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Journal of Indonesian Economy and Business
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THE EFFECT OF INTERNAL AND EXTERNAL ACCOUNTABILITY, JOB MOTIVATION AND EDUCATION ON LOCAL GOVERNMENT OFFICIAL’S PERFORMANCE

Risakotta, Kathleen Asyera, Akbar, Rusdi

Journal of Indonesian Economy and Business Vol 33, No 3 (2018): September
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

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Abstract

This study aims to empirically analyze the influence of internal and external accountabilities, job motivation and education on the performance of local government officials with organizational commitment as the intervening variable. This study used a mixed method that consists of Partial Least Square (PLS) for the analysis of the quantitative and a thematic content analysis for the qualitative approach. The sample includes 224 government officers from the Provincial Government of Maluku Province and Ambon City Council. The result of this study shows that internal accountability, job motivation and organizational commitment have a positive influence on the performance of the local government employees, while both external accountability and education do not play a positive role in their organizational commitment. These are the driving factor for organizations to improve the accountability and performance of government institutions, so that good governance may occur in the future. The results of this study could be used as advices to local governments on their employee training programs in order to improve the performance of the employees of local government agencies. 

THE IMPACT OF RISING FOOD PRICES ON FARMERS’ WELFARE IN INDONESIA

Girik Allo, Albertus, Satriawan, Elan, Arsyad, Lincolin

Journal of Indonesian Economy and Business Vol 33, No 3 (2018): September
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

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Abstract

Food prices regularly change due to various factors such as the policy on imports. This paper analyzes the impact of changes in food prices including rice, red onions, and garlic, on farmers’ welfare. The Quadratic Almost Ideal Demand System (QUAIDS) was used to estimate the demand function for food commodities, and the Compensating Variation (CV) was used to estimate the impact of price changes both immediately and in the short-term. This study contributes an idea of how the government makes its policies on food prices and imports, and how they provide benefits for farmers in Indonesia. Data were collected from the 2014 National Socio-economic Survey (SUSENAS). The research results indicated that income improvement led to the increase in rice, red onion and garlic consumption. The dynamics of income, own-price and cross-price elasticity varied, depending on demography, the social economic condition, and the geographic location of the household. The short-term impact of imported products on welfare changes was larger than the immediate impact.

THE IMPLEMENTATION OF RISK MANAGEMENT AND ITS EFFECT ON GOOD COOPERATIVE GOVERNANCE AND SUCCESS

Sugiyanto, Sugiyanto, Rahayu, Anggi Andriani

Journal of Indonesian Economy and Business Vol 33, No 3 (2018): September
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

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Abstract

The Cooperative success must be support by Good Cooperative Governance and implementation of risk management. This study identifies risk management, especially in savings and loan cooperatives, and to test and prove empirically the effects of the implementation of risk management on good cooperative governance and the cooperative success. The research method used a descriptive quantitative analysis and saturation sampling techniques; while the size of the population was 73 persons, consisting of various cooperatives’ boards of directors, supervisors, managers, and administrators. The primary data needed in this study were obtained by using a survey method which involved questionnaires and conducting structured interviews. This study uses a statistical approach by using path analysis. The result of this study shows that two categories of risks can be identified, which are minor and insignificant risks. A minor risk includes the credit risk and strategic risk, and an insignificant risk includes six risks: market risk, liquidity risk, operational risk, legal risk, reputation risk and compliance risk. Based on the statistical analysis, the indication is that there is no effect from the implementation of risk management on a cooperative’s success, but there is an effect from the implementation of risk management on good cooperative governance, and good cooperative governance has an effect on a cooperative’s success. Indirectly, a cooperative’s success is not influenced by the implementation of risk management, but it is influenced by the implementation of risk management through good cooperative governance as an intervening variable. 

DO TAX STRUCTURES AFFECT INDONESIA ECONOMIC GROWTH?

Iswahyudi, Heru

Journal of Indonesian Economy and Business Vol 33, No 3 (2018): September
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

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Abstract

This paper investigates how changes in the tax structure may affect Indonesia’s long-run economic growth.* The growth effects of the mix of income taxes and consumption taxes are examined using a set of panel growth regressions, which account for indicators of the tax structure, as well as both the accumulation of physical capital and human capital. The results suggest that income taxes may not exert a statistically significant impact on long-run growth, while consumption taxes may have a positive and statistically significant impact. These results, however, are not robust to changes in the regression’s specifications. Hence, although previous studies predict that the mix of direct and indirect taxes may be an important determinant of long-run growth, this paper provides evidence that, in practice, this mix is unlikely to have an impact on the long-run economic growth of Indonesia. It is therefore suggested that policy makers could instead focus their attentions on directing tax reform in Indonesia toward improving tax administration and the equity of the tax system. 

SHOPPING EXPERIENCE AND SUBJECTIVE WELL-BEING: AN EMPIRICAL STUDY

Sabil Hussein, Ananda

Journal of Indonesian Economy and Business Vol 33, No 3 (2018): September
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

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Abstract

While a traditional marketer aims to enhance customer loyalty, a social marketer focuses on the creation of individual well-being. To date, some social marketing programs have been launched to enhance individual well-being. However, only a few studies have been oriented to investigate subjective well-being, in the domain of traditional marketing. Previous studies have indicated that service quality is an important determinant of subjective well-being for a service organization’s customers. However, this notion is not enough as service quality only captures performance of service in the level of attribute. For that reason, this introduces the notion of experience quality as the determinant of subjective well-being. To have a better knowledge about the relationship between these constructs, this study also inserted the notion of customer satisfaction and perceived shopping enjoyment as mediating variables. Two hundred respondents participated in this study. These respondents were recruited at department stores in Malang, a city in the Province of East Java. A self-administered survey was conducted to collect the data. A Covariance Based Structural Equation Model (CBSEM) was employed to analyze the data. The results of a Confirmatory Factor Analysis (CFA) confirmed the model proposed. The structural model showed that the experience of shopping has significant effects on customer satisfaction, perceived shopping enjoyment, and subjective well-being. However, this study failed to prove the mediating effects of customer satisfaction and perceived shopping enjoyment in the relationship between the shopping experience and subjective well-being. Upon the completion of this study, both theoretical and practical contributions were provided.

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.

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