The impact of credit risk on market discipline: Exploring the moderating role of corporate governance through Generalized Method of Moments (GMM) analysis in banking companies

High credit risk poses a significant threat to banks, underscoring the necessity to examine the effectiveness of good corporate governance in mitigating such risks. This study aims to assess the impact of credit risk, represented by non-performing loans (NPLs), on market discipline, reflected through deposit growth, and the moderating role of good corporate governance, focusing on board size and institutional ownership, in this dynamic. Data for the study were sourced from the financial reports of banking companies on their official websites, IDN Financial, and the Indonesia Stock Exchange. The study used a purposive sampling method to analyze a sample comprising 30 banking companies and yielded 300 observations. The research methodology involved dynamic panel regression analysis using the Generalized Method of Moments (GMM) technique. The findings reveal that non-performing loans negatively impact deposit growth. However, it was also found that board size and institutional ownership could positively moderate the adverse effects of non-performing loans on deposit growth. This suggests that market discipline, manifesting as a reduction in deposits and an escalation in credit risk within the Indonesian banking sector, can be effectively managed and mitigated through the strategic implementation of good corporate governance practices, particularly by optimizing board size and enhancing institutional ownership. These mechanisms enable more robust market discipline, contributing to better credit risk management and promoting healthier deposit growth

The impact of fiscal policy on the underprivileged population in Indonesia

This study examines the impact of government spending across various sectors on poverty in Indonesia, motivated by the need to understand how fiscal policies affect the well-being of people experiencing poverty. Using Ordinary Least Square (OLS) and Least Square Dummy Variable (LSDV) models, the findings reveal that government spending on public services, health, education, and social protection significantly affects the number of poor people. However, spending on public services and education shows a positive coefficient, which may result from mandatory spending regulations not directly aimed at improving welfare. In contrast, government spending in the economic sector has an insignificant impact on poverty, indicating that the effects may require more than one period to manifest. Further analysis is necessary to explore this relationship. The consistency of the results was enhanced by incorporating district/city status as a predictor. These findings highlight the need for a more targeted approach to government spending to reduce poverty in Indonesia effectively

Exploring the determinants of NEET youth in Jambi Province: A socioeconomic perspective

This study aims to analyze: 1) the socioeconomic characteristics and NEET (Not in employment, education, or training) status of young individuals in Jambi Province; 2) the determinants influencing the NEET status of young people in Jambi Province. The data utilized in this study is derived from a survey conducted in four sample villages within Jambi Province, consisting of 200 young participants. Descriptive statistical tools, single-frequency and cross-frequency tables, and binary logit regression are employed for analysis. The findings of the study reveal that: 1) NEET youth, when compared to non-NEET youth, tend to be older, have a higher proportion of females, possess higher education levels, are more likely to be married, are predominantly non-migrants, and have fewer siblings or step-siblings; 2) The parents of NEET youth, in comparison to non-NEET youth, generally have higher incomes and predominantly belong to non-Malay ethnicities in Jambi. 3) Factors significantly impacting the categorization of youth as NEET include gender, education, marital status, and parental income

The effect of income prospects, social media, and environment through motivation on student entrepreneurial interests during the COVID-19 pandemic

This study aims to determine and analyze the effect of income prospects, social media, and environment on university students’ entrepreneurship interest during the Covid-19 pandemic directly and indirectly through motivation. This study uses primary data by distributing questionnaires to respondents. The population of this study is active students of the Faculty of Economics and Business, Universitas Jambi, Indonesia, in the even semester of 2020/2021. The sampling size in this study is determined using Slovin’s formula. The number of samples acquired is 191 students. The data is analyzed using path analysis. The results show that income prospects and social media directly affect motivation, while the environment does not directly affect motivation. The prospects of income, social media, and environment do not directly affect the interest in entrepreneurship, while motivation directly affects the interest in entrepreneurship. The motivation variable can mediate the income prospects and social media variable on the interest in entrepreneurship but cannot mediate the environmental variable in the interest in entrepreneurship.Â

Shifting the paradigm for securing efficient management of exchange rate in Nigeria: A GARCH and BEKK-MGARCH analysis

The influence of foreign exchange on all spheres of any economy is germane to determining its extent of development. Most developing countries have been subjected to managing the integrity of the exchange rate arising from their disadvantageous position in world trade. Nigeria is not an exemption either; this is due to its constant interventions in the foreign exchange market from time to time and by the policy of the existing government in power. However, the interventionist policy framework has been more harmful to Naira as the currency depreciates unabatedly. The pertinent question is whether monetary policy should be the only approach to effective exchange rate management or be combined with fiscal and income policies. Irrespective of the policy choice, the aim, target, and instrument must be complementary without unnecessary disruptions midway, as usually experienced in Nigeria. These inconsistencies have come to bear enormously on the country's exchange rate management. Rather than focusing on the impact of exchange rate volatility on industrial development that could warrant foreign exchange inflows, this paper considers industrialization as an approach to effectively managing exchange rates in Nigeria. This analysis employs a univariate GARCH and BEKK-MGARCH model, using high-frequency monthly time series data from 2000 to 2019, to examine the volatility transmission between the foreign exchange market and the industrial sector. The model estimation uses the Conditional Maximum Likelihood Technique (CMLT). It was discovered that industrial development positively influenced the official market exchange rate compared to the parallel market exchange rate, reducing its volatility. The study thus suggests the vigorous pursuit of foreign exchange earnings and usage policy by earning entities, floating Diaspora bonds, enhancing and encouraging remittances and repatriation of illicit financial outflows to enhance industrialization. This will discourage arbitraging, increasing foreign exchange inflows and stabilizing the economy

