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ANTECEDENTS AND CONSEQUENCES OF CARBON EMISSIONS‚?? DISCLOSURE: CASE STUDY OF OIL, GAS AND COAL COMPANIES IN NON-ANNEX 1 MEMBER COUNTRIES

Hapsoro, Dody, Ambarwati, Ambarwati

Journal of Indonesian Economy and Business Vol 33, No 2 (2018): May
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

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Abstract

The purpose of this study is to determine the characteristics of companies that voluntarily disclose carbon emissions and to examine the economic consequences of the carbon emissions‚?? disclosure. Companies used in the sample are oil, gas and coal companies in non-Annex 1 member countries registered in the Osiris database. The observation period was from the commencement of the Kyoto Protocols second commitment to date, or from 2013 to 2016. Measuring the carbon emissions‚?? disclosure is achieved by using a checklist developed from an information request sheet from the CDP (Carbon Disclosure Project). An assessment of the extent of the disclosure is made using the content analysis method. Company characteristics are proxied with leverage, profitability and firm age, while the economic consequences are proxied by using bid-ask spreads, the trading volume and share price volatility. The data analysis method used in this research is the Partial Least Square (PLS) method using the WarpPLS 4.0 application. Test results show that leverage, profitability and firm age have a positive effect on the carbon emissions‚?? disclosure. Furthermore, the test results show that carbon emissions‚?? disclosures have a positive effect on the trading volume and a negative effect on the bid-ask spreads and share price volatility. The above findings imply that firms with higher leverage, higher profitability and are older are more willing to reveal their carbon emissions‚?? disclosures. The more information that is contained in a carbon emissions‚?? disclosure, the more investors are interested in trading that companys shares, while the broader the carbon emissions‚?? disclosure is, the smaller the bid-ask spread and the less volatile the stock price are.

DETERMINING FACTORS OF FIRM SURVIVABILITY A STUDY OF UNIVERSITY SPIN-OFFS IN INDONESIA

Sallatu, Muhammad Afif, Indarti, Nurul

Journal of Indonesian Economy and Business Vol 33, No 2 (2018): May
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

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Abstract

Nowadays, universities in many countries are encouraged to take their research products to the next level by translating them into commercialized products to benefit society at large. In doing so, they establish a firm, a so-called University Spin-Off (USO), which specializes in carrying out the mission. A USO is a firm which is established to optimize or commercialize the Intellectual Property Rights (IPRs) of the university. Previous studies into USOs, documented in the extant literature, have mainly focused on investigating the initial process of the USOs‚?? establishment, such as the drivers to initiate the USOs. Only a little attention has been paid to investigate the various drivers affecting the development of the USOs. Studies into the survivability of USOs are relatively limited. The current study is intended to fill this gap. Additionally, the findings are expected to add to the existing literature on USOs, particularly in the context of developing countries. This study aims at identifying the factors affecting the USOs‚?? survival. We used the resource-based view and contingency theory to identify and understand the various factors (internal and external) that might affect a USO‚??s survivability. Data for this study were collected through a survey. From the literature, we identified ten relevant factors for a USO‚??s survivability and 41 items to operationalize them, which we then used to develop a questionnaire. The factors are the USO‚??s business orientation, human resources‚?? reputation, product innovation, business plan, business models‚?? innovation, social networks, export activities, capital access, government support, and the business‚??s incubator. The data were collected from 111 USOs established by 14 universities located in five big cities in Indonesia. The survey was conducted from February until May 2017. Before performing the regression analysis, we deployed a factor analysis to validate the instruments and found that all the 41 items were valid and fell into ten component factors. The analysis found that there were only two factors which significantly affected the USO‚??s survivability: Its human resources‚?? reputation and social networks. These findings lead us to a conclusion that building a good reputation and maintaining its social networks are very important to ensure the survivability of a USO.¬†

SEARCHING WIDELY OR DEEPLY? THE IMPACT OF OPEN INNOVATION ON INNOVATION AND INNOVATION PERFORMANCE AMONG INDONESIAN MANUFACTURING FIRMS

