THE ROLE OF INTEREST RATES AND PROVINCIAL MONETARY AGGREGATE IN MAINTAINING INFLATION IN INDONESIA

Inflation is a regional phenomenon hence the use of provincial data might be more appropriateon explaining the relationship between monetary policy and inflation. This paper analyzes the impact of changes in provincial money supply, the policy rate, and the interbank rate on regional inflation, within the framework of Hybrid New Keynesian Phillips Curve (HNKPC). This paper employs Generalized Method of Moments (GMM) on panel data of 32 provinces from 2005-III to 2014-IV. The estimation result shows that provincial monetary aggregate influence inflation significantly only in Sumatera. Furthermore, the policy fate affects the inflation in Sumatera and Kalimantan-Sulawesi. Using the interbank money rate, the result shows this rate also affect the inflation in most of the region except Kalimantan-Sulawesi. These findings show the price-based policy is more significant on affecting the provincial inflation compared to the provincial money supply.

Download Full-text

Online Reviews and Product Sales: The Role of Review Visibility

Journal of theoretical and applied electronic commerce research ◽

10.3390/jtaer16040038 ◽

2021 ◽

Vol 16 (4) ◽

pp. 638-669

Author(s):

Miriam Alzate ◽

Marta Arce-Urriza ◽

Javier Cebollada

Keyword(s):

Decision Making ◽

Dynamic Models ◽

Generalized Method Of Moments ◽

Online Reviews ◽

Consumer Decision Making ◽

Product Sales ◽

The Impact ◽

The Relationship ◽

The Empirical Analysis

When studying the impact of online reviews on product sales, previous scholars have usually assumed that every review for a product has the same probability of being viewed by consumers. However, decision-making and information processing theories underline that the accessibility of information plays a role in consumer decision-making. We incorporate the notion of review visibility to study the relationship between online reviews and product sales, which is proxied by sales rank information, studying three different cases: (1) when every online review is assumed to have the same probability of being viewed; (2) when we assume that consumers sort online reviews by the most helpful mechanism; and (3) when we assume that consumers sort online reviews by the most recent mechanism. Review non-textual and textual variables are analyzed. The empirical analysis is conducted using a panel of 119 cosmetic products over a period of nine weeks. Using the system generalized method of moments (system GMM) method for dynamic models of panel data, our findings reveal that review variables influence product sales, but the magnitude, and even the direction of the effect, vary amongst visibility cases. Overall, the characteristics of the most helpful reviews have a higher impact on sales.

Download Full-text

The Role of Urbanization Rate in the Relationship between Air Pollution and Health Expenditures: A Dynamic Panel Data Approach

International Letters of Social and Humanistic Sciences ◽

10.18052/www.scipress.com/ilshs.53.68 ◽

2015 ◽

Vol 53 ◽

pp. 68-72 ◽

Cited By ~ 1

Author(s):

Maryam Fattahi

Keyword(s):

Air Pollution ◽

Generalized Method Of Moments ◽

Health Expenditures ◽

Dynamic Panel Data ◽

Dynamic Panel ◽

Public And Private ◽

Urbanization Rate ◽

The Impact ◽

The Relationship

One of the available challenges in areas of health economics is identification of the effective factors on health expenditures. Air pollution plays important role in the public and private health expenditure but most studies have ignored the role of this category in explanation of health expenditures. On the other hand, the impact of air pollution on health expenditures is influenced by several factors. This study intends to investigate the effect of air pollution on public and private health expenditures and to identify the urbanization rate factor affecting the relationship between air pollution and public and private health expenditures. Scope of the present study is developing countries over period of 1995-2011. We used a dynamic panel and Generalized Method of Moments method. The empirical results indicate that air pollution has positive and significant effect on public and private health expenditures. Also, the results imply that urbanization rate affecting the relationship between air pollution and health expenditures that urbanization rate plays a reinforcing role.

Download Full-text

The Effect Of Government Debt Quantity Shocks On The Term Structure Of Interest Rates

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v5i1.2513 ◽

2011 ◽

Vol 5 (1) ◽

Cited By ~ 1

Author(s):

Riza Emekter ◽

John Geppert ◽

Benjamas Jirasakuldech

Keyword(s):

Interest Rate ◽

Interest Rates ◽

Term Structure ◽

Method Of Moments ◽

Public Debt ◽

Generalized Method Of Moments ◽

Government Debt ◽

Font Size ◽

Yield Model ◽

The Relationship

In this paper, the effect of the maturity composition of marketable public debt on the term structure of interest rate is explored.  The research has shown that this effect is relatively small.  Unlike previous research, the yield changes around the quantity shocks are analyzed in relation to these shocks.  Our results show that yields respond significantly to the auctioning of new bonds.  The announcements of auctions do not have any impact on yields.  A two-factor affine yield model is used to explain the relationship between quantity shocks in public debt and term structure of interest rates.  The parameters are estimated using Generalized Method of Moments.  While the relationship between quantities and yields is weak, yields can be related to the event of the auctioning process.

