Foreign Direct Investment And Regional Economic Growth In Indonesia: A Panel Data Study

The main objective of this study is to determine the effects of foreign direct investment on economic growth of twenty-six provinces in Indonesia during 1987-2000 using panel data analysis. Quantitative and qualitative analysis were used in this research. Qualitative analysis describes the foreign direct investment in Indonesia. Panel data analysis with fixed effect method was used as a quantitative analysis to capture the main objective of this research. The results of this study are : (1) Foreign Direct Investment in Indonesia is positively correlated with the economic growth, although it is not statistically significant; (2) The factors that promote foreign direct investment in Indonesia are domestic investment; private consumption, export, import, and education; (3) There is a complementary relationship between foreign direct investment and domestic investment; (4) The quality of human resources gives a strong effect on economic growth and foreign direct investment.Foreign Direce Investment, growth, Indonesia

The Effect of Governance on FDI Inflows in ASEAN

This study examines the effect of governance on FDI inflows in ASEAN countries for the period 2002-2018 using the Worldwide Governance Indicator (WGI) index. This study uses a principal component analysis (PCA) method to reduce six WGI indexes and performs panel data regression analysis using fixed-effect GLS (cross-section weights). This study uses data from World Bank for FDI, WGI, and several control variables.  The results of this study have provided empirical evidence that good governance is a very important key factor in encouraging FDI inflows to host countries. This study finds three governance elements that have a positive relationship with FDI inflows in ASEAN countries are the quality of regulations, rule of law, and control of corruption.Â

Zakat: Instrumen Peningkatan Ekonomi Masyarakat

Sebagian besar kaum Muslim masih akrab dengan kemiskinan. Kondisi ini seringkalimenyebabkan banyak masyarakat Muslim kita tidak mampu mendapatkanpendidikan yang memadai dan pada akhirnya membuat merekaterjebak dan sulitkeluar dari belenggu kemiskinan dan keterbelakangan. Kehidupan sosial-ekonominegeri ini dirasakan belum memberikan proteksi bagi kelompok lemah, sehinggaentitas ini sangat mudah ditindas oleh golongan pemilik modal besar. SebagaiNegara dengan jumlah penduduk Muslim terbesar di dunia, tidak berlebihan jikazakat dijadikan alat untuk menstimulasi pertumbuhan perekonomian secara mikromaupun makro dengan mentransformasikan zakat dari sebatas nilai dan kewajibanrelijius dalam masyarakat Islam menjadi salah satu instrument pentingpembangunan ekonomi Indonesia. Dengan hitungan kuantitatif umat Islam yangsangat besar, tentunya potensi zakat di Indonesia sungguh sangat melimpah.Namun dari Rp 216 triliun potensi zakat yang bisa diperoleh tersebut, ternyata baruterserap sekitar 1% atau Rp 2,73 triliun. Kondisi ini ditengarai terjadi karena belumtumbuhnya kesadaran akan penting dan manfaat zakat, serta kurangnyakepercayaan masyarakat terhadap lembaga zakat. Untuk itu sudah saatnyapemerintah meninjau dan mempertimbangkan kembali pentingnya menjadikan zakatsebagai instrument penting pembangunan perekonomian nasional dan peningkatandevisa negara di samping instrument fiscal atau ekonomi lainnya dengan bersinergidengan para ulama dan pemuka agama agar pemanfaatan zakat dapatteroptimalkan

FINTECH, BANKS, AND THE COVID-19 PANDEMIC: EVIDENCE FROM INDONESIA

This study investigates the relationship between fintech and banks and how this relationship is affected by the COVID-19 pandemic. We use monthly stock data of all banks consistently listed on the Indonesian Stock Exchange from February 2018 to March 2021. For fintech data, we use a total of four proxies that encompass both lending and borrowing aspects of peer-to-peer lending fintech. To provide robust results, we use five model specifications. Furthermore, we also estimate models using both the fixed effect and the two-step system generalized method of moments estimators. Our estimates indicate a relatively less negative impact of fintech on bigger banks. This relationship is further exemplified during the COVID-19 pandemic period. We argue that these findings have significant implications for the Indonesian financial authorities’ open banking strategy and for the future of the Indonesian financial system in general

Financial Literacy among the Millennial Generation: Relationships between Knowledge, Skills, Attitude, and Behavior

This study aims to determine the level of financial literacy among the millennial generation and to examine the correlation of their financial knowledge, financial attitude, and financial skills with their financial behavior. Multiple choice questions were used to measure financial knowledge with results grouped into three categories: low, moderate, and high. Financial attitude, financial skills, and financial behavior were also grouped using the quartile method into three categories: poor, fair, and good. Chi-squared analysis was used to test the hypotheses, with correspondence analysis conducted to identify the characteristics of the millennial generation and to graphically illustrate the gap. Regarding financial attitude, financial skills, and financial behavior, the proportions of respondents in the \u27fair\u27 category, were 70.6%, 66.5%, and 72.2%, respectively. Significant relationships were found not only between financial attitude and financial management behavior, but also between financial skills and financial management behavior. However, the relationship was not significant between financial knowledge and financial behavior

