THE IMPACT OF BOARD DIVERSITY AND THE MODERATION EFFECT OF COVID-19 PANDEMIC ON FREE CASH FLOW

In this study, we propose pandemic Covid-19 as moderating effect on the role of board diversity in enhancing the allocation of free cash flow. The board diversity variables are examined using least squares regression for panel data by exploiting the variables to board gender diversity, board member affiliation, board specific skills, and board size variables for an observation of 279 Indonesian listed firms over the period 2015–2021. We found that the presence of female gender on the board, the presence of board members who have either an industry specific background or a strong financial background, and enough board members deter the opportunistic conduct of managers and likely to reduce excess funds through dividend pay-outs. The results demonstrate that a diverse board reduces agency conflicts and enhances resource allocation supporting governance practices. During the Covid-19 pandemic, the presence of female gender in the board, the presence of boards member with other corporate affiliations, and the adequacy of board size proved to provide more effective supervision of the company's cash flow allocation. The findings are beneficial to policymakers since this explains the significance of implementing measures to enhance the efficacy of the board's role by instituting a diversity requirement

The Impact of Operational and Financial Hedging to the Airline Operating Performance

The airline is a low-profit margin and high competition industry. Increasing competition makes airline unable to easily charge their costs to customers and raise their fare,  so that airlines have a narrow profit margin. One of the major costs in the airline industry is jet-fuel cost. International Air Transport Association (IATA), predict that total global fuel cost for period 2019 will rise to USD 200 billion from about USD 180 billion in 2018. In average, Jet fuel will contribute 24.2 percent of total 2019 Airline’s operating cost (IATA [1]). Like most of commodities, jet-fuel price is highly volatile which encourages companies to engage in hedging activities. This paper examines the impact of operational and financial hedging to airline operating performance. We perform an empirical study by using the airline data from 2013 to 2017. To test the impact of hedging in airline operating performance, we regress the operating cost to revenue ratio, operational hedging, financial hedging and other control variables. This study found that financial derivative hedge can reduce the dollar needed to generate airline revenue, while operational hedging increase it. Keywords: Fuel Hedging, Operational Hedging, Financial Hedging, Airline Performanc

How open innovation strategy and effectuation within platform ecosystem can foster innovation performance: Evidence from digital multi-sided platform startups

This article explores how effectuation approaches – entrepreneurial action that deals with a set of means as given and focuses on selecting between possible effects that can be created with that set of means – contribute to digital Multi-Sided Platform (MSP) startups significant growth. The study integrates effectuation theory with an open innovation strategy within the platform ecosystem to understand the innovation process under resource constraint, limited knowledge, and uncertainty. Our inductive multiple-case study findings from three leading digital MSP startups show how their founding team uses the knowledge, ideas, and resources from external parties within the platform ecosystem, including agents, user communities, and supporting partner firms, along with means from the entrepreneurs’ background, in the beginning to produce high growth innovation outcomes. Platform-based entrepreneurship becomes the integrating point of effectuation theory from entrepreneurship research and open innovation strategy through strategic management research. The bridge for these two areas suggests implications for platform-based entrepreneurship research in strategic entrepreneurship

The SMEs Funding Decisions through the Islamic Equity Crowdfunding Platform

Islamic Equity Crowdfunding is currently an alternative sharia-based financing for SMEs. In Indonesia, the Islamic Equity Crowdfunding platform began to appear in 2021, and has been growing until now. The purpose of this study is to analyze the factors that influence the funding decision of SMEs in the Halal Food Industry through the Islamic Equity Crowdfunding platform. Data was collected from SMEs in Indonesia by surveying 200 respondents, namely businesses in halal food. In this study the data obtained will be analyzed using the partial least squares technique which refers to the theory of planned behavior. The results showed that the decision of SMEs in seeking funding through Islamic Equity Crowdfunding was influenced by Subjective Norms, Perceived Behavioral Control, Product Knowledge, and Religiosity, but Intention was not influenced by Attitude.   &nbsp

