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The capital market has increasingly become a pivotal avenue for enterprises seeking additional capital for expansion or operational enhancements. In raising funds through an Initial Public Offering (IPO), the company must publish its risk disclosure in the prospectus. Therefore, this study aims to investigate the impact of risk disclosure on the initial return of Indonesian companies undergoing IPOs during the pandemic. Using data from 136 out of 164 companies that went public between 2020 and 2022, sourced from the Indonesian Stock Exchange and company websites, the study employs the ordinary least squares method to estimate the impact of risk disclosures on initial returns during the pandemic. The findings reveal that external and overall risk disclosures significantly influence IPO initial returns. Specifically, Indonesian investors were particularly attentive to external and overall risks when evaluating IPOs during the pandemic. This heightened concern suggests that comprehensive risk disclosure can affect investor behavior and financial outcomes for companies going public in uncertain times, highlighting the importance of transparency in risk communication to support investor decision-making and market stability.

Purpose. This study aims to empirically measure and analyze the long-run relationship and asymmetric price transmission of the rice market in Aceh Province, Indonesia. It also attempts to empirically examine and analyze the existence of the vertical price trends along the rice distribution channels both in the short term and long term. Methodology / approach. Monthly data from January 2009 to December 2019 on the prices of dry harvested rice (known as Milled Dry Grain – MDG in Indonesia) at the farm level, the prices of MDG at the rice mill level, and the retail prices of the medium- and premium-quality rice were gathered from the report of Statistics Indonesian Agency (BPS – Statistics Indonesia). The study uses a series of econometric techniques comprising cointegration, causality, and Error Correction Model (ECM) to investigate the research objectives. Results. The study found price integration between the upstream and downstream rice markets. The asymmetric price transmission existed in the short run along the rice distribution chain, including the prices of medium-quality rice and premium-quality rice. In the long term, the price of MDG at the huller level is transmitted asymmetrically to the premium-quality rice at the consumer level. A positive asymmetric price transmission is found along the rice supply chain, indicating an increase in price in the upstream market has transmitted faster to the downstream markets than the price decreases. Originality / scientific novelty. Unlike previous studies that analyzed only price integration in the rice market and the direction of price transmission separately, this study empirically investigates both price integration, price transmission, and the direction and magnitude of asymmetric price transmission in the Indonesian rice market. Specifically, this study explores the existence of price integration from upstream to downstream markets and the existence of asymmetric price transmission as well as measures the magnitude and direction of asymmetric price transmission in the rice market in Indonesia. The findings of the study enrich the existing literature and contribute insights into enhancing rice price policy from the perspective of Indonesia, the fourth largest populous country in the world. Practical value / implications. These findings show the importance for the local government to maintain symmetrical market conditions to ensure efficient rice markets in the long term. Rice traders that control the premium-quality rice market by reprocessing medium-quality rice into premium-quality rice should be closely monitored. An inefficient rice market has caused consumers to spend a large proportion of their income on rice, leaving only a little to afford other needs.

This study aims to explore and analyze the moderating effects of Islamic and cultural tourism objects on the relationship between tsunami-related sites and the image of Banda Aceh city, Indonesia as a tsunami-tourism destination. Of 29.213 tourists who visited the city in 2019, 200 of them were selected as the sample of the study using a simple random sampling technique. The primary data collected through questionnaires and interviews were then analyzed using structural equation modeling (SEM)-based moderated multiple regression techniques. The study documented that tsunamirelated sites and Islamic and cultural tourism objects have promoted the image of the city as a tsunami-tourism destination. Additionally, the cultural and Islamic tourism objects strengthened the effect of tsunami-related sites on the city image as a tsunami tourism destination. Thus, to further promote the city image as the tsunami-tourism destination, the tsunamirelated sites, Islamic and cultural tourism-related objects must be preserved and enhanced.

Purpose – This study aims to measure and analyze the mediating role of e-satisfaction on the effect of e-service quality on e-loyalty of the customers of Bank Syariah Indonesia (BSI) in Banda Aceh, Indonesia. Methodology – This study gathered the primary data by distributing questionnaires to a number of 200 BSI customers that were selected as the respondents of the study using a purposive sampling technique. A Structural Equation Modelling (SEM) technique is used to test the four proposed hypotheses. Findings – The study recorded that e-service quality has positively affected the e-satisfaction and e-loyalty of the BSI customers, respectively. E-satisfaction enjoyed by banking customers has enhanced their e-loyalty. In addition, the study documented that e-satisfaction has a partial mediating effect on the relationship between e-service quality and the BSI customers’ e-loyalty. Implications – The findings of the study suggest that to promote the customers’ e-loyalty, the BSI management should focus on improving customers’ e-satisfaction by strengthening e-service quality. Originality – This study explored the mediating role of e-satisfaction on the effect of e-service quality on e-loyalty, focusing on the users of e-banking facilities of the largest Islamic banking institution in Indonesia. Therefore, this study provides significant guidelines for the Islamic banks in maintaining and enhancing e-loyalty of customers through improving their customer satisfaction by providing a high quality of services digitally nationwide.

