks in Jabodetabek in particular. The data analysis method in this study uses SEM-PLS or Partial Least Square. The research sample used in this study was 148 customers of Islamic banks in Indonesia. Data is collected via google form. The data obtained, analyzed using confirmatory analysis (CFA). The hypothesis developed for this study was tested by testing the composite reliability. This study found that 77.2% of millennial intentions in Jabodetabek were influenced by attitude, subjective norms, perceived behavioral control, religiosity, Perceived Ease to Use and Perceived Usefulness and Islamic financial literacy. The remaining 22.8% is influenced by other variables not examined in this study [ABSTRACT FROM AUTHOR]

The government of Indonesia consolidated three state-owned Islamic banks to become Bank Syariah Indonesia. Customer loyalty is affected by merger operations. This study aims to examine the role of Bank Image, Cost and Benefit of Merger, Past Behavior, Services Quality, Product Price, Bank Human Recourses, Bank Location, Information Technology Integration and Sharia Compliance on Loyalty Customers BSI's predecessor banks (Bank Syariah Mandiri, BNI Syariah and BRI Syariah). This study uses a quantitative approach by completing an online questionnaire from 92 respondents spread across Indonesia and this study uses Confirmatory Factor Analysis (CFA) as the estimation method. The results of the validity test show a strong correlation between a few independent variables and BSI customer loyalty. These include bank human resources, bank location, and information technology integration, Product quality and service quality. On the other hand, the validity test shows that a number of independent variables are unrelated to BSI customer loyalty, including Bank Image, Cost and Benefit of Merger, Past Behavior, Product Price, and Sharia Compliance. For BSI managers, prioritizing key drivers of customer loyalty such as product quality, service efficiency, and technological integration is crucial for strategic resource allocation and maintaining a positive customer experience. BSI customers are encouraged to stay informed about the bank's offerings, engage in educational initiatives, and provide regular feedback, while the government can support BSI's success by fostering a regulatory environment conducive to innovation and customer-centric initiatives. [ABSTRACT FROM AUTHOR]

Copyright of Jurnal Ekonomi Syariah Teori dan Terapan is the property of Universitas Airlangga 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.)

We examine the role of religiosity on the financing activities in both Islamic and conventional banks in Indonesian provinces by using five different measures of religiosity: number of Islamic schools, hajj application, number of Islamic seminary schools, number of Mosques, and number of certified halal products. Based on regression analysis, the results show that both Islamic and conventional banks provide more financing in religious provinces. Religiosity also helps in reducing the volume of non‐performing financing. Our the results are still qualitatively valid after taking into account endogeneity issue that emanates from omitted variables (i.e., unobservable beliefs, ideas, and attitudes), and possible reverse causality between religiosity and the total amount of financing at the province level. [ABSTRACT FROM AUTHOR]

This study aims to find out; (1) the effect of Supervisory Variables on Sharia Bank Risks, (2) the influence of Corporate Governance Variables on Islamic Bank Risks, (3) the influence of Macroeconomic variables on Islamic Bank Risks, (4) supervision of moderating Corporate Governance on Islamic Bank Risks, and (5) supervision of moderating Macroeconomics on Sharia Bank Risks. This research uses quantitative research methods with a descriptive approach. The data used is secondary data obtained from the IDX, Bank Indonesia, and Islamic bank websites selected as research samples. The results showed that the variables of supervision, corporate governance, and macroeconomics have a significant effect on the risks of Islamic banks. In addition, the results of the study also show that supervision moderates the relationship between corporate governance and Islamic bank risks, as well as between macroeconomics and Islamic bank risks. In the context of Islamic bank risks, supervision is very important to minimize risks that can threaten the business continuity of Islamic banks. Corporate governance and macroeconomic conditions also affect the risks of Islamic banks. Therefore, Islamic bank management must pay attention to these factors in making strategic decisions to reduce the risks of Islamic banks and ensure sustainable business continuity. [ABSTRACT FROM AUTHOR]

