The Consumption-Health Nexus Revisited: Examining the Benefits of Social Insurance for the Poor in Indonesia

Households in developing countries are typically more vulnerable to illness episodes. This paper uses a panel micro data set from Indonesia to investigate whether households are able to smooth their consumption against idiosyncratic health shocks and to examine the mitigating effects of a social health insurance programme for the poor on such shocks. We find that Indonesian households manage to keep consumption smooth after deterioration in adult health. These findings are robust to various health measures and different specifications. The difference-in-differences (DiD) estimator shows a marginal effect of the insurance programme on insuring household consumption from major health problems. Further investigation reveals heterogeneous effects of the social insurance programme. While it plays a trivial role in protecting rural households, the effect of the health intervention is stronger in urban areas of the country. We argue that supply-side factors seem to be partly responsible for this finding

Performance Evaluation of Property and Real Estate Companies Listed in Indonesia Stock Exchange Using Data Envelopment Analysis

This paper aims to evaluate performance of property and real estate companies listed in Indonesia Stock Exchange using Data Envelopment Analysis (DEA) method. Samples were 23 companies listed from 2009 to 2012.. However, only one company that consistently having technical efficiency equal 1. The main cause of inefficiency from 2009-2011 was scale inefficiency while inefficiency happened in 2012 was pure technical efficiency. Overall the companies operate efficiently under constant returns to scale is showing an increase from 17.39-39.1

Price Earnings Ratio and Stock Return Analysis (Evidence from Liquidity 45 Stocks Listed in Indonesia Stock Exchange)

Price to Earnings Ratio (PE Ratio) has been broadly used by analysts and investors for stock selection. Stocks with low PE ratio are perceived as having cheaper current price hence expected to generate higher return in subsequent period. This paper aims to examine predictability of stock return using PE Ratio based on historical relationship between PE Ratio and subsequent stock return. Particularly, it seeks to find whether stocks with high PE Ratio followed by low stocks return and on the contrary, stocks with low PE Ratio followed by high stocks return. Using stocks which are included as member of Liquidity 45 and observation period 2005-2010 as samples, results show that there is significance difference between low PE and high PE portfolio stock return in short term (holding period of 6 months) but there is no significance difference between both portfolio stock return if they are hold for one, two, three, and four years. This research also finds that there is no significant relationship between stock return and (trailing) PE Ratio which suggests that (trailing) PE Ratio is not useful in estimating both short term and long term stock return

Intellectual Capital in Indonesia : Dynamic Panel Approach

Purpose Intellectual capital (IC) has been considered as a valuable asset in the wealth creation and sustainability of the company; however, limited and mixed results are found on its impact on firm financial performance and market value (MV). This paper aims to investigate the influence of IC toward MV and financial performance of publicly listed firms in Indonesia. In addition, this research also presents the comparison of the high and low level of knowledge industries regarding IC performance. Design/methodology/approach A balanced panel data of 127 firms from 12 industries in Indonesia during 2010 until 2017 was evaluated using dynamic panel regression and administering a well-developed Blundell�Bond instrument (dynamic panel data estimator) to account for endogeneity problem. Findings The results of this study showed that IC had a significant and positive impact on firm performance. Specifically, structural capital efficiency and capital employed (CE) efficiency have been contributed to the value creation of the company, after controlling for firm size and type of industry. Different to the theoretical expectation, this research found no significant relationship between IC and MV of the firm. However, when the sample was clustered into high-level and low-level knowledge industry, CE displayed positive and significant relationship in high-level industry. Originality/value This research contributes to IC research by having a larger sample of Indonesian firms from all industries except banks and financial institutions and using Modified Value Added Intellectual Capital measurement model. To address the endogeneity problem, dynamic panel regression using system generalized method of moment was applie

Price Earnings Ratio and Stock Return Analysis (Evidence from Liquidity 45 Stocks Listed in Indonesia Stock Exchange)