AbstractThe current study aims to analyze the factors influencing ASEAN economic growth and integration. Specifically, the variables of inter-regional trade, human resource development, and corruption were investigated in six lower-middle-income countries from 1996 to 2019 through Driscoll and Kraay’s, Newey and West’s, and Dumitrescu and Hurlin’s as causal analysis. The study’s results found that capital had an impact of 0.248%, labor had an impact of 0.467%, human development had 3.010%, intra-regional trade had an impact of 0.014%, and corruption control had 0.260%. Statistically, all variables have a significant effect except for inflation. Furthermore, a bidirectional found in economic growth from the capital, corruption control, and intra-trade. A unidirectional was found for economic growth between the labor force and human development. At the same time, a neutral relationship was found between inflation and economic growth. Based on these findings, strengthening the economy in the integration area needs to be done, even if it’s only trading with fellow LMIs. Besides that, there is an increasing need to increase the allocation of education and health, which stimulates productivity. The government also needs to strengthen corruption control, which is detrimental to developing nations and economic growth.

This study aims to determine the moderating role of religious philanthropy in reducing the impacts of disasters to economic problems, namely inequality, poverty, and economic growth of ASEAN-9 over the period from 2000 to 2020. By using a panel moderated regression analysis, the study found that disasters significantly contributed to higher levels of economic growth, income disparity, and poverty. In addition, philanthropy is found to have a negative moderating role in the effects of disasters on economic growth, inequality, and poverty. The findings showed an effective role of philanthropy in reducing the impacts of disasters on economic growth, income disparity, and poverty in ASEAN-9. Our findings provide an important benchmark for the formulation of government policies to mitigate disaster risks on economic problems through the enhancement of religious philanthropic institutions.

This study aims to determine the effect of household characteristics and children's living environment on child labor to reduce the likelihood of child labor occurrence. The data source of this research is Sakernas (Indonesian National Labor Force Survey) of August 2018, including school accreditation, household head gender, age, working sector, employment status, household size, dependency ratio, location, and school quality, towards the probability of child labor occurrence in Indonesia. Results suggest that the government must prioritize welfare programs for women household heads, asses the minimum age for marriage, improve education facilities, and increase parental awareness to eliminate child labor. The government needs to improve education infrastructure. This infrastructure improvement should be accompanied by the convenience of school access and its costs. The lack of education infrastructure, especialy in rural areas makes it difficult for children there to attend formal schooling.

Although the number of Islamic co-operatives' memberships only amounted to 2.51 million people (11.19%) to the total membership of co-operatives in Indonesia nationwide, but it has shown a rising trend in its membership by 76.11% over the last decade (Ministry of Co-Operatives SMEs, 2019). These figures raise an essential research question: what drives the decision of Indonesian citizens to patronage Islamic co-operatives? Specifically, this study explores pertinent determinants of decision-making made by the members to select Islamic co-operatives in Aceh, Indonesia. A number of 280 members and non-members of Islamic co-operatives were selected as the sample of the study using a purposive sampling technique. Based on the logistic multiple regression technique, the study recorded that the members' decision-making in selecting Islamic co-operatives was mainly determined by their shari'ah compliance and characteristics' uniqueness. Meanwhile, physical facilities and services quality provided by the Islamic co-operatives have insignificant effects on the people's decision-making to become the memberships of Islamic co-operatives. This empirical evidence suggested that to attract more memberships, the Islamic co-operatives should improve their shari'ah compliance and characteristics' uniqueness.

This study empirically explores the dynamic interactions between the European and Indonesian cocoa markets during the 2008 global financial crisis (GFC) and the 2011 European debt crisis (EDC) using a battery of time series approaches of cointegration and multivariate Granger causality. The study documented a long-run equilibrium between the European and Indonesian cocoa markets, implying a reciprocal relationship. However, an inefficient adjustment transmission in the Indonesian cocoa prices was recorded throughout the study. The US currency constantly influenced Indonesian cocoa prices, while cocoa markets were independent of fluctuations in world oil prices. Overall, the study recorded a different level of the speed of adjustment of short-run imbalances to long-run equilibrium in the domestic cocoa market across economic crises.

Realizing an increasing contribution of the tourism sector to global economies, this study intends to enrich the existing tourism literature by empirically exploring the short- and long-run dynamic causalities between tourism and economic growth in Indonesia over the period 1995 to 2017. For these purposes, cointegration, Fully Modified Least Squares (FMOLS), and Granger causality techniques are adopted. The study found a cointegration between tourism and economic growth, indicating the existence of a long-run relationship between the tourism sector and economic growth. In the long-run, tourism has contributed to the promotion of economic growth. Finally, both in the short- and long-run, the study found a unidirectional causal relationship running from tourism to economic growth, confirming the tourism-led growth hypothesis. To enhance Indonesia's economic growth, the tourism sector should be further promoted by making it more attractive, supported by advanced IT facilities, warm hospitality, and diversified tourism objects.