KINERJA PENGELOLAAN DANA PADA PASAR MODAL INDONESIA

The mutual fund is a fast growing, flexible and sizely attainable product, hence make it as favourable choice for the investors. As in other developing countries, however, the management of the fund invested in mutual fund is done by pointed fund manager. This paper raises and answers the question of how efficient the fund management is. This paper ustilizes the decomposition return model on the monthly data set from 2002-2006 in Indonesia. The model derived, enable us to trace and decompose the management performance into (i) the allocation policy skill, (ii) the security selection skill and (iii) the market timing strategy or the tactical asset allocation abilty. The model estimation result shows significant management capabilities on allocating the fund into suitable asset class. We record that the best asset allocation policy was on February 2002, June 2004, August 2004 and February 2006. Inline with this, another result shows the negatif contribution of the short term-tactical asset allocation as conformed by several previous studies; Treynor-Mazuy (1996), Wardhani (2003), and Henriksson (1984) among others. There is an exception for February 2006 where a successful market timing strategy contributed an additional 7.34% return. The security selection strategy is confirmed to have a positive and significant impact on the mutual fund performance. During the observation period, the best security selection strategy was achieved on February, March and July 2002, September 2003, and March, October, and December 2005. For these certain period, the security selection activities gave more than 2% additional monthly return. The policy implication is straightforward; a more intensively monitoring on the implementation of the planned asset allocation to give a safer financial investment environment for the investors. This paper also suggest the investment manager to provide a sufficient information about the portfolio’s risk profile. Our quantitative description has shown a large varieties both on return and risk across the mutual fund manager showing their varied risk taking behaviour, on which the investor has a right to know. JEL Classification: H54, G11, G31, O16 Keywords: Mutual fund, asset allocation, security selection, market timing, period specific estimation, financial investmen

Sustaining the development of MSEs in Indonesia: the moderating effects of the environment

MSEs contribute much to the Indonesian economy and play a crucial role in achieving Sustainable Development Goals (SDGs) Unfortunately, MSEs still have limited access to finance. Financing access (SDGs’ issue), support from the government (environmental aspect), and entrepreneurial traits (inside the MSEs) are central for MSEs’ sustainability. This research investigates the role of a business environment built by the government to ease financial constraints and support self-efficacy in MSEs’ sustainable growth. This research applies the Structural Equation Model method to 750 respondents. Initially the direct factors are estimated and then a moderating factor is added. The results find that financial constraints MSEs’ experience limits the their sustainability, whereas self-efficacy enhances it. Although MSEs possess strong entrepreneurial characteristics as the basis for their growth, financing access remains a burden. The research confirms that the business environment created by the government is an effective strategy to facilitate MSEs’ sustainability. However, MSEs’ sustainability cannot be improved merely by government schemes but must be supported by the financial and banking sectors

Ambiguity towards Multiple Historical Performance Information Signals: Evidence from Indonesian Open-Ended Mutual Fund Investors

This study focuses on the behavior of open-ended mutual fund investors when encountered with multiple information signals of mutual fund&rsquo;s historical performance. The behavior of investors can be reflected on their decision to subscribe or redeem their funds from mutual funds. Moreover, we observe the presence of ambiguity within investors due to multiple information signals, and also their reaction towards it. Our finding shows that open-ended mutual fund investors do not only have sensitivity towards past performance information signals, but also have additional sensitivity towards the ambiguity of multiple information signals. Because of the presence of ambiguity, investors give more consideration to negative information signals and the worst information signal in their investment decisions. Normal 0 false false false EN-US X-NONE X-NONE <!--[endif] --

Return Spillover of Asian REITs

This research examines the relationship and direction of return spillover of Asian REITs, between REITs and local stock markets, and its effect towards REIT returns. The samples are from Hong Kong, Japan, South Korea, Malaysia, Singapore, Thailand, and Taiwan. This research uses Diebold and Yilmaz&rsquo;s technique to measure the relationship and direction of return spillover between asset classes. The method also uses OLS regression to test the effects of return spillover on REIT returns. The results show that connectedness between Asian markets is low. Japan and Singapore are the strongest influencers. Low connectedness was also found between REITs and the local stock market. In general, net return spillover from Asian REIT markets significantly influence REITs&rsquo; return. The results imply that the growth of REIT markets depends on the attractiveness of capital markets in a country. Regulators in developing countries need to improve the capital market environment to enable REIT markets to flourish

Ambiguity towards Multiple Historical Performance Information Signals: Evidence from Indonesian Open-Ended Mutual Fund Investors

This study focuses on the behavior of open-ended mutual fund investors when encountered with multiple information signals of mutual fund&rsquo;s historical performance. The behavior of investors can be reflected on their decision to subscribe or redeem their funds from mutual funds. Moreover, we observe the presence of ambiguity within investors due to multiple information signals, and also their reaction towards it. Our finding shows that open-ended mutual fund investors do not only have sensitivity towards past performance information signals, but also have additional sensitivity towards the ambiguity of multiple information signals. Because of the presence of ambiguity, investors give more consideration to negative information signals and the worst information signal in their investment decisions