Pub Date : 2023-11-30DOI: 10.22219/jibe.v7i01.28146
Sukesi Sukesi
Conducted with a sample size of 120, the research employed structural equation modeling for analysis. The findings revealed several influential factors, including perceived trust, perceived value, perceived risk, and satisfaction, impacting behavioral intentions among Indonesian online shoppers. Notably, satisfaction emerged as a mediating variable in the relationship between perceived trust, perceived value, perceived risk, and behavioral intentions. The implications suggest that businesses and online retailers seeking to enhance customer satisfaction and drive desired behaviors should consider strategies aligned with these influential factors. However, it is crucial for both researchers and practitioners to acknowledge the study's limitations. Further research endeavors are encouraged to broaden and refine our understanding of consumer behavior in the Indonesian online shopping landscape.
{"title":"Determinant of online shopping intention: Satisfaction as an intermediary","authors":"Sukesi Sukesi","doi":"10.22219/jibe.v7i01.28146","DOIUrl":"https://doi.org/10.22219/jibe.v7i01.28146","url":null,"abstract":"Conducted with a sample size of 120, the research employed structural equation modeling for analysis. The findings revealed several influential factors, including perceived trust, perceived value, perceived risk, and satisfaction, impacting behavioral intentions among Indonesian online shoppers. Notably, satisfaction emerged as a mediating variable in the relationship between perceived trust, perceived value, perceived risk, and behavioral intentions. The implications suggest that businesses and online retailers seeking to enhance customer satisfaction and drive desired behaviors should consider strategies aligned with these influential factors. However, it is crucial for both researchers and practitioners to acknowledge the study's limitations. Further research endeavors are encouraged to broaden and refine our understanding of consumer behavior in the Indonesian online shopping landscape.","PeriodicalId":363845,"journal":{"name":"Journal of Innovation in Business and Economics","volume":"22 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139197911","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-11-30DOI: 10.22219/jibe.v7i02.26424
Topi Issakainen
The purpose of this research is to study the possibility of combining quantitative clustering of stocks and value investing. The feasibility of this approach is tested using Finnish market data from the period 2005 to 2021. The benchmark index used in this research is the OMX Helsinki Growth Index. The strategy is based on the combination of P/E, P/CF, and P/B ratios, which serve as the basis for the k-means algorithm. The data is pre-processed by removing stocks that have not generated positive earnings and cash flow during the previous 12 months. The k-means algorithm assigns stocks to clusters, and the cluster with the lowest financial ratios is chosen as the value portfolio. The research also includes a sensitivity analysis of value portfolios, where the initial number of clusters in the clustering phase ranges from three to ten. Returns of different value portfolios are compared to each other and the benchmark index. The quality of results is evaluated using the Sharpe ratio and Jensen's alpha. According to the findings, the value portfolio constructed using nine clusters generated the highest risk-adjusted return, with an annual return of 30.27% over the 2005 to 2021 period. Furthermore, the best-performing value portfolio from 2005 to 2017 was compared to the benchmark index from 2018 to 2021. The value portfolio achieved an annual return of 26.05% during the 2018-2021 period, while the corresponding return of the benchmark index was 11.74%.
{"title":"Clustering-based value investing strategy in the Helsinki Stock Exchange: k-means algorithm","authors":"Topi Issakainen","doi":"10.22219/jibe.v7i02.26424","DOIUrl":"https://doi.org/10.22219/jibe.v7i02.26424","url":null,"abstract":"The purpose of this research is to study the possibility of combining quantitative clustering of stocks and value investing. The feasibility of this approach is tested using Finnish market data from the period 2005 to 2021. The benchmark index used in this research is the OMX Helsinki Growth Index. The strategy is based on the combination of P/E, P/CF, and P/B ratios, which serve as the basis for the k-means algorithm. The data is pre-processed by removing stocks that have not generated positive earnings and cash flow during the previous 12 months. The k-means algorithm assigns stocks to clusters, and the cluster with the lowest financial ratios is chosen as the value portfolio. The research also includes a sensitivity analysis of value portfolios, where the initial number of clusters in the clustering phase ranges from three to ten. Returns of different value portfolios are compared to each other and the benchmark index. The quality of results is evaluated using the Sharpe ratio and Jensen's alpha. According to the findings, the value portfolio constructed using nine clusters generated the highest risk-adjusted return, with an annual return of 30.27% over the 2005 to 2021 period. Furthermore, the best-performing value portfolio from 2005 to 2017 was compared to the benchmark index from 2018 to 2021. The value portfolio achieved an annual return of 26.05% during the 2018-2021 period, while the corresponding return of the benchmark index was 11.74%.","PeriodicalId":363845,"journal":{"name":"Journal of Innovation in Business and Economics","volume":"43 5","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139206848","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-11-30DOI: 10.22219/jibe.v7i02.28160
Mochamad Rofik, Ayu Dwidyah Rini, David Kaluge, Rafael Alfarado
This study aims to examine output dynamics in East Java using the Real Business Cycle (RBC) model. We constructed an RBC model with two stochastic shocks originating from the demand and supply sides. The RBC model in this study shows that output dynamics, as the driver of the business cycle in East Java, are mostly caused by exogenous shocks originating from the demand side. The model also shows that some variables such as wage levels, consumption, and capital accumulation exhibit inertia patterns in response to shocks. Therefore, after releasing the assumptions underlying the RBC model and accommodating fiscal and monetary policies, we argue that the response time lag shown by some of these variables can be advantageous for authorities to mitigate the impact of shocks and determine policies. Additionally, two main factors that determine policy effectiveness are understanding the sources of shocks and the timing of policy implementation.