The study examines the effect of monetary policy, global uncertainty and environmental damage on the green stock market in Indonesia in the long and short term, using the Autoregressive Distributed Lag (ARDL) bound test method. The ARDL bound test results show that there is cointegration in the long term between the green stock market and monetary policy, global uncertainty and environmental damage. Empirical evidence finds that in the long term, the variables that affect the green stock market in Indonesia are monetary policy from interest rates, global uncertainty and environmental damage from carbon emissions. While in the short term the variables that affect the green stock market are interest rates without lag, lag 1, lag 2 and lag 3; global uncertainty in lag 1 and lag 2; and carbon emissions without lag and lag 1; while forest damage without lag shows a very weak effect at the 10% significance level. Coefficient also shows significant and negative sign. A deeper analysis found that there is a bidirectional causality from monetary policy to green stock markets and vice versa, and from carbon emissions to green stock markets and vice versa.

This study aims to examine the use of the momentum strategy of domestic investors who trade small order sizes on IDX. The data used in this study is intraday trade transaction data from the LQ 45 Index for March, April and May 2017 obtained from The Indonesia Capital Market Institute. The method of data analysis used is the market-adjusted model approach. The results of this study indicate that domestic investors who trade in small order sizes tend to use the momentum strategy in government and non-government stock issuers. This finding implies that when IDX is in a good performance, investors should take advantage of this condition because buying stocks that have already been performing well provides a significant short-term abnormal return.

This study contributes to the existing literature on the phenomenon of lower valume of Profit-Loss Sharing (PLS)-based products offered by Islamic banks by comprehensively discussing and analyzing the issue from the internal, external, and regulation perspectives, taking the case of PT. Bank Aceh Syariah (BAS) in Indonesia. Using a grounded theory approach, this study interviews selected informants who are knowledgeable in Islamic economics, banking, and financial theories and practices, including experts, practitioners, customers, and regulators. Viewed from three aspects, namely: internal, external, and regulation, the study found that, from the internal aspect, the problem of the low volume of PLS-based financing products is caused by six factors, namely: high risk, lack of quality and quantity of human resources, complicated handling, lack of banking product innovation, asymmetric information, and lack of socialization. Meanwhile, from the external aspects, it is caused by three factors, namely: moral hazard, lack of community's knowledge of Islamic banking products, and low demand. Finally, from the aspect of the regulation, it is caused by a lack of supportive regulation. By tackling these issues, it is believed that the Islamic bank could offer more PLS-based products that finally contribute to the prosperity of the public.

This study attempts to explore comparatively the determinants of financial performances between the conventional and Islamic banks in Indonesia. The determinants investigated in the study include liquidity, non-performing financing, capital adequacy, and operational cost. The samples of this study are three state-owned conventional banks and three Islamic banks that were selected by the purposive sampling technique. Based on the panel regression analysis, the study found that, for the conventional banks, capital adequacy, liquidity, and operational cost had significant influences on banks' performances, while the non-performing loan had an insignificant effect. On the other hand, for the Islamic banks, the liquidity, non-performing financing, and operational cost had significant influences on banks’ performance, while capital adequacy had an insignificant effect. These findings provide important implications for the respective banks to design a proper financial policy to enhance their performances by focusing on the significant determinants affecting banks' performances.

The present study empirically explores the factors influencing the decision of Muzakki (zakat payers) to pay zakat at an official institution, i.e. Baitul Mal Banda Aceh, Indonesia. The factors comprise faith, altruism, service quality, role of the zakat economy, and role of Ulama (Islamic scholars). To gather the data, 140 questionnaires were disseminated to the participants who were selected based on the purposive sampling technique. The data were further analyzed by employing a binary logistic regression. The results of this study revealed that faith, altruism, service quality, role of the zakat economy, and role of Ulama significantly and positively affected the decision of Muzakki to pay zakat at Baitul Mal. These findings imply that to attract Muzakki to pay zakat at a Baitul Mal, it not only needs to enhance relevant knowledge about the obligation to pay zakat and its benefits, but it also needs to improve the quality of services provided by the Baitul Mal. All in all, Ulama also has an important role in influencing Muzakki to pay zakat at the Baitul Mal institution.

This research explored and analyzed the determinants of productivity of the cooperatives in Indonesia. These determinants included own capital, external capital, and business volume. The aggregate data of cooperatives were at the provincial level across 33 provinces in Indonesia. The data were gathered from the report of the Kementerian Koperasi dan Usaha Kecil dan Menengah Republik Indonesia (Ministry of Cooperatives and Small and Medium Enterprises of the Republic of Indonesia) over the 2010-2015 period. The data were analyzed using the panel regression technique. The result shows that own capital and business volume have a significant positive effect on the productivity of cooperatives. However, external capital has an insignificant effect on the productivity of cooperatives. To further improve their productivity, the cooperatives should increase the capital from internal sources as well as their business volume through more diversified business activities.