Purpose - This research aims to formulate and design strategies for optimizing Islamic Bank financing in order to develop Micro, Small and Medium Enterprises (MSMEs) in Indonesia. Design/Methodology/approach - SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) consists of 1) Internal Factor Evaluation and External Factor Evaluation, 2) SWOT Matrix (S-O Strategies, S-T Strategies, W-O Strategies, and W-T Strategies), and 3) Weighted Score Table (Main strategies). Findings - From the SWOT analysis, it is possible to formulate and design the strategies for optimizing Islamic Bank financing in order to develop Micro, Small and Medium Enterprises (MSMEs) in Indonesia. The strategies include: increasing the distribution of financing for MSMEs; conducting assessment towards MSMEs management aspect, production capacity and marketing, and the impact of MSMEs on the economy; conducting guidance or fostering towards MSMEs business management, MSMEs operational activities, marketing of MSMEs business products, and MSMEs financial management; and conducting supervision towards MSMEs financing use, MSMEs business development, MSMEs financial reports, and MSMEs financing returns. Research limitation/implications - This paper provides an understanding of MSMEs development in Indonesia through Islamic bank financing. Practical implications - From the preparation of strategies using SWOT analysis, it can be a guide for Islamic Banks in national economy development through the distribution of financing to MSMEs. Originality/Value - This paper integrates SWOT analysis into the banking world, especially Islamic Banks in designing strategies for developing MSMEs in Indonesia. [ABSTRACT FROM AUTHOR]

This study examines macroeconomic factors affecting MSME financing in Indonesian Islamic banks from 2014 to 2021. These factors include inflation, BI rate and exchange rate. The methodology of this study is a quantitative method using the OLS approach. The data used in this study is monthly data from 2014 to 2021. Data was collected from Central Bank and OJK publications. This study found that macroeconomic conditions also affect how MSME financing is channeled in Islamic banks, so inflation and exchange rate partially, but BI Rate does not affect the distribution of MSME financing. This is because Islamic banks do not use an attractive interest rate system but a profit-sharing system. The findings of this study have significant consequences for decision makers, Islamic banks, and market participants. Islamic banks should work more to provide financing for MSMEs. Islamic banks should use innovation and creativity to develop and market new products in MSME financing. Due to its narrow focus on MSME financing in Islamic banks, this research has several limitations including that this research only focuses on macroeconomic factors, many other factors can affect MSME financing such as internal bank factors. Further research can examine the impact of Islamic banking financing on MSME development. [ABSTRACT FROM AUTHOR]