{"title":"Real Business Cycle: Stochastic driving force decomposition of output dynamics in East Java","authors":"Mochamad Rofik, Ayu Dwidyah Rini, David Kaluge, Rafael Alfarado","doi":"10.22219/jibe.v7i02.28160","DOIUrl":"https://doi.org/10.22219/jibe.v7i02.28160","url":null,"abstract":"This study aims to examine output dynamics in East Java using the Real Business Cycle (RBC) model. We constructed an RBC model with two stochastic shocks originating from the demand and supply sides. The RBC model in this study shows that output dynamics, as the driver of the business cycle in East Java, are mostly caused by exogenous shocks originating from the demand side. The model also shows that some variables such as wage levels, consumption, and capital accumulation exhibit inertia patterns in response to shocks. Therefore, after releasing the assumptions underlying the RBC model and accommodating fiscal and monetary policies, we argue that the response time lag shown by some of these variables can be advantageous for authorities to mitigate the impact of shocks and determine policies. Additionally, two main factors that determine policy effectiveness are understanding the sources of shocks and the timing of policy implementation.","PeriodicalId":363845,"journal":{"name":"Journal of Innovation in Business and Economics","volume":"165 ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139203043","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-11-30DOI: 10.22219/jibe.v7i02.25423
Aldila Caesarina, Alfina Alfina, Aditya Narendra Wardhana, Lisa Risfana Sari
This research investigates the complex relationship between Problematic Internet Use (PIU) and various psychological aspects, including Psychology and Mental Health (PMH), Fear of Missing Out (FOMO), and Social Media Fatigue (SMF). Furthermore, this study was designed to test various psychological conditions regarding the Desire to Disconnect (DD), which ultimately results in the Joy of Missing Out (JOMO). Through a structural equation model involving 310 college student respondents, this study found that PIU is associated with suffering in PMH, heightened FOMO, increased SMF, and that FOMO exacerbates SMF. Moreover, SMF drives DD, and ultimately, DD causes JOMO. In response to these findings, we argue that achieving a balance in marketing between FOMO-based online strategies and JOMO-based offline strategies needs to be a priority for sustainable brand marketing. Additionally, it is crucial to consider ethical issues in content moderation aligned with FOMO to safeguard consumers' psychological well-being.
