Armida Salsiah Alisjahbana, Maman Setiawan, Nury Effendi, Teguh Santoso and Baruna Hadibrata
This study investigates the effect of digital technology adoption on labor demand in the Indonesian banking sector.
Abstract
Purpose
This study investigates the effect of digital technology adoption on labor demand in the Indonesian banking sector.
Design/methodology/approach
This research uses bank-level survey data obtained from the Indonesia Financial Service Authority (OJK) for the period 2010–2017 using semiannual data. This research applies a panel data method using a fixed effect model.
Findings
This study results show that technology adoption affects labor demand significantly in all Commercial Bank Based on Business Activities (BUKU) levels of banks. Technology adoption tends to be a substitute for labor in BUKU I, BUKU II and BUKU III banks in the support and business units. In addition, technology adoption complements labor only in the business unit in BUKU IV banks.
Research limitations/implications
This research uses a sample of only 40 banks at the regulatory levels of BUKU I, BUKU II, BUKU III and BUKU IV. These 40 banks account for more than 80% of the assets in the Indonesian banking sector.
Originality/value
Literature investigating the effect of the adoption of digital technology on labor demand in the banking sector is still rare in the Indonesian economy. Most of the previous research limited its area of study to the manufacturing industry. This research makes a vital contribution in measuring the adoption of digital technology and its effect on labor demand in the banking sector using the BUKU level classifications of banks.
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Maman Setiawan, Nury Effendi, Ratni Heliati and Alfi Syahrin Ario Waskito
The purpose of this paper is to investigate the technical efficiency (TE) of micro and small enterprises (MSEs) and its determinants in the Indonesian manufacturing sector…
Abstract
Purpose
The purpose of this paper is to investigate the technical efficiency (TE) of micro and small enterprises (MSEs) and its determinants in the Indonesian manufacturing sector covering comprehensive subsectors.
Design/methodology/approach
This research uses the data from the micro and small industry survey sourced from the Indonesian Bureau of Central Statistics for the period 2010–2015. The TE is estimated using data envelopment analysis (DEA) with bootstrapping approach. The TE is also estimated at the firm-level survey data, classified at the five-digit level of the International Standard Industrial Classification system. In addition, a truncated regression model is applied to estimate the effects of the determinants on the TE.
Findings
This research finds that there is a low average TE of the MSEs for the subsectors investigated. It is also found that the TE is associated with firm size, location, export orientations on domestic and world markets, firm age, level of technology, and owner education.
Originality/value
The literature investigating the TE of the MSEs and its determinants is still rare in Indonesia. Most of the previous research limited the studies for specific subsectors and/or specific small regions. Therefore, this research has a contribution in measuring the TE of the MSEs for comprehensive subsectors as well as its relation with the determinants in the Indonesian manufacturing sector. Also, the DEA with bootstrapping approach is applied to estimate the TE of the firms based on each relevant subsector, which is rare in the previous research of the Indonesian MSEs.
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Zaini Ibrahim, Nury Effendi, Budiono B. and Rudi Kurniawan
This paper aims to investigate the dynamic relationship between profit and loss sharing (PLS) financing and banking-specific variables, macroeconomic variables and religiosity in…
Abstract
Purpose
This paper aims to investigate the dynamic relationship between profit and loss sharing (PLS) financing and banking-specific variables, macroeconomic variables and religiosity in Indonesia.
Design/methodology/approach
This study used seven variables, such as PLS financing, Islamic financing rate, risk-sharing deposits, bank size, interest rate, economic growth and level of religiosity. The data used were monthly time series during the 2009–2019 period, and they used the structural vector autoregression method plus ARDL and ECM as a robustness check mechanism.
Findings
The results show that in the short term, PLS financing is more influenced by changes in the risk-sharing deposits and bank size variables. Meanwhile, analysis of variance decomposition illustrates that variations in PLS financing are more influenced by the dynamics of PLS financing itself than other variables. This finding also strengthens the characteristics of PLS financing that is immune to the influence of interest rates, and this result can strengthen the implementation of the PLS scheme as an alternative to the monetary channel in the dual banking system in Indonesia.
Practical implications
The immunity of PLS financing to changes in interest rates has implications for the management of Islamic banking risk management. Evaluation must be carried out by increasing the skills of the bankers in response to losses arising from moral hazard and asymmetric information.
Originality/value
This paper used empirical evidence to show the influence of internal and external factors toward PLS financing performance. To the best of the authors’ knowledge, the study on determinants of PLS financing is limited, particularly in the context of Indonesia.
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The government plays an important role in the financing process of small and medium enterprises (SMEs), but the current government-enterprise cooperation (GEC) mechanism cannot…
Abstract
Purpose
The government plays an important role in the financing process of small and medium enterprises (SMEs), but the current government-enterprise cooperation (GEC) mechanism cannot well solve the financing problem of SMEs. In addition, since government-enterprise cooperation is a long-term dynamic process, this study aims to explore the cooperation strategy between the government and core enterprises in supply chain finance (SCF) under the dynamic structure.
Design/methodology/approach
Considering both parties have the characteristics of disappointment aversion, our research constructs a game theory model of government subsidy and the effort of the enterprise to implement SCF based on differential game and studies different game strategies in the non-cooperative game, the Stackelberg game and the cooperative game.
Findings
Our findings show that the government subsidy can significantly spur the enterprise in the supply chain to implement SCF. We also find that the limitation of the government subsidy exists. In addition, the optimal strategy, the optimal benefit and the total benefit of the financing system formed by the government and the enterprise in the cooperative game are better than those in the non-cooperative game. Pareto optimality is achieved.
Research limitations/implications
The limitations of this paper are: (1) In theory, this paper only takes the government and enterprise as game subjects without considering other participants in the supply chain. In addition, only disappointment aversion is taken into consideration while in reality the participants often exhibit multiple behavior preferences. (2) In methodology, only the numerical solution is given through the solution algorithm and all parameters are assumed to be determined as time changes for the convenience of calculation.
Practical implications
The government can motivate enterprises in the supply chain to implement SCF by providing subsidies. However, it should be noted that excessive subsidy will make the enterprise dependent on the government and as a result, decrease the effort level to implement SCF. Thus, it is necessary for the government to keep track of the business conditions of the enterprise to make a subsidy strategy. In addition, the government can reduce the impact of disappointing aversion by making more targeted policies and taking risk management measures.
Social implications
On one hand, it is necessary for the government to keep track of the business conditions of the enterprise to make a subsidy strategy. In addition, the government can reduce the impact of their own disappointing aversion by making more targeted policies and adopting risk management measures. On the other, it is important for the enterprise to improve the regulatory mechanism and optimize the compensation structure of decision-makers to inhibit the impact of decision-makers' disappointing aversion.
Originality/value
This study is the first to investigate the mechanism of GEC in the setting of SCF based on a differential game. Furthermore, our study provides a theoretical basis for the government and enterprises to cooperate in SCF.