This study attempts to research in terms of branding on Islamic banks and emphasize the important roles by understand the perception of its customer in order to see which factors are the most dominant or the weakest for further advance strategic plan in this industry. This exploratory research measures not only tangible dimension but also intangible dimension such the value of mashlahat (Islamic values) as an alternative apart from the pragmatic concept on business activities with profit and loss to be gained. A total 400 samples surveyed with 52 questions fewer than six different dimensions to measure the customer’s perception on Islamic bank branding. Partial least square-structural equation modelling employs to measure the strength of each variable and its correlation between variables tested. In the analyzes, it contains two phases of analyses namely measurement analysis and structural analyzes. Out of the six variables tested in this study, the variable of Islamic values shows the highest value followed by regulation variable. These illustrate that Islamic values and regulation have the strongest power to influence bank sharia performance according to the customers. The others four variables tested such as financial, services, infrastructure and human resources have slightly the same power to influence the dependent variable. These results imply that the increasing of these three factors will significantly improve the performance of bank sharia in Indonesia in general, and the performance of sharia banks is not necessarily measured by the strength of its money deposits, its risk mitigation ability and how much funds have been used (in the profit loss sharing scheme). This study proposes a measurement in the value of benefit as a counterweight to the concept of pragmatic thinking that focuses on business activities. The concept of wellbeing is measured by indicators of perception, participation and acceptability with an approach based on Islamic perspectives, namely the Tawhidic String Relations (TSR) methodology, by looking at every activity and assessment of the dimensions of the world and the hereafter. In general, this research can be a reference instrument for researchers in the banking sector that the measurement of spirituality and moral aspects are also important to be a variable of performance measurement, especially in the Islamic banking sector. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to examine the impact of Islamic consumer behavior on the potential demand for Islamic banking by using the Islamic religiosity approach. By classifying the potential demand into the high, middle and low categories, this study attempts to examine whether the level of potential demand is influenced by aspects of social, cultural, psychological and personal considerations. Design/methodology/approach: This research was a quantitative study based on a survey on 18 regions in West Sumatera, Indonesia in 2019. Data were collected from 1818 respondents and analyzed by using multinomial logistic regression. Findings: The findings reveal that the increasing factor of social and personal causes the tendency of the community to be in the high potential group as an Islamic bank customer by 1,661 times and 1,592 times as compared to in the low potential group. Psychological aspects also increase the probability of the community being in the medium demand potential as an Islamic bank customer. Research limitations/implications: Although this study has attempted to elaborate on the consumers' behavior variable with an Islamic religiosity perspective, theoretically this concept is not yet well established and still requires many applications in future research. Future studies are expected to enrich this analysis by examining more cases with communities that have different socio-demographic characteristics. This study also limits the exogenous variables used as predictors. Practical implications: This study aims to assist managers of Islamic banks to formulate strategies for developing Islamic banks based on Islamic consumer behavior because the facts showed that understanding of Islamic law and religious education in the family, Islamic lifestyle and also religious beliefs affected the potential demand for Islamic banks. Social implications: From a policy perspective, this finding can be a consideration for Islamic banks, that the expansion of the market share of Islamic banks will be more appropriately directed to Muslim groups with indications of high adherence to Islamic values, those with Islamic lifestyles, and the Muslim community groups with Islamic understanding backgrounds and good religious education. Originality/value: This study measures the impact of Islamic religiosity on the probability of people being in the high, medium or low potential group in adopting Islamic bank services, and these findings are important in the development of Islamic banking in Muslim-majority countries. [ABSTRACT FROM AUTHOR]

The aim of the research is to perform a systematic and comprehensive time series analysis of the resilience of Islamic banks in Indonesia, with a focus on macroeconomic factors. The research method used in this study is time series analysis, which is a quantitative descriptive approach. Meanwhile, data collection was carried out by systematically and consistently analyzing the quarterly financial statements of Bank Mega Syariah in the 2009-2019 period. The data is then analyzed in time series utilising multiple regression equations to provide an approximate of Islamic banks' stability and resilience. According to the findings of this study, variables influence the resilience and stability of Bank Mega Syariah. Furthermore, bank resilience and stability are influenced by factors other than bank profits. External associated with economic growth, inflation rates, and the exchange rate of the rupiah against the US dollar both have a massive effect. This study is expected to have an impact on the development of the literature, particularly in terms of the effect of financial vulnerability on the banking sector. In practice, the findings of this study are found to be essential to stakeholders, particularly Islamic financial bankers. [ABSTRACT FROM AUTHOR]

This study aims to examine the effect of Islamic Corporate Governance and Sharia Compliance on indications of fraud occurring in Indonesia's Islamic Banks from 2016 to 2020. The independent variables are Islamic Corporate Governance and Sharia Compliance with the Proxy of Islamic Income Ratio and Profit Sharing Ratio. The dependent variable is fraud in Islamic Commercial Banks. The population in this study were all Islamic Banks registered in the Financial Services Authority in the period 2016 to 2020. The samples were selected using the purposive sampling method. In this study, there were 11 Islamic Banks with a 5 years research period so that the total sample used in this study amounted to 55. The analytical method used in this study was logistic regression which was processed using SPSS version 25. The results of this study indicate that the Islamic Corporate Governance variable has a positive influence on indications of fraud occurring in Islamic Commercial Banks, Sharia Compliance with the Proxy Profit Sharing Ratio has a negative influence on indications of fraud occurrence in Islamic Commercial Banks while Sharia Compliance with the proxy of Islamic Income Ratio does not affect the indications of the occurrence of frauds in Islamic Commercial Banks. [ABSTRACT FROM AUTHOR]