ABSTRAK ABSTRACT Price to Earnings Ratio (PE Ratio) has been broadly used by analysts and investors for stock selection. Stocks with low PE ratio are perceived as having cheaper current price hence expected to generate higher return in subsequent period. This paper aims to examine predictability of stock return using PE Ratio based on historical relationship between PE Ratio and subsequent stock return. Particularly, it seeks to find whether stocks with high PE Ratio followed by low stocks return and on the contrary, stocks with low PE Ratio followed by high stocks return. Using stocks which are included as member of Liquidity 45 and observation period 2005-2010 as samples, results show that there is significance difference between low PE and high PE portfolio stock return in short term (holding period of 6 months) but there is no significance difference between both portfolio stock return if they are hold for one, two, three, and four years. This research also finds that there is no significant relationship between stock return and (trailing) PE Ratio which suggests that (trailing) PE Ratio is not useful in estimating both short term and long term stock returns

The Effect of Changes in Tick Price and Lot Size on Stock Liquidity: Evidence from Indonesia Stock Market

New regulation in the tick price and lot size was implemented in Indonesia Stock Exchange on 6 January 2014. This research aims to examine the effects of the changes toward stock liquidity. Comparison of stock liquidity measurement variables before and after the event is conducted with 15 days window period. 370 stocks fulfilled the criterion and used as sample in this paper. This study employs paired sample t-test for normally distributed data and Wilcoxon test for not normally distributed data to assess mean significant differences before and after the event. Result shows that to some extent, the event enhanced stock liquidity

DOWNWARD SLOPING DEMAND CURVES FOR STOCK AND LEVERAGE

This research attempts to investigate the effect of downward sloping demand curves for stock on firms' financing decisions. For the same size of equity issuance, firms with steeper slope of demand curves for their stocks experience a larger price drop in their share price compare to their counterparts. As a consequence, firms with a steeper slope of demand curves are less likely to issue equity and hence they have higher leverage ratios. This research finds that the steeper the slope of demand curve for firm's stock, the higher the actual leverage of the firm. Furthermore, firms with a steeper slope of demand curves have higher target leverage ratios, signifying that these firms prefer debt to equity financing in order to avoid the adverse price impact of equity issuance on their share price

Super Slack-Based Model Efficiency and Stock Performance of Manufacturing Industry Listed in Indonesian Stock Exchange

This research examines the efficiency of Indonesian manufacturing industry listed in Indonesian Stock Exchange during the period of 2010-2014 using non-parametric output oriented Super Slack-Based Model (SBM). Furthermore, resulted changes of efficiency score are regressed on stock performance to investigate the relationship. 77 companies in manufacturing industry classified as basic, miscellaneous and consumer goods industry listed in Indonesian Stock Exchange during 2010-2014 which resulted in 308 pooled data is being analyzed. The input variables used in this paper are salary wages and benefit, raw materials cost, and net fixed asset while the output variable is earning before tax. Result shows that on average the highest output oriented Super SBM efficiency is miscellaneous industry while basic and consumer goods industry are not efficient on average

Sustainable finance: ESG/CSR, firm value, and investment returns

We review the burgeoning sustainable finance literature, emphasizing the value implications of ESG (environmental, social, and governance) and CSR (corporate social responsibility) practices. We use a discounted cash flow valuation framework to identify value drivers through which such practices can enhance firm value. Collectively, empirical evidence supports that they increase firm value by motivating employees, strengthening customer–supplier relationships, boosting long-term growth, increasing dividends, and reducing financing costs. Furthermore, more socially responsible firms deliver no higher excess stock returns in the long run. Green bonds neither provide issuers with a price premium nor make investors sacrifice on lower returns. Socially responsible investing (SRI) funds generate no higher risk-adjusted long-term returns than non-SRI funds. Finally, we briefly suggest several topics for future research on sustainable finance.Ministry of Education (MOE)We acknowledge financial support by the Ministry of Education (Singapore) (grant number RT01/19), the National Science Foundation of China (72072067), the 111 Project (B20094), Beijing Outstanding Young Scientist Program (BJJWZYJH01201910034034), and Indonesia Endowment Fund for Education LPDP (LOG274420205623091)