The purpose of this research was to examine the determinants of Return on Assets (ROA) on the foreign exchange banks in Indonesia. The data used were the financial ratios of 27 foreign exchange banks in Indonesia in 2012-2016. The data were gathered from the published financial statements of the Indonesian foreign exchange banks. This research employed a Common Effect Model (CEM) as the most suitable panel regression model to analyze the data using the E-views statistical software. The findings indicate that from 2012 to 2016, the profitability of the exchange banks is largely determined by the Capital Adequacy Ratio (CAR), Loan to Deposit Ratio (LDR), Operating Efficiency Ratio (OER), and total debt. The findings also imply that apart from maximizing profit, it is important for the banks to abide by the regulations issued by the central bank or the Financial Services Authority in performing the banking operations. Negligence to observe the level of prudential and risk management will not only lead to profit loss, but it will also cause the failure of the banks.

Purpose – This study explores comparatively the effects of capital adequacy, non-performing loans/financing, liquidity, and operating expenses on Indonesia’s conventional and Islamic banking performances between the pre-and post-2008 Global Financial Crisis (GFC) periods. Methodology – The study selected the three respective largest conventional and Islamic banks as a sample of the study using a purposive sampling technique. The data for the pre-2008 GFC period (i.e., 2003 – 2008) and the post-2008 GFC period (i.e., 2009 – 2017) were analyzed using a panel multiple regression analysis. Findings – The study documented different influences of capital adequacy, liquidity, non-performing loans/financing, and operating expenses on conventional and Islamic banking performances between the pre- and post-2008 GFC. Research limitations – This study only investigated the banks’ characteristics as the determinants of banking performances and compared merely the effects the pre- and post-2008 GFC periods. Practical implications – To maintain and enhance their performances, the Islamic and conventional banks should adopt different financial policies between the normal and turbulent economic periods. The Islamic banks were in a better position amid the crisis, showing an urgent need for the government to further promote Islamic banks, as they could offer better solutions for economic stability. Originality – The study examined a larger number of conventional and Islamic banks over more extended and updated study periods, namely six years (i.e., 2003-2008) before the 2008 GFC and ten years (i.e., 2009-2018) after the 2018 GFC. The study is among the first attempts to comparatively analyze the determinants of Indonesia’s Islamic and conventional banking performances between the pre- and post-2008 GFC periods using the panel multiple regression analysis to arrive at more comprehensive and robust empirical evidence.

ABSTRACT - This study aims to empirically explore and analyze the effects of profitability, liquidity, solvency, and firm size on the rate of returns of Islamic stocks in Indonesia. A total of 30 companies registered in the Jakarta Islamic Index were selected as samples of the study using purposive sampling techniques during the 2013-2017 period and estimated using the panel model of Generalized Least Square (GLS). This study found evidence of a positive and significant effect of profitability on the Islamic stock returns, while liquidity, solvency, and company size were documented to insignificant in affecting the Islamic stock returns. The results of this study imply that to gain a maximum rate of returns, investors should pay attention to the profitability gained by the companies listed on the Islamic stock market. ================================================================================================== ABSTRAK – Apa yang Menentukan Tingkat Pengembalian Saham Syariah di Indonesia? Penelitian ini bertujuan untuk menguji dan menganalisis pengaruh profitabilitas, likuiditas, solvabilitas, dan ukuran perusahaan terhadap tingkat pengembalian saham syariah di Indonesia. Sebanyak 30 perusahaan yang terdaftar di Jakarta Islamic Index dipilih sebagai sampel dalam penelitian ini dengan menggunakan teknik purposive sampling selama periode 2013-2017 dan diestimasi dengan model panel Generalized Least Square. Penelitian ini menemukan bukti bahwa profitabilitas berpengaruh positif dan signifikan terhadap tingkat pengembalian saham syariah, sedangkan likuiditas, solvabilitas, dan ukuran perusahaan tidak berpengaruh signifikan terhadap tingkat pengembalian saham syariah. Hasil penelitian ini menunjukkan bahwa untuk memaksimumkan tingkat pengembalian, investor harus memperhatikan keuntungan yang diperolehi perusahaan yang terdaftar di pasar saham syariah.

Using a linear model, previous studies on the ownership concentration–firm performance nexus have produced inconsistent empirical findings and found no consensus concerning the measure of agency conflict control mechanism. Using a non-monotonic model and a combination of agency conflict control mechanisms, this study contributes to the existing literature by examining the moderating roles of additional blockholders, dividends, foreign ownership types in determining the effect of ownership concentration on performance of 580 Indonesia’s firms during the 2009–2018 period. Employing panel piecewise and moderated regression models, the study documented that the ownership concentration–firm performance relationship had followed a non-monotonic pattern, proving both monitoring and expropriation hypotheses exist for non-financial firms in Indonesia. These findings highlighted the important role of additional blockholders, dividends, foreign ownership types as moderating variables, and debt as a predictor to influence firm performance, functioning as the control mechanisms for the agency conflicts in Indonesia.