This study aims to determine whether the merger of Himbara Syariah Banks consisting of BRI Syariah Banks, BNI Syariah Banks and Mandiri Syariah Banks can improve the performance of the Islamic banking sector in general and in particular to determine the performance of the bank resulting from the merger, namely Bank Syariah Indonesia. The research method used is by using an unpaired difference test, namely the Mann Whitney test, with a comparison between before and after combining for 182 days each. The results showed that it turned out that the merger had a fairly good impact on the performance of the Islamic bank, although it had only been running for 182 days. advancing the world of Islamic banking in Indonesia can run well and smoothly. [ABSTRACT FROM AUTHOR]

The present research analyzed the impact of Islamic Corporate Governance and bank reputation on the performance of Islamic banks in Indonesia. In this study, the population consisted of 11 Islamic Commercial Banks (ICB) registered in Bank Indonesia. Based on the purposive sampling technique, 8 Islamic banks were selected as the samples because they met the predetermined criteria. The research data were obtained from the annual report during the 2015-2019 period and were subsequently analyzed by the panel data regression analysis using the EViews 9.0 software for Windows. The findings revealed that 1) Islamic Corporate Governance had a positive and significant impact on Islamic bank performance, 2) Bank reputation had a positive and significant impact on Islamic bank performance, and 3) Islamic Corporate Governance and bank reputation simultaneously had a positive and significant impact on Islamic bank performance. [ABSTRACT FROM AUTHOR]

Financing analysis is the process of analyzing the ability of bank customers to pay installments to minimize the risk of a customer not paying installments, which is also called Non-Performing Financing (NPF). In 2020 the NPF ratio at one of the Islamic banks in Indonesia increased due to the decline in people's income during the Covid-19 pandemic. This phenomenon has led to bad banking performance. In December 2020 the percentage of NPF was 17%. The imbalance between the number of good-financing and NPF customers has resulted in poor classification accuracy results. Therefore, this study classifies NPF customers using the Logistic Regression and Synthetic Minority Over-sampling Technique Nominal Continuous (SMOTE-NC) method. The results of this study indicate that the logistic regression with SMOTE-NC model is the best model for the classification of NPF customers compared to the logistic regression method without SMOTE-NC. The variables that have a significant effect are financing period, type of use, type of collateral, and occupation. The logistic regression with SMOTE-NC can handle the imbalanced dataset and increase the specificity when using logistic regression without SMOTE-NC from 0.04 to 0.21, with an accuracy of 0.81, sensitivity of 0.94, and precision of 0.86. [ABSTRACT FROM AUTHOR]

This paper extends the Theory of Planned Behavior by adding the variables of self-awareness to measure customers' attitudes and behavior in choosing Islamic banking. We collected data from all Islamic bank customers who were living in Indonesia. The sampling technique employed was purposive sampling. From the specified criteria, 230 Islamic bank savings consumers were selected as research samples. Based on 230 Islamic bank consumers who participated in the study, the study indicated that questionnaires about self-awareness had good external validity. The model is tested using PLS-Structural Equation Modeling (SEM) approach. The results showed that self-awareness influenced attitude and behavior to use Islamic banks. Thus, self-awareness is an important construct in increasing positive attitudes and behavior towards Islamic banks. By discovered the relationship between self-awareness and attitudes and behavior of Islamic bank customers, Islamic banking must establish strategies to protect existing customers and attract new customers. Strategies that can be implemented include increasing financial literacy and inclusion in the community. [ABSTRACT FROM AUTHOR]