{"title":"Conquering fear and embracing joy in shaping marketing strategy","authors":"Aldila Caesarina, Alfina Alfina, Aditya Narendra Wardhana, Lisa Risfana Sari","doi":"10.22219/jibe.v7i02.25423","DOIUrl":"https://doi.org/10.22219/jibe.v7i02.25423","url":null,"abstract":"This research investigates the complex relationship between Problematic Internet Use (PIU) and various psychological aspects, including Psychology and Mental Health (PMH), Fear of Missing Out (FOMO), and Social Media Fatigue (SMF). Furthermore, this study was designed to test various psychological conditions regarding the Desire to Disconnect (DD), which ultimately results in the Joy of Missing Out (JOMO). Through a structural equation model involving 310 college student respondents, this study found that PIU is associated with suffering in PMH, heightened FOMO, increased SMF, and that FOMO exacerbates SMF. Moreover, SMF drives DD, and ultimately, DD causes JOMO. In response to these findings, we argue that achieving a balance in marketing between FOMO-based online strategies and JOMO-based offline strategies needs to be a priority for sustainable brand marketing. Additionally, it is crucial to consider ethical issues in content moderation aligned with FOMO to safeguard consumers' psychological well-being.","PeriodicalId":363845,"journal":{"name":"Journal of Innovation in Business and Economics","volume":"192 ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139204592","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-11-30DOI: 10.22219/jibe.v7i02.26288
Margherita Mori
This study endeavors to establish a conceptual framework for examining the cross-cultural issues arising from the enduring financial factors contributing to the urban-rural divide. Central to this framework is the notable disparity in available financial services between urban and rural areas. This discrepancy draws attention to the ongoing necessity to combat financial exclusion within agricultural communities. Broadly speaking, it underscores the significance of rural finance, a subset within the financial realm, as a potential means to mitigate the observed polarization. Key factors to be underscored include ongoing technological advancements driving progress in the financial sector and instilling hope in digitization as a catalyst for fostering inclusive finance.
{"title":"Urban-rural polarization: Financial implications, challenges, and opportunities","authors":"Margherita Mori","doi":"10.22219/jibe.v7i02.26288","DOIUrl":"https://doi.org/10.22219/jibe.v7i02.26288","url":null,"abstract":"This study endeavors to establish a conceptual framework for examining the cross-cultural issues arising from the enduring financial factors contributing to the urban-rural divide. Central to this framework is the notable disparity in available financial services between urban and rural areas. This discrepancy draws attention to the ongoing necessity to combat financial exclusion within agricultural communities. Broadly speaking, it underscores the significance of rural finance, a subset within the financial realm, as a potential means to mitigate the observed polarization. Key factors to be underscored include ongoing technological advancements driving progress in the financial sector and instilling hope in digitization as a catalyst for fostering inclusive finance.","PeriodicalId":363845,"journal":{"name":"Journal of Innovation in Business and Economics","volume":"33 1-2","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139205434","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-11-30DOI: 10.22219/jibe.v7i02.28227
Insi Fitriani, Anna Amalyah Agus
This research aims to examine the correlation between social media sentiment and the Consumer Confidence Index (CCI) as well as Gross Domestic Product (GDP) in Indonesia. Data were collected through web scraping from Twitter (now also known as X) spanning from 2019 to 2022 on a monthly basis. Using Pearson and Kendall’s Tau correlation tests, the study found that the correlation between Twitter sentiment and the CCI is not significant. However, there is a significant correlation between Twitter sentiment from news accounts and GDP The findings indicate that the views and perceptions expressed in social media sentiment, particularly from news accounts on Twitter, could serve as an initial indicator of Indonesia's GDP.
本研究旨在探讨印度尼西亚社交媒体情绪与消费者信心指数（CCI）和国内生产总值（GDP）之间的相关性。数据是通过网络从 Twitter（现在也称为 X）上按月收集的，时间跨度为 2019 年至 2022 年。通过皮尔逊和肯德尔头相关性检验，研究发现推特情绪与 CCI 之间的相关性并不显著。研究结果表明，社交媒体情绪（尤其是推特上的新闻账户）所表达的观点和看法可作为印尼国内生产总值的初步指标。
{"title":"Tweeting the economy: Analyzing social media sentiments and macroeconomic indicators","authors":"Insi Fitriani, Anna Amalyah Agus","doi":"10.22219/jibe.v7i02.28227","DOIUrl":"https://doi.org/10.22219/jibe.v7i02.28227","url":null,"abstract":"This research aims to examine the correlation between social media sentiment and the Consumer Confidence Index (CCI) as well as Gross Domestic Product (GDP) in Indonesia. Data were collected through web scraping from Twitter (now also known as X) spanning from 2019 to 2022 on a monthly basis. Using Pearson and Kendall’s Tau correlation tests, the study found that the correlation between Twitter sentiment and the CCI is not significant. However, there is a significant correlation between Twitter sentiment from news accounts and GDP The findings indicate that the views and perceptions expressed in social media sentiment, particularly from news accounts on Twitter, could serve as an initial indicator of Indonesia's GDP.","PeriodicalId":363845,"journal":{"name":"Journal of Innovation in Business and Economics","volume":"50 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139208311","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-11-17DOI: 10.22219/jibe.v7i01.28221
Enni Sustiyatik
This research delves into the connection between transformational leadership, organizational commitment, and lecturer performance within the realm of higher education. Its primary objective is to comprehend how transformational leadership and organizational commitment influence lecturers and their overall effectiveness. The study encompassed 178 lecturers from Kadiri University. Data collection involved the administration of a well-structured questionnaire, and subsequent analysis was conducted using multiple linear regression techniques. The results underscore a robust and positive association between transformational leadership and lecturer performance. Furthermore, the role of organizational commitment in lecturer performance is noteworthy. These findings hold pragmatic significance for educational institutions, highlighting the imperative of cultivating transformational leadership and organizational commitment to augment faculty performance and cultivate dynamic learning environments.