Hartono, Arif, Kusumawardhani, Ratih

Journal of Indonesian Economy and Business Vol 33, No 2 (2018): May
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

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Abstract

Since the term Open Innovation (OI) was coined by Henry Chesbrough in 2003, OI studies have been frequently conducted. Surprisingly, OI insights, in the context of Indonesian firms, are scarce. Furthermore, there are no existing OI studies that use data derived from innovation surveys. Hence, this study attempts to close the gap in the literature, by providing insights into Indonesian firms‚?? openness toward external knowledge, and its impact on innovation performance. The main aim of this study is to investigate the impact of OI practices on Indonesian manufacturing firms‚?? propensity to innovate (i.e. their product, process, organization, and marketing) and innovation performance. Product and process innovations are grouped under the term technological innovation, while organization and marketing innovations are classified as non-technological innovation. Data used in this study were derived from the Indonesia Innovation Survey (IIS) 2011 that covered the period from 2009-2010. Following Laursen and Salter‚??s (2006) study, OI indicators consist of external search breadth (i.e. the number of external sources or search channels that firms rely upon in their innovative activities) and depth (the extent to which firms draw deeply from the different external sources or search channels) in innovation process. Undertaking logistic and tobit regressions, this study shows that in general, both breadth and depth significantly and positively affect technological and non-technological innovation, as well as innovation performance. However, the over-search on external knowledge, measured by breadth squared and depth squared, negatively and significantly influence innovation and innovation performance. This indicates that too much external knowledge, sourced during the innovation process will diminish the return of innovation. This study also finds an indication of a complementary relationship existing between internal R&D and external knowledge; meaning that the implementation of one knowledge-sourcing strategy (either sourcing from internal R&D or external knowledge) increases the marginal returns from another. Lastly, important implications related to theoretical and innovation strategies are proposed.¬†

VOLATILITY SHOCK PERSISTENCE IN INVESTMENT DECISION MAKING: A COMPARISON BETWEEN THE CONSUMER GOODS AND PROPERTY-REAL ESTATE SECTORS OF THE INDONESIAN CAPITAL MARKET

Christianti, Ari

Journal of Indonesian Economy and Business Vol 33, No 2 (2018): May
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

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Abstract

Research about volatility shock persistence is very important, since it could reflect the risks that can be used to estimate the fluctuations of stock returns in the future. This paper investigates a comparison of the volatility shock persistence sectoral indexes between the consumer goods (CONS) and property-real estate (PROP) sectors, using a single index model analyzed using GARCH (Generalized Autoregressive Conditional Heteroscedasticity) and I-GARCH (Integrated-Generalized Autoregressive Conditional Heteroscedasticity). By using index return data from January 2010-December 2015, the research shows that CONS and PROP tend to produce the same results. The CONS and PROP indexes‚?? responses to volatility shocks tended to be quite fast. Hence, the single index model of the CONS and the PROP indexes can quickly return to its normal stability. It means that, in the presence of certain information which could affect the volatility of the return from these sectors, the market will respond and adapt immediately. This might be attributed to the fact that CONS is a sector that involves fast moving products. Furthermore, the PROP sector has an indirect effect by increasing the real sectoral economic activity and economic growth in Indonesia, which has a large population. Thus, it is recommended that investors who are risk averse and risk neutral should invest in these sectors, because the volatility of both indexes can be monitored based on the existing information.

A COMPARATIVE STUDY OF BANKING EFFICIENCY IN ASEAN-5: THE DATA ENVELOPMENT ANALYSIS (DEA) APPROACH

Wahyudi, Setyo Tri, Azizah, Azizah

Journal of Indonesian Economy and Business Vol 33, No 2 (2018): May
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

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Abstract

As an intermediary institution, a bank is required to operate efficiently due to the increased competition among banks, both domestic and international. However, not all banks are able to optimize their owned resources to reach a certain efficiency level. Thus, efficiency plays an important role in this era of more globalized banking competiti on. The objective of this study is to calculate the banking efficiency score for the ASEAN-5 countries, consisting of Indonesia, Malaysia, the Philippines, Singapore, and Thailand. Using Data Envelopment Analysis (DEA), the input variables comprised of employees‚?? benefits, fixed assets, and deposits; while the output variables were total income and loans. The results show the relatively high efficiency levels of every bank in each country. The achievement of an input-output efficiency variable in the first period (2006-2009) tended to increase, but the second period (2010-2013) showed a declining trend. The performance of the banks in Singapore during the first period was very good, while in the second period, the banks in the Philippines showed a respectable performance.