This study analyses the factors that affect the profitability of Islamic banks in Indonesia. The independent variable consists of efficiency, risk, liquidity, CAR, and macroeconomic conditions: GDP and inflation. The dependent variable is profitability. This research was conducted in the Islamic banking industry in Indonesia. The research uses quarterly data from 2006-2019. The purpose of this study is to analyse the effect of efficiency, risk, liquidity, capital, and macroeconomic conditions on the profitability of Islamic banks in Indonesia. Data analysis techniques used multiple regression. The results showed that the efficiency and risk had a positive effect on profitability. Inflation has a negative effect on profitability. While liquidity, CAR, and GDP do not affect the profitability of Islamic banks. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to investigate the relationship between corporate governance and Shariah non-compliant risk (SNCR) that is unique for Islamic banks. The study examines the roles of Shariah committee along with the board of directors in mitigating SNCR. Design/methodology/approach: The paper empirically investigates the implications of characteristics of board of directors and Shariah committee on the SNCR by using a sample of 29 full-fledge Islamic banks from Malaysia and Indonesia over the period 2007-2017. All data is hand collected from the Islamic banks' annual reports with the exception of country-level data collected from the World Bank database. Findings: The results show that banks with a smaller board size and higher proportion of independent board members are likely to have lower SNCR. The findings also indicate that the financial expertise and higher frequency of Shariah committee meetings reduces the SNCR. Collectively, the analysis shows that banks with strong corporate governance environments reduce SNCR. Practical implications: The findings of the study shed light on the relationship between corporate governance practice, Shariah committee characteristics and SNCR. The results can be used by different stakeholders such as policymakers, boards of directors and senior management of Islamic banks to mitigate SNCR. Originality/value: This study extends the literature on corporate governance and risk-taking by including additional dimensions of governance and risk type. The corporate governance mechanism at the board level is complemented by including the Shariah committee characteristics and SNCR which is relevant to Islamic financial institutions is examined. [ABSTRACT FROM AUTHOR]

The purpose of this study is to analyze the effect of Islamic social reporting index which is moderated by sharia compliance on maqhasid sharia index. The population of this study was 14 Islamic banks in Indonesia. Meanwhile, the sample used was the annual report of Islamic banks from 2014-2018 a total of 70 observational data. The sampling technique used was simple random sampling. The data analysis method used was regression with moderation. Based on the results of the partial test, Islamic social reporting index and sharia compliance individually affect the maqhasid sharia index. In addition, based on the results of the regression test with moderation, the Islamic social reporting index moderated by sharia compliance affects on the maqhasid sharia index. Thus, the conclusion is that sharia compliance is proven to moderate the effect of Islamic social reporting index on the value of the maqhasid sharia index. A negative coefficient value indicates that the effect given is negative. The point is that the increase in the number of sharia complications has the effect of reducing or weakening the effect of the Islamic social reporting index on the value of the maqhasid sharia index [ABSTRACT FROM AUTHOR]

This study aims to examine the effect of capital structure, intellectual capital, and shariah compliance on corporate value in Islamic Banking in Indonesia in 2012-2015. This research uses descriptive research with multiple linear regression methods. The research sample was based on purposive sampling totaling 10 Islamic Commercial Banks. The data used is secondary data. The technique of collecting data is through the website www.ojk.go.id and the website of each Sharia Commercial Bank. The results of the study show that the capital structure influences the value of the company. This is in accordance with the trade off theory that the capital structure that is below the optimal point will affect the value of the company. Intellectual capital does not affect the value of the company. This study does not support resource-based theory and theory stakeholders where companies that are able to manage and utilize human resources effectively can create value added for the company. Shariah compliance does not affect the value of the company. It is possible for Islamic banks not to fully disclose compliance shariah in the annual report. [ABSTRACT FROM AUTHOR]