{"title":"The dual pillars of academic excellence: Transformational leadership and organizational commitment","authors":"Enni Sustiyatik","doi":"10.22219/jibe.v7i01.28221","DOIUrl":"https://doi.org/10.22219/jibe.v7i01.28221","url":null,"abstract":"This research delves into the connection between transformational leadership, organizational commitment, and lecturer performance within the realm of higher education. Its primary objective is to comprehend how transformational leadership and organizational commitment influence lecturers and their overall effectiveness. The study encompassed 178 lecturers from Kadiri University. Data collection involved the administration of a well-structured questionnaire, and subsequent analysis was conducted using multiple linear regression techniques. The results underscore a robust and positive association between transformational leadership and lecturer performance. Furthermore, the role of organizational commitment in lecturer performance is noteworthy. These findings hold pragmatic significance for educational institutions, highlighting the imperative of cultivating transformational leadership and organizational commitment to augment faculty performance and cultivate dynamic learning environments.","PeriodicalId":363845,"journal":{"name":"Journal of Innovation in Business and Economics","volume":"143 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-11-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139265922","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The pervasive influence of information technology across various life sectors, particularly in the business realm, has prompted this study to investigate the impact of technology readiness on entrepreneurial intentions within a student context. A purposive sampling method was employed to select a sample comprising 213 college students, and Structural Equation Modeling (SEM) was utilized to assess the interrelationships among the study's constructed variables. The findings underscore the significant impact of technology readiness on attitudes, which, in turn, plays a pivotal role in shaping entrepreneurial intentions. Furthermore, the research highlights the influential roles of subjective norms and perceived behavioral control in the formation of entrepreneurial intentions. Conversely, results from the Multi-Group Analysis (MGA) do not support the gender variable as a moderating factor. However, a noteworthy revelation emerges from the bootstrapping analysis, unveiling gender-based differences in the influence of subjective norm variables on entrepreneurial intentions when comparing male and female groups.
{"title":"Navigating entrepreneurial terrain: The role of technology readiness and gender in shaping intentions","authors":"Haryanto Haryonto, Retno Tanding Suryandari, Catur Sugiarto, Pram Suryanadi, Tetuko Rawidyo Putro, Christiyaningsih Budiwati","doi":"10.22219/jibe.v7i01.28154","DOIUrl":"https://doi.org/10.22219/jibe.v7i01.28154","url":null,"abstract":"The pervasive influence of information technology across various life sectors, particularly in the business realm, has prompted this study to investigate the impact of technology readiness on entrepreneurial intentions within a student context. A purposive sampling method was employed to select a sample comprising 213 college students, and Structural Equation Modeling (SEM) was utilized to assess the interrelationships among the study's constructed variables. The findings underscore the significant impact of technology readiness on attitudes, which, in turn, plays a pivotal role in shaping entrepreneurial intentions. Furthermore, the research highlights the influential roles of subjective norms and perceived behavioral control in the formation of entrepreneurial intentions. Conversely, results from the Multi-Group Analysis (MGA) do not support the gender variable as a moderating factor. However, a noteworthy revelation emerges from the bootstrapping analysis, unveiling gender-based differences in the influence of subjective norm variables on entrepreneurial intentions when comparing male and female groups.","PeriodicalId":363845,"journal":{"name":"Journal of Innovation in Business and Economics","volume":"6 9","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-11-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136229350","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This research explores the complex relationship between Sharia financial literacy, financial attitudes, financial satisfaction, and investment decisions in the context of Islamic economics. Utilizing path analysis with 369 civil servant respondents, this study reveals that both Sharia financial literacy and financial attitudes positively impact financial satisfaction. This implies that individuals possessing a strong understanding of Islamic finance and a positive attitude toward their finances tend to experience higher levels of financial satisfaction. Nevertheless, variations in their direct influence on investment decisions do surface. Sharia financial literacy exhibits a relatively modest direct influence on investment decisions, while financial attitudes exert a strong direct influence on investment decisions. Despite the modest direct impact of Sharia financial literacy on investment decisions, its indirect influence remains substantial.