Download Full-text

FINANCIAL INCLUSION, INSTITUTIONAL QUALITY AND FINANCIAL DEVELOPMENT: EMPIRICAL EVIDENCE FROM OIC COUNTRIES

The Singapore Economic Review ◽

10.1142/s0217590820420084 ◽

2021 ◽

pp. 1-28

Author(s):

MINHAJ ALI ◽

MUHAMMAD IMRAN NAZIR ◽

SHUJAHAT HAIDER HASHMI ◽

WAJEEH ULLAH

Keyword(s):

Financial Development ◽

Method Of Moments ◽

Positive Impact ◽

Generalized Method Of Moments ◽

Institutional Quality ◽

Financial Inclusion ◽

Moderation Effect ◽

The Relationship ◽

Unique Study

This unique study examines the moderation effect of institutional quality (IQ) on the relationship between financial inclusion (FI) and financial development (FD) of 45 Organization of Islamic Cooperation (OIC) countries. For empirical analysis, panel data are used for the period 2000–2016. We use the Arellano–Bond generalized method of moments (GMM) and two-stage least-squares (2SLS) method in our estimations to draw multidimensional results. The empirical results confirm the significant positive relationship between FI, IQ and FD. Interestingly, we find that IQ moderates FI and has a significant positive impact on FD. Our findings are robust to alternative econometric specifications of FI, IQ and FD. Therefore, policymakers must sensibly understand the pivotal role of FI and IQ in establishing sustainable future development of OIC countries.

Download Full-text

Competition in the Georgian banking sector and its impact on the credit policy of commercial banks

MATEC Web of Conferences ◽

10.1051/matecconf/202134208003 ◽

2021 ◽

Vol 342 ◽

pp. 08003

Author(s):

George Abuselidze ◽

Mariam Sharabidze

Keyword(s):

Interest Rate ◽

Interest Rates ◽

Commercial Banks ◽

Banking Sector ◽

Current Situation ◽

Competitive Environment ◽

Credit Policy ◽

The Impact ◽

The Relationship

Based on the role of banking sector in the development of the country’s economy, we consider it important to study the current situation in this sector. The existence of a competitive environment ensures the efficient functioning of the banking sector. The aim of the study is to estimate the competitive environment in the banking sector, to determine the relationship between competition and interest rates. The research is based on the use of different economic models and indexes. Competition in the banking sector is studied on the example of Georgian banking sector, for that we used HHI Net Loans and H-statistic indicators. The study analyses the impact of competition in the banking sector on the net interest income and interest rate in the same sector.

Download Full-text

Inventory management, cost of capital and firm performance: evidence from manufacturing firms in Jordan

Investment Management and Financial Innovations ◽

10.21511/imfi.14(3).2017.01 ◽

2017 ◽

Vol 14 (3) ◽

pp. 4-14 ◽

Cited By ~ 1

Author(s):

Ashraf Mohammad Salem Alrjoub ◽

Muhannad Akram Ahmad

Keyword(s):

Firm Performance ◽

Inventory Management ◽

Method Of Moments ◽

Cost Of Capital ◽

Pearson Correlation ◽

Generalized Method Of Moments ◽

Business Environment ◽

The Impact ◽

The Relationship

Several studies have examined the relationship between inventory management and firm performance. However, most of these studies ignore the impact of inventory types on the relationship. Moreover, the relationship is influenced by some factors such as cost of capital which has not been considered. This study examines the moderating effect of cost of capital on the relationship between inventory types and firm performance. The data of 48 firms for the period 2010-2016 which formed 279 firm-year observations were used in this study. With the use of Pearson correlation and panel Generalized Method of Moments (GMM) estimation, the findings show that inventory management with consideration of its types influence firm performance in the long term. In addition, it is also found that cost of capital moderates the relationship between inventory management and firm performance. However, the interaction between cost of capital and inventory types has different implications. It is suggested that firms should consider cost of capital when making decision on inventory types and align their inventory control to fit in to the changes in their business environment.

Download Full-text

KREDIBILITAS BANK SENTRAL DAN PERSISTENSI INFLASI DI INDONESIA

EKUITAS (Jurnal Ekonomi dan Keuangan) ◽

10.24034/j25485024.y2013.v17.i2.2237 ◽

2017 ◽

Vol 17 (2) ◽

pp. 155

Author(s):

Rachman Hakim ◽

Munawar Ismail ◽

Arif Hoetoro

Keyword(s):

Central Bank ◽

Inflation Targeting ◽

Phillips Curve ◽

New Keynesian ◽

New Keynesian Phillips Curve ◽

Inflation Persistence ◽

The Impact ◽

The Relationship

The relationship between the credibility of the central bank and the persistence of inflation is still ambigous as this information is crucial in setting the appropriate policy for combating an inflation problem. The objective of this paper is to measure the rate of inflation persistence and to examine the importance of the credibility of the bank central on the persistence of inflation in Indonesia by using the New Keynesian Phillips Curve Hybrid. It is found that the persistence of inflation in the period of full - fledged Inflation Targeting (2006:1-2012:3) lower when compared with the period of Inflation Targeting Lite (2000:1-2005:4). Meanwhile, the credibility of the central bank is significantly influencing the persistence of inflation only when Indonesia was implementing the Full-Fledged Inflation Targeting. When Indonesia was applying the Inflation Targeting Lite, the impact of bank central credibility on persitence inflation was not significant. These findings indicate that the behavior of inflation in Indonesia was backward looking during the periode of Inflation Targeting Lite and becoming forwardlooking after adopting the Full-Fledged Inflation Targeting Policy. This change is related to the increased credibility of the central bank in the full - fledged Inflation Targeting period.