Research Aims - Some Islamic banks have experienced decreasing performance after spinning off from the parent company, and it is presumed that the amount of capital may have contributed to the decline. Hence, this paper aims to find a minimum amount of capital that Islamic banks must own after spin-offs in order to be able to compete in the market and to achieve excellent performance. Design/Methodology/Approach - We employ the OLS method for small banks (assets below Rp 5 trillion) with variable Capital as the dependent variable and Bank Performance (ROA, ROE, BOPO, and NPL) as the independent variable. We conduct several rounds of regression analysis by including different dummy variables to capture an increase in bank performance when certain capital limits are applied. Various results of the interaction between Capital and Bank Performance are mapped into the frontier line formed by the regression equation. We then compare the frontier results with the actual bank identifier to map the position of each bank relative to the frontier. We add cluster analysis to confirm the results further. Research Findings - Descriptive statistics of the small banks shows that conventional banks perform better in overall performance, efficiency and risk in comparison with the Islamic banks. Several dummy variables are set to represent the size of bank capital (Rp. 800 billion, Rp. 1 trillion, Rp. 1.2 trillion, and Rp. 1.5 trillion), and all dummy variables are significant; the corresponding coefficient reveals that the higher the capital, the better the average performance. Also, the relationship between performance and bank capital is a non-linear (quadratic) relationship that is convex, indicating that capital is not the only critical factor that contributes to the bank's improvement. The cluster analysis partially confirms that there is a specific pattern of capital in each of the clusters. Theoretical Contribution/Originality - The result of this study is in line with some previous literature on the relationship between capital and bank performance. In banks with small capital, capital has a positive influence on bank performance but has the opposite effect after reaching a certain point. In the literature related to spin-offs in Islamic banking, there are only a few studies about the performance of small banks after the spin-off and even fewer (or none) that discuss the critical role of capital and its relationship with the bank's performance after the spin-off. Our findings support previous studies conducted by Siswantoro (2014). Managerial Implications in the South East Asian Context - With the implementation of the dual banking system in several southeast Asian countries, many conventional banks have Islamic bank subsidiaries. Findings from this research could help banking regulators in the South East Asian countries to carefully re-evaluate their spin-off strategy for the unit bank, especially regarding the limit of capital requirement before the spin-off. The bigger the capital size, the better the performance of the business unit after the spin-off. Research Limitation & Implications - This research only uses variable capital as a determinant for the bank's performance after spin-offs. However, as suggested by the resulting R-Squared from the regression formula (66%) and the convex trend line of the frontier analysis, other factors may contribute to the banking performance. Future research should include several other indicators for spin-off success, such as parent-subsidiary relationship (Tubke, 2004; Lindholm-Dahlstrand, 2000) and parent's size (Cristo & Falk, 2006), credit and liquidity position before spin-offs. [ABSTRACT FROM AUTHOR]

The purpose of this study is to examine the effect of bank competition on banking industry stability in sharia and conventional banks in Indonesia from 2011 to 2015. Panzar Rosse H-statistic model was used to measure the level of bank competition and the Z-score as a measure of banking stability. The results of this study indicate that both bank competition and stability had a positive relationship. The Islamic and conventional banking industry in Indonesia support the competition stability theory, which states that a competitive industry encourages bank stability because of low adverse selection and moral hazard. The results of this study also show that conventional banks had greater stability consistently than Islamic banks for all bank groups. [ABSTRACT FROM AUTHOR]

Purpose The purpose of this paper is to explore the structural relationship between experiential loyalty and its seven drivers – interaction quality, physical environment quality, outcome quality, affective quality, experiential quality, experiential trust and experiential satisfaction in the context of Islamic banks.Design/methodology/approach The data used in this study were based on a convenience sample of 474 respondents from Jakarta, Bogor and Depok in Indonesia.Findings Interaction quality, physical environment quality and outcome quality positively influence experiential quality, which in turn, leads to experiential trust. Also, experiential trust has a positive influence on experiential satisfaction. Both experiential trust and experiential satisfaction are determinants of experiential loyalty.Practical implications The results will assist Islamic bank management in developing and implementing market-orientated service strategies to increase interaction quality, physical environment quality, outcome quality, affective quality experiential quality, experiential trust and experiential satisfaction in order to increase experiential loyalty.Originality/value This paper provides data that result in a better understanding of the relationships among interaction quality, physical environment quality, outcome quality, affective quality, experiential quality, experiential trust, experiential satisfaction and experiential loyalty in the context of Islamic banks. [ABSTRACT FROM AUTHOR]

This study investigates the impact of Sharia-compliant financing on job creation in Indonesia. Utilizing provincial-level data and employing fixed effects panel data regression with the GLS estimator, we explore the decomposition effects of Sharia-compliant financing on job creation. Our findings reveal that an increase in the market share of sharia-compliant financing in total, working capital, and consumption does not have a significant impact on job creation. Surprisingly, the share of sharia-compliant financing in investment shows a significant negative impact on job creation. However, it is important to note that overall, Sharia-compliant financing has a positive impact on increasing job creation. Specifically, Sharia-compliant financing for working capital exhibits the highest impact on job creation, followed by Sharia-compliant financing for investment and households. Based on these findings, we propose an open innovation framework to expand the dissemination of Sharia-compliant financing, with a particular focus on MSMEs, with the aim of enabling Islamic banks to play a pivotal role in job creation. [ABSTRACT FROM AUTHOR]