This paper explores the dominance of world Islamic stock markets of Japan, the UK, and the US over the Islamic stock market of Indonesia. Daily Islamic stock indices of the UK, the US, Japan and Indonesia over the period 2000 to 2016 are utilized in the study. Both bivariate and multivariate Granger causalities based on Vector Error Correction Model (VECM) framework are adopted to empirically identify the co-movements among these Islamic stock markets. The study found that the Islamic stock markets of Indonesia, the UK, Japan, and the US are moving towards a greater level of integration. The Japanese Islamic stock market dominantly co-moved the Indonesian Islamic stocks, as compared to the UK and the US Islamic stock markets both in the bivariate and multivariate frameworks. This further implies that any developments in the Japanese financial market have to be given more consideration by the Indonesian authority in designing policy to stabilize and promote its Islamic stock market.DOI: 10.15408/aiq.v10i2.7288

The purpose of this article is to discuss the views and opinions of contemporary Muslim scholars on organisational accountability in Islam. The paper is based on in-depth semi-structured interviews and a review of the relevant documents. Eighteen interviews with twelve Muslim scholars, two ulamas (mufti), two organisational donors, and two relevant government officers, both in Indonesia and in Malaysia were, respectively, conducted. The Muslim scholars interviewed perceived that accounting and accountability activities are not contradictory to Islamic teachings. The accountability relationship in Islam is viewed as not only fulfilling the legal requirements, but also fulfilling the relationship with God. The findings clearly indicate that a formal accountability mechanism is strongly encouraged in Islam, and financial reporting is viewed as essential in enhancing the accountability of Islamic religious organizations. Therefore, any organization dealing with community funds must demonstrate its financial accountability formally; i.e., through written reports. Thus, public or community trust in the organisation cannot replace the accountability mechanism.

This study is aimed at empirically exploring the pertinent factors, which customers and non-customer perceive as germane to their selection of Islamic bank in Aceh, Indonesia. A sample of 300 customers and non-customer of Bank Aceh Syariah were selected based on the convenience sampling technique. Using the logistic regression technique, the study documented that the customers’ selection of the banks were influenced by the factors of banks’ characteristic, services and trust, shari’ah compliance, and physical objects. Of these factors, banks’ characteristic and shari’ah compliance were found to be the most pertinent factors perceived by the customers and non-customer to their selection of Islamic bank in Aceh, Indonesia. These findings imply that to attract more customers, the Islamic bank should enhance their unique characteristics and products’ compliance.DOI:10.15408/aiq.v8i2.3139

The concept “credibility” has become significant attention from academics and practitioners because it played an important role in creating and maintaining consumer behavior. This study uses twenty- seven references relates to credibility, customer value, satisfaction, and loyalty. Several studies have discussed the relationship between credibility and consumer behavior and also elaborated dimensions of credibility. It also presented the shortcomings of current research and the trends for future study in Islamic banking.

This paper aims at empirically examining the short-run and long-run causal relationship between the Indonesian Islamic stock returns and selected macroeconomic variables namely inflation, money supply and exchange rate during the pre- and post- 2008 global financial turmoil period from 2002 until 2007 and from 2008 until 2013 by using monthly data. The methodology used in this study is time series econometric techniques i.e. the unit root test,co-integration test, error correction model (ECM) and variance decompositions(VDCs). The findings showed that there is cointegration between Islamic stock prices and macroeconomic variables. The results suggest that inflation, money supply, and exchange rate significantly affected the Islamic stock returns in Indonesia. These variables should be taken into account by the policy-makers as the important policy instruments in stabilizing Islamic stock markets in the countryDOI: 10.15408/aiq.v8i1.2505

Penelitian ini dilatarbelakangi oleh pelaksanaan pembayaran tunjangan kinerja pegawai Sekolah Menengah Kejuruan-Sekolah menengah Teknologi Industri (SMK SMTI) Kementerian Perindustrian di Indonesia. Pembayaran tunjangan kinerja pegawai dipengaruhi oleh grade jabatan yang disusun oleh manajemen dituangkan dalam struktur organisasi dan analisa jabatan pada SMK SMTI Kementerian Perindustrian. Penelitian ini menggunakan metode deskriptif, adapun objek penelitian ini adalah struktur organisasi (X1), analisis jabatan (X2) dan Motivasi Kerja (Y). Sedangkan subjek penelitian ini adalah SMK SMTI Kementerian Perindustrian di Indonesia. Berdasarkan hasil pengolahan data dan interprestasi data pada masing-masing variabel disimpulkan hasil penelitian: (1) Struktur organisasi pada SMK SMTI Kementerian Perindustrian sudah sangat baik, (2) Analisis jabatan pada SMK SMTI Kementerian Perindustrian sudah baik, (3) Motivasi kerja pada SMK SMTI Kementerian Perindustrian sudah sangat baik, (4) Terdapat pengaruh positif dengan tingkat signifikansi 0,609 antara variabel struktur organisasi terhadap variabel motivasi kerja, sehingga setiap ada perbaikan dalam struktur organisasi akan mengakibatkan peningkatan motivasi kerja, (5) Terdapat pengaruh positif dengan tingkat signifikansi 0,332 antara variabel analisis jabatan terhadap variabel motivasi kerja, sehingga setiap ada perbaikan dalam analisis jabatan akan mengakibatkan peningkatan motivasi kerja.