Determinants of business models innovation of Islamic bank in Indonesia

Purpose: This study analyzes the effect of dynamic capabilities, customer knowledge management, and religiosity each as a determinant that drives all components and systems in an organization to run business model innovations, to improve business performance to be healthy and to grow sustainably. Design/Methodology/Approach: The quantitative, descriptive and explanatory analysis was taken by using the SEM-PLS method. Research data were collected through questionnaires with participants of this study being senior managers of Indonesia Islamic banks. Findings: The results show that religiosity variable together with the Customer Knowledge Management and Dynamic Capability variables simultaneously and partially through business model innovations are proved to influence business performance. Religiosity variables are positive and significant determinants of business model innovation. Religiosity, Customer Knowledge Management, and Dynamic Capability do not directly influence business performance. Practical Implications: The results show that the religiosity variable, alongside Customer Knowledge Management and Dynamic Capability variables simultaneously through business model innovations influences business performance and they can be used by the top management to improve performance. Originality/Value: The study implies a recommendation for Islamic banks to allocate enough resources and invest in improving learning capabilities, building tools and methodologies to find out customer needs in depth.peer-reviewe

Financial Development, Economic Growth, and Environmental Degradation Nexus in ASIAN Emerging Markets

Environmental degradation is one of the major problems in the world recently and one of the United Nations’ (UN) sustainable development goals (SDGs). Emerging markets countries that have become major players in the global economy and the main source of world economic growth have great potential to contribute the environmental degradation due to increased economic activities. This paper investigates the impact of financial development and economic growth on environmental degradation in Asian emerging markets. A panel environmental degradation model using financial development from banking sector and capital market sector, economic growth, Foreign Direct Investment (FDI), and urbanization variables that are major determinants of CO2 emission as a proxy of environmental degradation. The periods considered were 1980 – 2018 for banking model, and 1996 – 2018 for financial sector model (banking sector and capital market sector). A panel data approach applied such as cross-section dependence, panel unit root, panel cointegration, Fully Modified OLS (FMOLS) and Dynamic Ordinary Least Square (DOLS). The empirical finding revealed that in Asian emerging markets there is positively long-term relationship between financial development from banking model with environmental degradation. Nevertheless, we do not find any long-term relationship between financial development from financial sector model with environmental degradation. Moreover, the quadratic negative signed for economic growth showed the existence of Environmental Kuznets Curve (EKC)

The Effect of Inflation Rate, Exchange Rate, The Certificate of Bank Indonesia (SBI) Interest Rate and Sharia Stock Trading Volume on Sharia Stock Performance in Companies Listed on the Indonesian Sharia Stock Index (ISSI)

This study aims to determine and analyze the effect of the inflation rate, exchange rate, SBI interest rate and Sharia stock trading volume on the performance of Sharia stocks in companies listed on the Indonesian Sharia Stock Index. In this study, a research model was created using Sharia stock performance as the dependent variable. While the independent variables are the inflation rate, exchange rate, certificate of Bank Indonesia (SBI) interest rate and Sharia stock trading volume. The research method used is quantitative research method with multiple regression models using panel data. The research object employs Sharia stocks from companies that are in the Indonesian Sharia Stock Index (ISSI), namely Sharia stocks that are listed on the stock exchange, active, and meet the requirements of the Capital Market in Indonesia during the period January 2014 to December 2018. The object of this research includes all 392 companies using purposive sampling technique. Further, the samples used are 278 companies that meet the requirements. Based on the results, it shows that the inflation rate has no effect on the performance of Sharia stocks. Next, the exchange rate and the SBI interest rate have a significant negative effect on the performance of Sharia stocks, while the trading volume of Sharia stocks has no effect on the performance of Sharia stocks

Risk and Competition in the Indonesian Private Banking Market: An Asymmetric Rivalry Within and Between Strategic Groups

This paper tests the interrelationships among risk, competition, and efficiency in the Indonesian private banking industry between 2014 and 2018. We examines asymmetric rivalry within and between strategic groups defined according to the size of their members. We hypothesize that, owing to several forms of group-level effects, including price difference and efficiency, strategic groups comprising large firms expect to experience a large amount of retaliation from firms within their group and accommodation from the group comprising smaller firms. The competition of private banking is dominated by incumbent firm. The risk and efficiency evolved over time enjoyed by incumbent with fat cat taxonomy and quiet life hypothesis. The entrant play lean and hungry strategy in different market segment within strategic group, whereas foreign bank deter incumbent with higher prices to enter between strategic group. The competition of private banking in Indonesia dominated by risk appetite and fragmented marke