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The high Gini Index of Indonesia indicates that the economic growth is not accompanied by equal income-distribution. This study aimed to determine the awareness and attitudes of the Muslim consumers of sharia banks in Indonesia towards sharia banking practice and sharia working capital financing. The conceptual framework of this study was developed based on AIDA's hierarchy of effects model and the theory of planned behavior. Structural equation modelling processed with LISREL software was applied to analyze the structural relationships of four latent variables. The primary data collection was performed through self-administered questionnaire with 125 Muslim consumers of sharia banks in Indonesia who own business. The main result suggests that to increase the market share of sharia banking in Indonesia, and eventually to reduce poverty rate and income inequality, is to increase the awareness and attitudes of the consumers towards sharia banking practice and sharia working capital financing. The initiative should begin with simultaneous paradigm shift from all parties involving the Muslim community, sharia banking, and government. The required paradigm shift refers to making sharia banking as the way of life of Muslims by practicing sharia law-based financial activities, and not as a substitute of conventional banking. [ABSTRACT FROM AUTHOR]

Analysis of profitability determinants will contribute in increasing Islamic bank profitability. This research aims to analyse Islamic bank profitability determinants in the short and long run. It uses data of Indonesian Islamic banking. It applies dynamic model of Error Correction Model (ECM) to find several internal and external factors that influence Islamic bank profitability in the short and long run. This research shows that Total Financing becomes dominant variable in the short run and has positive effect. In the long run, Loan Loss Provision becomes dominant variable but has negative effect. Mark Up Financing has significant influence in the short and long run, but Equity Financing only has significant influence in the long run. Surprisingly, this research indicates that Equity Financing has stronger influence than Mark Up Financing in the long run. [ABSTRACT FROM AUTHOR]

The research aims to investigate factors of profitability that affected the performance of conventional bank and Islamic bank in Indonesia from period 2002 to 2010. With use regressions models, where ROA and ROE are as dependent variables presenting profitability of banker, whereas internal and external factors as independent variables include: GDP per capita, size, financial development indicator (FIR), liquidity, concentration, cost, numbers of branches, operational cost operational income (BOPO), NPL's ratio, and inflation. The results identify that in conventional bank in Model I, number of branches is the most significant determinant of conventional banks performance and in Model II numbers of branches, GDP per capita, FIR, and liquidity are the most significant determinant of conventional banks performanc, whereas in Islamic bank in Model I, NPL's ratio, numbers of branches, and inflation are the most significant determinant of Islamic bank, and in Model II there are no significant determinants of Islamic bank performance. [ABSTRACT FROM AUTHOR]

The purpose of the study was to investigate which factors determine saving and financing in Islamic banks in Indonesia by using Gregory–Hansen cointegration, vector error correction mode (VECM), Granger causality, and the impulse response function. The results disclose the existence of a long-running cointegrating relationship with a structural break in the deposit and financing case to the consumer price index, industrial production, interest rate, exchange rate, and Jakarta Islamic Index. Most of the structural breaks appeared in January 2006 and April 2007 for both deposit and financing, revealing the first stage of the financial crisis. Any short-term deviation between deposit and financing will give rise to a stable relationship in the long term. In the short-term, there is bidirectional causality between deposits and industrial production and between the consumer price index and financing. This finding shows that real activity, as measured by industrial production, is a highly determinant factor of Islamic bank deposits, while inflation, as measured by the customer price index, is the determinant factor of Islamic bank financing. Our results also suggest that a mix of dynamic behaviors from both Islamic bank savings and financing was revealed in response to the shock of the macroeconomic variable, giving better insight for the government and stakeholders into Indonesian Islamic banking. [ABSTRACT FROM AUTHOR]