Article 33 of the 1945 Constitution of Indonesia positioned co-operative as a pillar and backbone of the national economy. To optimally function as the pillar and backbone of the economy, the co-operatives should be managed efficiently and productively. Considering their pivotal roles in the Indonesian economy, this study is aimed at empirically measuring efficiency and productivity of the co-operatives across 33 provinces nationwide. Three inputs (i.e., own capital, external financing, and board size) and one output (co-operative surplus) over the period 2010-2015 are analyzed using Data Envelopment Analysis (DEA) with Malmquist Index. The study documented that the co-operatives were highly inefficient, indicated by the average level of inefficiency of 47.6%. Out of the co-operatives in 33 provinces, 42.42% were found to record efficiency level of less than 50% and only 12.12% of them were fully efficient. In addition, the study also documented that, of 33 provinces, only the co-operatives in 14 provinces were found to experience an increase in their total factor productivity. The co-operatives in the province of East Nusa Tenggara recorded the highest productivity progress by 49.9%, while the co-operative in the province of Bangka Belitung recorded the highest productivity regress by -24.4%. Overall, the productivity level of the co-operatives only slightly increased by 9.9% over the study period nationwide, which was mainly contributed by an increase in technical efficiency. These findings implied that to further enhance the productivity level of the co-operatives, improving their pure efficiency should be prioritized, followed by enhancing their scale efficiency and technical efficiency. The co-operatives should provide regular training for their staff, professional management, adopt advanced technology, and enlarge their size by merging small co-operatives become a larger entity.

This research empirically and comparatively examines the quality of conventional and Islamic banks’ asset management in Indonesia during the period 2009-2011. Four general conventional banks [i.e., Bank Mandiri Indonesia (BMI), Bank Rakyat Indonesia (BRI), Bank Central Asia (BCA), and Bank Nasional Indonesia (BNI)] and four Islamic banks (Bank Muamalat, Bank Syariah Mandiri, Bank Syariah Mega Indonesia, and Bank Syariah BRI) were, respectively, explored. Specifically, the purpose of this study is to compare the quality of the Islamic and conventional banks’ asset management with the CAMEL (capital, asset, management, earning, and liquidity) method. It also attempts to analyse the influences of the ROA (Return on Asset), TLTA (Total Loan to Total Assets), and OITL (Operating Income to Total Liabilities) on the quality of the banks’ asset management. The CAMEL method was used to evaluate the quality level of the banks’ asset management, while the multiple regression analysis was then adopted to explore the determinants of the quality of the banks’ asset management. The study documented that Bank Syariah BRI was the best performing bank, with the highest CAMEL score of 50.33, while Bank Mandiri Indonesia was the worst performer with the lowest CAMEL score of 26.33. As a group, the Islamic banks were found to have better rankings, i.e., positions 1, 2, 3, and 6, while the conventional banks were found in 4, 5, 7, and 8, respectively. The study proved that the Islamic banks have a better asset management quality compared to their conventional counterparts. The Islamic banks were also proved to be better able to withstand the risks, particularly the financing risk.

This paper is an extended version of our earlier study (Abd. Majid and Maulana 2010) to further re-examine the relative efficiencies of selected Islamic and conventional mutual funds companies in Indonesia during the period 2004 to 2007 and their determinants. To measure their efficiencies, the output-input data consisting of a panel of conventional and Islamic mutual funds companies are empirically examined based on the most commonly used non-parametric approach, namely, Data Envelopment Analysis (DEA). It also attempts to investigate the influence of the mutual funds companies’ characteristics on efficiency measures using the Generalized Least Square (GLS) estimation. The study finds that, on average, the Indonesian mutual funds companies experienced a decrease in Total Factor Productivity (TFP) growth. It is mainly caused by a decline in both efficiency and technical efficiencies, where the efficiency change is largely contributed by the changes in pure efficiency rather than scale efficiency. Additionally, the study also documents that the funds size negatively affects efficiency. This indicates that due to its diseconomies of scale, a larger mutual funds company is less efficient than a smaller funds company. Finally, in comparing the efficiency of the mutual funds companies, the study finds that, on average, the Islamic unit trust companies perform more poorly than their conventional counterparts.