THE EFFECT OF SOCIAL CAPITAL ON WELFARE IN INDONESIA

Jumirah, Jumirah, Wahyuni, Heni

Journal of Indonesian Economy and Business Vol 33, No 1 (2018): JANUARY
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

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Abstract

Studies into the impact of social capital on welfare are currently growing. However, studies for the case of the developing countries, including Indonesia, are still very rare. Therefore, this paper¬†aims to analyze the impact of social capital on welfare in Indonesia. In this study, social capital is measured by three indicators, namely, trust, cooperativeness and the social network (a person‚??s participation in community activities).Welfare is measured by household expenditure for food and non-food items. The data are acquired from the Indonesian Family Life Surveys for the years 2007 (IFLS4) and 2014 (IFLS5). This research¬†uses¬†instrumental¬†variables¬†to address the endogeneity issue¬†on¬†social networking (participation in¬†community activities), which is a potential two-way causal relationship. It means that individuals with higher welfare (income) have a higher possibility of participating in community activities, since their participation in community activities is a leisure activity and the utilization of leisure is higher for higher-income people.Using the Instrumental Variables (IV) method and marital status as an instrument, the study found that social capital has a significant impact on welfare. An increased participation in community activities will improve ones welfare by 11.7 percent. Moreover, an increase of cooperativeness by one percent, would increase the welfare by 0.2 percent. On the other hand, trust has a negative relationship with welfare. It means that an increase in trust among individuals by one percent will cause household expenditure on food and non-food items to drop by 0.3 percent.It may imply that higher¬†trust¬†will cause¬†lower¬†transaction costs, which will reduce the expense of individuals buying food and non-food items. Since¬†the coefficient¬†of IV¬†is larger than the coefficient¬†in the OLS estimation, it indicates the absence of reversed causality. The results of this study have an implication for policy decision making which suggests that the policy decision makers should consider the impact of social capital on welfare and support the increase of individuals‚?? participating in community activities.

THE INTERDEPENDENCE BETWEEN THE FINANCIAL SECTOR AND BUSINESS SECTOR IN ASEAN 4 COUNTRIES

Hubbansyah, Aulia Keiko, Husodo, Zaafri Ananto

Journal of Indonesian Economy and Business Vol 33, No 1 (2018): JANUARY
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

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Abstract

In this study, we analyze the dynamic interactions between the financial sectors and the business sectors in the ASEAN-4 countries (Indonesia, Malaysia, Thailand and Singapore). To do that, we apply the newly generalized version of the Vector Autoregressive Framework (VAR) spillover index approach proposed by Diebold and Yilmaz (2012) as our method of analysis. Based on quarterly data of each variable over the period from the first quarter of 1984 to the fourth quarter of 2015 for the ASEAN-4 countries, this study finds that: 1) Spillovers between the variables move in a diverse manner over the period of analysis for each country, 2) The variable that acts as the dominant crisis transmitter in each country is different for each country, 3) The interdependence between the variables became stronger, both within and across the countries, during the crisis period. In particular, the business sectors played a leading role during the onset of the crisis, while the financial sectors took their places as the dominant source of spillovers as the crisis deepened. 4) Credit growth in Thailand was found to be the dominant transmitter of shocks to the ASEAN-3 countries. Overall, these results suggest that the strength and movement of the spillovers between the financial and business sectors changed from time to time along with the changes that happened in the economies.  