{"title":"Sharia financial literacy: Decoding the nexus of civil Servants' investment choices","authors":"Nisa Mutiara, Eka Askafi, Ahmad Yani, Fahmi Aquinas, Wawan Herry Setyawan","doi":"10.22219/jibe.v7i01.29022","DOIUrl":"https://doi.org/10.22219/jibe.v7i01.29022","url":null,"abstract":"This research explores the complex relationship between Sharia financial literacy, financial attitudes, financial satisfaction, and investment decisions in the context of Islamic economics. Utilizing path analysis with 369 civil servant respondents, this study reveals that both Sharia financial literacy and financial attitudes positively impact financial satisfaction. This implies that individuals possessing a strong understanding of Islamic finance and a positive attitude toward their finances tend to experience higher levels of financial satisfaction. Nevertheless, variations in their direct influence on investment decisions do surface. Sharia financial literacy exhibits a relatively modest direct influence on investment decisions, while financial attitudes exert a strong direct influence on investment decisions. Despite the modest direct impact of Sharia financial literacy on investment decisions, its indirect influence remains substantial.","PeriodicalId":363845,"journal":{"name":"Journal of Innovation in Business and Economics","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135367168","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In the past decade, the profits obtained by banks in Indonesia have generally tended to increase, except during the pandemic. However, the number of banking business actors in Indonesia has continued to decline, indicating that the banking structure is becoming more concentrated and potentially leading to an oligopoly. Therefore, the purpose of this study is to determine whether the increasingly concentrated banking market structure or weak competition has a significant impact on the growing profitability of banks in Indonesia. If this hypothesis is proven true, it would suggest that banking, as a financial intermediary, contributes to higher costs for economic development, particularly within financial markets. In this study, the Lerner index is employed to measure the level of concentration or competition among banks. Subsequently, the Treatment Effect Model is utilized to estimate the extent of the impact of competition levels on profitability within the banking sector. The findings of the study reveal two key points. Firstly, the reduction in the number of banking players has been accompanied by increased competition among banks in Indonesia, particularly evident after 2016. Secondly, a higher level of concentration or reduced competition corresponds to increased opportunities for banking profitability. Consequently, there are indications that the decrease in the number of banking business actors in Indonesia is correlated with heightened competition, suggesting improved efficiency in banking management. This phenomenon could elucidate the reason why profitability in the banking sector appears to be on the rise despite a decrease in the number of banking players.
{"title":"Analysis of banking competition in Indonesia and its impact on profitability: Structure conduct performance (SCP) approach","authors":"Dwi Budi Santoso, Eddy Suprapto, Rinny Apriliany Zakaria, Husniyah Ayu Kusumaningrum, Hidsal Jamil","doi":"10.22219/jibe.v7i01.27156","DOIUrl":"https://doi.org/10.22219/jibe.v7i01.27156","url":null,"abstract":"In the past decade, the profits obtained by banks in Indonesia have generally tended to increase, except during the pandemic. However, the number of banking business actors in Indonesia has continued to decline, indicating that the banking structure is becoming more concentrated and potentially leading to an oligopoly. Therefore, the purpose of this study is to determine whether the increasingly concentrated banking market structure or weak competition has a significant impact on the growing profitability of banks in Indonesia. If this hypothesis is proven true, it would suggest that banking, as a financial intermediary, contributes to higher costs for economic development, particularly within financial markets. In this study, the Lerner index is employed to measure the level of concentration or competition among banks. Subsequently, the Treatment Effect Model is utilized to estimate the extent of the impact of competition levels on profitability within the banking sector. The findings of the study reveal two key points. Firstly, the reduction in the number of banking players has been accompanied by increased competition among banks in Indonesia, particularly evident after 2016. Secondly, a higher level of concentration or reduced competition corresponds to increased opportunities for banking profitability. Consequently, there are indications that the decrease in the number of banking business actors in Indonesia is correlated with heightened competition, suggesting improved efficiency in banking management. This phenomenon could elucidate the reason why profitability in the banking sector appears to be on the rise despite a decrease in the number of banking players.","PeriodicalId":363845,"journal":{"name":"Journal of Innovation in Business and Economics","volume":"137 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135886998","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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