This research empirically measures the economic exposure of 11 selected miscellaneous companies in Indonesia. It also attempts to empirically explore the influence of firm size, export, liquidity, and leverage on the economic exposure of those companies. Annual data from 2007 to 2010, which was collected from the www.idx.co.id and www.bi.go.id were used and analyzed by the multiple linear regression to measure the economic exposure and examine the influences of the firm size, export, liquidity, and leverage on the economic exposure. Both partial (t-test) and simultaneous (F-test) hypotheses were constructed and tested using the software of SPSS for Windows. The research documented that, with the exception of the liquidity, which has a negative and significant effect partially on the economic exposure, all other variables, i.e., the firm size, export, and leverage were found to have insignificant effects. Meanwhile, based on the F-test, the research found that the firm size, export, liquidity, and leverage affected simultaneously and significantly the economic exposure of the companies. These findings imply that in order to manage their economic exposure, the companies should control these variables, especially the liquidity.

We analyze the cyclical behavior between outputs and prices in major ASEAN economies, namely Malaysia, Indonesia, Thailand, Singapore and the Philippines over two sample periods: the pre-crisis period (1990 to 1996) and the post-crisis period (2000 to 2006). Specifically, the study aims to shed the light on two issues: (i) the possibility that there is a change in the patterns of the correlations between real activities and prices in a particular country in the pre-crisis period compared to the post-crisis period; and (ii) the synchronization of real activity and price relationships or the business cycles across the major ASEAN countries. In order to analyze the output-price relationship across the countries and time periods, we adopt several tests including the Pearson correlation analysis, Auto-Regressive Distributed Lag (ARDL) model and Vector Error-Correction Model (VECM). The study documents that the output-price relationship has changed in several countries following the crisis in 1997/1998. While there is a clear business cycles synchronization between the ASEAN-5 countries in the short-run, results have been mixed in the long run. Results of this study contribute towards further enriching the policy recommendations to help ensuring the viability and effectiveness of the economic cooperation between the ASEAN nations.

This paper empirically examines the short- and long-run relationships between financial development and economic growth during the post-1997 financial crisis in Indonesia by employing a battery of times-series techniques, such as Autoregressive Dis-tributed Lag (ARDL) model, vector error correction model (VECM), variance decompositions (VDCs), and impulse-response functions (IRFs). Based on the ARDL (2, 0, 1, 2) model, the study finds that there exists a long-run equilibrium between economic growth and financial depth, share of investment, and inflation. In the long run, inflation is found to be the only variable which significantly (negatively) affects economic growth, implying a crucial role of maintaining a low rate of inflation in promoting the economic growth in the country. As for the dynamic causalities among the variables, the study finds the bidirectional causation between economic growth and investment, while the unidirectional causation is only found running from financial depth to investment. The finding of independence between economic growth and financial development supports the view of “the independent hypothesis” of Lucas (1988). Finally, based on VDCs and IRFs, the study documents that the variations in the economic growth respond more to shocks in the price stability (inflation), followed by investment and financial development. Our findings indicate that if policy makers want to promote growth, attention should be focused on long-run policies, i.e., maintaining the low rate of inflation.

This study investigates the efficiency and productivity performance of the national private banks in Indonesia during the period of 2002-2004. The data consist of 21 national private banks including two Islamic banks. Productivity is measured by the Malmquist Index using Data Envelopment Analysis (DEA) technique. Overall, the result shows that the Total Factor Production (TFP) Index of the national private banks has considerably increased for the whole industry, in which technical change is found to be a more important source of productivity growth to the Indonesian Banking Industry compared to efficiency change. Furthermore, the result also shows that the efficiency of two Islamic banks is above the average efficiency of the national private banks.

This paper examines long run co-movements between Malaysian stock market and the two largest stock markets in the world: the U.S. and Japan. By employing time-series analysis, i.e., cointegration, variance decompositions, and impulse response functions, the paper seeks to investigate which market actually leads the Malaysian stock market before, during, and after the 1997 Asian financial crisis periods. The results indicate that there is a co-movement of these markets only in the post crisis period. The Japanese stock market is found to significantly move the Malaysian stock market compared to U.S. stock market for the post-crisis period. At the same time, there seems to be a growing proportion of bilateral trade between Malaysia and Japan during the mentioned period. This finding seems to be consistent with the view that the stronger the bilateral trade ties between two countries, the higher the degree of co-movements (Masih and Masih 1999; Bracker et al. 1999; Pretorius 2002; Ibrahim 2003; Kearney and Lucey 2004). Our finding implies that the opportunities of gaining abnormal profits through investment diversification during the post-crisis period in the Malaysian and Japanese stock markets are diminishing as the markets move towards a greater integration. This further implies that any development in the Japanese economy has to be taken into consideration by the Malaysian government in designing policies pertaining to Malaysian stock market.