THE NEW ERA OF FINANCIAL INNOVATION: THE DETERMINANTS OF BITCOIN‚??S PRICE

Sukamulja, Sukmawati, Sikora, Cornelia Olivia

Journal of Indonesian Economy and Business Vol 33, No 1 (2018): JANUARY
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

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Abstract

Financial innovation has entered a new era in which a digitalized system and cryptocurrency have been created. This paper examines the factors that influence the price movement of bitcoin. This is not a legal currency in Indonesia; the Indonesian government has not made any regulations legalizing bitcoin‚??s use, but it has also not issued any new laws to prohibit the trade in bitcoins and other digital currencies. The demand for, and price growth of, bitcoin are interesting matters to study, especially for Indonesians who still have questions about the progress of Bitcoin transactions and the factors that influent them. In Indonesia itself, without any protection from the government, the bitcoin price on December 14, 2017 had already reached more than IDR224.5 million, compare to IDR60 million in October 2017. Bitcoin is the first peer-to-peer currency, and was introduced by Satoshi Nakamoto in 2008. Since its inception, bitcoin has served more than 17 million users, including Indonesians. Bitcoin behaves in a different manner, compared to traditional currencies and the one that affects bitcoin‚??s price is its attractiveness for investors. The Vector Error Correction Model (VECM) is applied to analyze the short-term and long-term influences. VECM is used in this research because the data is stationary in the first difference and has a cointegration relationship. To make the interpretation clearer, the impulse response function and variance decomposition also are included in this research. The result indicates that the macroeconomic indicator, represented by the Dow Jones Industrial Average (DJIA), the demand for bitcoins and the gold price influence bitcoin‚??s price fluctuations in the short-run and long-run. Bitcoin‚??s supply does not influence its price fluctuation in the long-run but does influence it in the short-run. The implication of this research is bitcoin could compete as an alternative investment compared to the capital markets and gold.

THE INFLUENCE OF PERCEIVED ORGANIZATIONAL SUPPORT, JOB SATISFACTION AND ORGANIZATIONAL COMMITMENT TOWARD ORGANIZATIONAL CITIZENSHIP BEHAVIOR (A Study of the Permanent Lecturers at University of Lambung Mangkurat, Banjarmasin)

Claudia, Meiske

Journal of Indonesian Economy and Business Vol 33, No 1 (2018): JANUARY
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

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Abstract

The population in this research is all of the permanent lecturers employed at University of Lambung Mangkurat (ULM). The respondents are taken from 4 academic ranks, which are represented by Asisten Ahli (Instructor), Lektor (Assistant Professor), Lektor Kepala (Associate Professor), and Guru Besar (Professor). One hundred and thirty samples were collected by using a proportional-stratified random sampling method. A Partial Least Square (PLS) method was used to analyze the data. The results showed that lecturers with a positive perception of the organizational support available to them feel more satisfied with their job, which in turn encourages the creation of a high organizational commitment and results in the emergence of positive organizational citizenship behavior (OCB). These study‚??s results showed us the application of social exchange theory and organizational support theory in a higher educational institution. The findings of this study are considered to be important, as they provide additional empirical evidence regarding the importance of organizational support as a basis for improving the ULM lecturers job satisfaction, organizational commitment, and OCB. The implications and further research are also discussed.

EFFECT OF WAGES ON MULTIPLE JOB HOLDING DECISIONS IN INDONESIA: EVIDENCE FROM THE INDONESIAN FAMILY LIFE SURVEY (IFLS) DATA OF 2007 AND 2014

Wijayanti, Niken Dwi, Adrison, Vid

Journal of Indonesian Economy and Business Vol 33, No 1 (2018): JANUARY
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

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Abstract

Multiple job holding - i.e., a phenomenon in which workers have more than one job has become a trend in developed countries and is beginning to occur in developing countries, such as Indonesia. Existing studies provide the evidence that wages are a significant and consistent criterion to determine multiple job decisions. Wage increases in the primary job will decrease the incentive to have a second job as the reservation wage increases. However, we do not find any study which links the current multiple job decision with the past multiple job status. In this study, we use data from the Indonesian Family Life Survey (IFLS) in 2007 and 2014 to investigate whether or not a wage increase in the primary job reduces the incentive to have a second job in 2014, controlling for the multiple job status in 2007. Using logit and multinomial logit estimations, we find that the wage increase in the primary job decreases the probability of having a second job in 2014.

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