Download Full-text

Divestiture strategy, CEO power and firm performance

Management Research Review ◽

10.1108/mrr-04-2020-0196 ◽

2020 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Rayenda Khresna Brahmana ◽

Hui-Wei You ◽

Xhin-Rong Yong

Keyword(s):

Firm Performance ◽

Generalized Method Of Moments ◽

Strategic Decision ◽

Ceo Power ◽

Content Type ◽

And Performance ◽

The Impact ◽

The Relationship ◽

Moderating Role

Purpose This study aims to examine the moderating role of chief executive officer (CEO) power on the relationship between divestiture strategy and firm performance by framing the relationship under the agency and power circulation theories. Design/methodology/approach This study focuses on a sample of 319 non-financial public-listed companies in Malaysia from the year 2012–2016 and estimates the model under two-step generalized method of moments panel regression to eliminate the endogeneity issue. Findings The results show that divestiture strategy decreased the firm performance. Meanwhile, greater CEO power changed that divestiture effect but still failed to increase the performance. This study also indicates the CEO power strengthens the relationship between firm performance and divestiture. Research limitations/implications The overall findings show that the positive moderating role of CEO power on the relationship between divestiture and performance. This research confirmed the agency and power circulation theories by showing that CEO power can make divestiture strategy works. However, the moderating plot tells different. CEO power may strengthen the relationship between divestiture and performance; it fails to boost up the performance in overall. Therefore, this study is about CEO power on the strategic decision and gives a good implication for corporate governance concerning the impact of CEO power on the organization’s alignment process. Originality/value This study examines the effect of CEO power on the performance of divestiture strategy implementation by contesting the agency and power circulation theories within an emerging country context.

Download Full-text

Online Reviews and Product Sales: The Role of Review Visibility

Journal of theoretical and applied electronic commerce research ◽

10.3390/jtaer16010038 ◽

2021 ◽

Vol 16 (1) ◽

pp. 638-669

Author(s):

Miriam Alzate ◽

Marta Arce-Urriza ◽

Javier Cebollada

Keyword(s):

Decision Making ◽

Dynamic Models ◽

Generalized Method Of Moments ◽

Online Reviews ◽

Consumer Decision Making ◽

Product Sales ◽

The Impact ◽

The Relationship ◽

The Empirical Analysis

When studying the impact of online reviews on product sales, previous scholars have usually assumed that every review for a product has the same probability of being viewed by consumers. However, decision-making and information processing theories underline that the accessibility of information plays a role in consumer decision-making. We incorporate the notion of review visibility to study the relationship between online reviews and product sales, which is proxied by sales rank information, studying three different cases: (1) When every online review is assumed to have the same probability of being viewed; (2) when we assume that consumers sort online reviews by the most helpful mechanism; and (3) when we assume that consumers sort online reviews by the most recent mechanism. Review non-textual and textual variables are analyzed. The empirical analysis is conducted using a panel of 119 cosmetic products over a period of nine weeks. Using the system generalized method of moments (system GMM) method for dynamic models of panel data, our findings reveal that review variables influence product sales, but the magnitude, and even the direction of the effect, vary amongst visibility cases. Overall, the characteristics of the most helpful reviews have a higher impact on sales.

Download Full-text

Corporate Social Responsibility and Tax Aggressiveness: Evidence from Indonesia

Jurnal Manajemen Teori dan Terapan | Journal of Theory and Applied Management ◽

10.20473/jmtt.v13i2.21211 ◽

2020 ◽

Vol 13 (2) ◽

pp. 105

Author(s):

Fredi Kristiadi ◽

Elisabeth Penti Kurniawati ◽

Ahmad Maulin Naufa

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Method Of Moments ◽

Sampling Method ◽

Stock Exchange ◽

Generalized Method Of Moments ◽

Tax Aggressiveness ◽

Corporate Social ◽

The Impact ◽

The Relationship

The purpose of this research is to examine the impact of tax aggressiveness on corporate social responsibility (CSR) and its reversal. It also finds out which one of those relationships with more considerable influence. The population of this research is manufacture companies listed on the Indonesian Stock Exchange over the period 2008-2019. This research used a purposive sampling method and found 67 companies. We test the multiple regressions using the generalized method of moments (GMM) to analyze the hypotheses. The results depict that CSR does not affect tax aggressiveness. However, tax aggressiveness has a significant effect to enhance CSR. Therefore, the relationship between CSR and tax aggressiveness is only one direction.

Download Full-text