This study adopts the error correction model to empirically investigate the role of real stock prices in the long run-money demand in the Malaysian financial or money market for the period 1977: Q1-1997: Q2. Specifically, an attempt is made to check whether the real narrow money (M1/P) is cointegrated with the selected variables like industrial production index (IPI), one-year T-Bill rates (TB12), and real stock prices (RSP). If a cointegration between the variables, i.e., the dependent and independent variables, is found to be the case, it may imply that there exists a long-run co-movement among these variables in the Malaysian money market. From the empirical results it is found that the cointegration between money demand and real stock prices (RSP) is positive, implying that in the long run there is a positive association between real stock prices (RSP) and demand for real narrow money (M1/P). The policy implication that can be extracted from this study is that an increase in stock prices is likely to necessitate an expansionary monetary policy to prevent nominal income or inflation target from undershooting.

The failure of western economists to identify the factors that cause of the differences in economic growth within a country over time and differences in economic growth between countries are because of their weaknesses and ignorance. Besides, the ignorance of the role of science in the early emergence of the theory of economic development, until now they still deny the presence of the grace of Allah SWT as the most important factor causing the ongoing economic development of the people. Because of the high value of science in Islam, then the mastery of science comprehensively and completely will allow Muslims to build its economy. However, economic development of the people will never apply without the blessing of Allah through His grace stream. This paper is to review and uncover the weakness of western economic growth theory since the theory was first initiated. Although, initially the western economists had ignored the role of science as one important indicator of economic development, then in the end of 2nd millennium they have that mastery of knowledge is absolutely necessary to develop the economy of the country. It is clearly shown that finally the western economists were forced to admit the truth of the words of Allah that has been poured in the Muslim holy book, Al Qur'an, about the importance of the role of sciences in life in this world. =========================================== Kegagalan para ahli ekonomi barat untuk mengidentifikasi faktor-faktor penyebab terjadinya perbedaan pertumbuhan ekonomi dalam sebuah negara dari masa ke masa dan perbedaan pertumbuhan ekonomi antar negara adalah mutlak disebabkan oleh kedhaifan dan kejahilan mereka sendiri. Selain sempat mengabaikan peran ilmu pengetahuan pada awal-awal kemunculan teori pembangunan ekonomi, hingga detik ini mereka masih menafikan kehadiran rahmat Allah SWT sebagai faktor terpenting penyebab berlangsungnya pembangunan ekonomi umat. Karena tingginya nilai ilmu pengetahuan dalam Islam, maka penguasaan ilmu pengetahuan secara komprehensif dan benar jelas akan memudahkan umat Islam untuk membangun ekonominya. Namun, pembangunan ekonomi umat tidak akan pernah berlaku tanpa mendapat restu Allah SWT melalui cucuran rahmatNya. Tulisan ini meninjau dan menguak kedhaifan teori pertumbuhan ekonomi barat sejak teori itu pertama kali digagaskan. Walaupun pada awalnya para ahli ekonomi barat sempat mengabaikan peran ilmu pengetahuan sebagai salah satu indikator penting dalam pembangunan ekonomi, namun di akhir milineum ke-2 mereka telah menyadari bahwa penguasaan ilmu pengetahuan adalah mutlak diperlukan untuk membangun ekonomi negara. Ini, secara jelas, menunjukkan bahwa, akhirnya, para ahli ekonomi barat terpaksa mengakui kebenaran kata-kata Allah SWT yang telah dituangkan dalam kitab suci umat Islam, al-Qur’an tentang pentingnya peran ilmu pengetahuan dalam menjalani kehidupan di dunia fana ini.

This study discusses the concept of poverty from an Islamic perspective. It then attempts to propose a holistic strategy to alleviate poverty in Indonesia within the Shari'ah framework. To eradicate poverty, inter alia, Indonesian Muslims should constantly and steadfastly improve their devoutness to the Almighty God. Their daily activities must be always in harmony with the Divine injunctions, the Holy Qur'an and Hadith. The elite groups must compromise and do not monopolize power and wealth in the country. Developmental budget should be proportionately distributed among its citizens. Just economic and democratic political systems which are free from corruption and malpractices must be upheld. The rich Indonesian Muslims must fulfil their rights to the poor by paying zakat (Islamic tax). The ruling government should not be oppressive; the political elites should not take a chance to reap their benefits in the political instability in the country. The just distribution of income should be preserved so that the continuous efforts to alleviate poverty can be easily intensified.

This study discusses the concept of poverty from an Islamic perspective. It then attempts to propose a holistic strategy to alleviate poverty in Indonesia within the Shari'ah framework. To eradicate poverty, inter alia, Indonesian Muslims should constantly and steadfastly improve their devoutness to the Almighty God. Their daily activities must be always in harmony with the Divine injunctions, the Holy Qur'an and Hadith. The elite groups must compromise and do not monopolize power and wealth in the country. Developmental budget should be proportionately distributed among its citizens. Just economic and democratic political systems which are free from corruption and malpractices must be upheld. The rich Indonesian Muslims must fulfil their rights to the poor by paying zakat (Islamic tax). The ruling government should not be oppressive; the political elites should not take a chance to reap their benefits in the political instability in the country. The just distribution of income should be preserved so that the continuous efforts to alleviate poverty can be easily intensified.