Analysis of technical efficiency and socio-economic factors influencing the development of smallholder oil palm plantations in Batanghari Regency, Indonesia

This study aims to analyze technical efficiency and the influence of socio-economic factors on the development of smallholder oil palm plantations. Data were collected using the Simple Random Sampling method, utilizing both primary and secondary data. The analytical methods employed include descriptive analysis and the Stochastic Frontier Production Function with the Maximum Likelihood Estimation (MLE) method. The results reveal that the average size of oil palm plantations is 3.9 hectares per farmer, with a productivity rate of 13,853 kg/ha. Production factors such as land area, NPK fertilizer, urea, and dolomite fertilizer significantly influence production, whereas labor and herbicides show no significant effects. The technical efficiency levels range from 0.81 to 0.95, with an average of 0.86, which is greater than the threshold of 0.62, indicating that oil palm plantations operate at a technically efficient level. Socio-economic factors, including land area and plantation distance, potentially increase technical inefficiency but have no statistically significant effect. Conversely, variables such as farming experience, access to technology, and active participation in farmer groups help reduce technical inefficiency. To promote the development of smallholder oil palm plantations, it is crucial to focus on enhancing technical efficiency, as it directly impacts productivity. Additionally, consideration of farmers' socio-economic conditions and external factors such as market prices and environmental conditions is essential

Who get paid higher? A study on wages decomposition between manufacturing and non-manufacturing workers in Indonesia

In 2008, Indonesia became a member of the G20, and it is estimated that in 2030 it will be in the top seventh economic countries if it can keep growing. Nevertheless, high economic growth was followed by an inequality problem. This study will analyze the wage gap between manufacturing and non-manufacturing workers. Using Sakernas 2020 and the Mincer wage model regression, the result showed that all independent variables: age, level of education, gender, region of residence, marital status, toddler, disability status, and certificate training influence wages for both manufacturing and non-manufacturing workers. Next, the Blinder-Oaxaca method decomposes the wage gap between both groups. It is shown that manufacturing workers get higher wages than non-manufacturing workers because of differences in the characteristic of workers and also industry attributes which, in this case, capital intensity

How liquidity, profitability, and leverage ratios influence financial distress: A study on Indonesian mining firms

This study investigates the impact of liquidity, profitability, and leverage ratios on financial distress in mining companies listed on the Indonesia Stock Exchange. It posits that higher liquidity in a company correlates with reduced financial distress. The research encompasses eight mining companies observed from 2016 to 2020. Purposive sampling was employed to select a sample of eight companies meeting specific criteria. The study utilizes multiple linear regression analysis as its analytical approach. The findings, significant at the 5% level, reveal that liquidity, profitability, and leverage ratios collectively exert a substantial influence on financial distress, accounting for 85.3% of the variance in the dependent variable. Specifically, the study concludes that: 1) Liquidity has a significant negative effect on financial distress, 2) Profitability also demonstrates a significant negative impact on financial distress, and 3) Leverage exhibits a significant positive effect on financial distress

Determinants of performance improvement of Micro, Small, and Medium Enterprises (MSME) in the border market of North Timor Central District – Timor Leste

This study examines the impact of financial literacy, technological innovation, government support, and subjective norms on the performance of Micro, Small, and Medium Enterprises (MSMEs) in the North Central Timor District (TTU)-Timor Leste Border Market. Furthermore, it seeks to identify appropriate strategies for enhancing MSME performance in this region. Both multiple linear regression analysis and descriptive analysis were employed as research methods. The study population included all MSMEs in the TTU District, totaling 693 entities. The researchers employed a purposive sampling technique based on the Slovin formula, selecting 80 respondents as research samples. The findings indicated that technological innovation, government support, and subjective norms significantly affect MSME performance in the TTU-Timor Leste Border Market. To improve the performance of MSMEs, various strategies can be implemented. These encompass the enhancement of financial literacy through training and mentoring programs, adopting e-commerce within the digital economy, and improving human resource quality and product standards. Other strategies include fostering partnerships among institutions, cultivating an investment-friendly bureaucracy, implementing product labeling, establishing legal business associations, and promoting motivation and self-confidence

Overcoming the threat of poverty and social welfare amid the COVID-19 pandemic through sustainable funding sources

The COVID-19 outbreak is believed to have slowed economic acceleration in several countries, including Indonesia. Dramatic economic changes affect the country's performance in overcoming poverty and unemployment. This article aims to analyze the social and economic impact of the pandemic. It can be seen that the government, as the holder of the mandate of power, still and will continue to rely on social protection programs in dealing with the social and economic impacts that are currently being faced. The government can expand social security and assistance programs by strengthening collaboration between local authorities and non-state institutions. In addition to social protection, Indonesia, known as a country with a Muslim majority, has a religious instrument called zakat, which is believed to overcome the spike in poverty. Moreover, zakat is also considered a potential instrument to support some countries in achieving SDG goals as long as they are appropriately managed