scholarly journals Intermediary performance of Islamic banks in the disruption era: Does it contribute to economic growth?

2021 ◽  
Vol 16 (1) ◽  
pp. 103-115
Author(s):  
Umrotul Khasanah ◽  
Ahmad Tibrizi Soni Wicaksono
Keyword(s):  
Economic Growth ◽  
Impulse Response Function ◽  
Third Party ◽  
Islamic Banks ◽  
Long Term Effects ◽  
Vector Error Correction ◽  
Long Run ◽  
Short And Long Term ◽  
Vector Error Correction Models

The study aims to measure the intermediary performance of Islamic banks in relation to economic growth in Indonesia in the short and long term. There are four main variables used, namely financing, fund placement in BI (Central Bank of Indonesia), investment in securities, and third-party funds in all Islamic banks from 2007 to 2019. The data were tested using vector error correction models (VECM), Granger Causality, Impulse Response Function (IRF), and Variant Decomposition (VDC) to examine causality relationships, the short- and long-term effects, shocks, and variances in Islamic bank intermediary performance to economic growth. The results show that there is a two-way causality relationship between financing and third-party funds to economic growth. While in the short term, fund placement in BI, investment in securities, and financing have a significant influence on economic growth, but in the long run, only the placement of funds in BI will affect economic growth. Also, only fund placement in BI can shock and significantly contribute to economic growth in the long term. The overall intermediary performance of Islamic banks has not contributed to Indonesia’s economic growth in the long term.

scholarly journals Profitability Variables and Bank Size Effects on Corporate Zakat: Evidence from Indonesian Islamic Banks

2019 ◽  
Vol 4 (1) ◽  
pp. 55-66
Author(s):  
Muhammad Anif Afandi
Keyword(s):  
Impulse Response Function ◽  
Islamic Banks ◽  
Vector Error Correction ◽  
Independent Variables ◽  
Vector Error ◽  
Long Run ◽  
Short Run ◽  
Operational Activities ◽  
Conventional Banks ◽  
Research Period

Islamic banks carry out their operational activities based on Islamic principles. Thus, they are not only required to pay taxes but also zakat of 2.5 percent with several conditions. Theoretically, zakat has an impact on Islamic banks larger expenditures compared to conventional banks which are not obliged to. This research examines and analyzes the extent to which profitability variables which are ROA, ROE, and BOPO, and bank size which is represented by total assets, can affect corporate zakat expenditure by Islamic Commercial Banks (BUS) in Indonesia. To do so, the Panel Vector Error Correction Model (PVECM) is used to analyze the subject matters which the period covers from 2012 to 2017. This work finds that in the short-run, all the independent variables were insignificant. However, in the long-run only ROE and BOPO which were significant. The results of the Impulse Response Function (IRF) analysis showed that the dependent variable responds to the shock of its independent variables with fluctuating and even negative trend. In addition, the results of Variance Decomposition (VDC) analysis showed that the contribution of profitability variables and bank size tended to decrease toward the formation of corporate zakat expenditure by BUS until the end of the research period. Keywords: Corporate Zakat Expenditure, Islamic Banks, Profitability, Bank Size, PVECM

scholarly journals The effects of carbon emissions, rainfall, temperature, inflation, population, and unemployment on economic growth in Saudi Arabia: An ARDL investigation

PLoS ONE ◽  
2021 ◽  
Vol 16 (4) ◽  
pp. e0248743
Author(s):  
Md Mazharul Islam ◽  
Majed Alharthi ◽  
Md Wahid Murad
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Saudi Arabia ◽  
Carbon Emissions ◽  
Annual Rainfall ◽  
Long Term Effects ◽  
Ardl Model ◽  
Long Run ◽  
Unemployment Problem

Objective While macroeconomic and environmental events affect the overall economic performance of nations, there has not been much research on the effects of important macroeconomic and environmental variables and how these can influence progress. Saudi Arabia’s economy relies heavily on its vast reserves of petroleum, natural gas, iron ore, gold, and copper, but its economic growth trajectory has been uneven since the 1990s. This study examines the effects of carbon emissions, rainfall, temperature, inflation, population, and unemployment on economic growth in Saudi Arabia. Methods Annual time series dataset covering the period 1990–2019 has been extracted from the World Bank and General Authority of Meteorology and Environmental Protection, Saudi Arabia. The Autoregressive Distributed Lag (ARDL) approach to cointegration has served to investigate the long-run relationships among the variables. Several time-series diagnostic tests have been conducted on the long-term ARDL model to check its robustness. Results Saudi Arabia can still achieve higher economic growth without effectively addressing its unemployment problem as both the variables are found to be highly significantly but positively cointegrated in the long-run ARDL model. While the variable of carbon emissions demonstrated a negative effect on the nation’s economic growth, the variables of rainfall and temperate were to some extent cointegrated into the nation’s economic growth in negative and positive ways, respectively. Like most other nations the short-run effects of inflation and population on economic growth do vary, but their long-term effects on the same are found to be positive. Conclusions Saudi Arabia can achieve both higher economic growth and lower carbon emissions simultaneously even without effectively addressing the unemployment problem. The nation should utilize modern scientific technologies to annual rainfall losses and to reduce annual temperature in some parts of the country in order to achieve higher economic growth.

scholarly journals CAN FOREIGN DIRECT INVESTMENT REDUCE UNEMPLOYMENT IN HOME COUNTRIES? ANALYSIS FOR ASEAN COUNTRY

2019 ◽  
Vol 4 (2) ◽  
pp. 143
Author(s):  
ELSA WIDIA ◽  
ENDRIZAL RIDWAN ◽  
FAJRI MUHARJA
Keyword(s):  
Empirical Studies ◽  
Direct Foreign Investment ◽  
Annual Data ◽  
Long Term Effects ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Asean Country

Direct Foreign Investment (FDI) has been considered as one of the important strategies in long-term economic development. FDI is seen not only as a capital transfer but also has an important effect on increasing the host economy. FDI then became popular in many countries, so it was interesting to analyze the effects produced, both positive and negative. This research focuses on countries in the Association of Southeast Asian Nations (ASEAN) with the aim of conducting empirical studies on opportunities for employment creation by FDI. However, due to limited data in several countries, this study only involved Indonesia, Singapore, Malaysia and Thailand. The type of data used in this study is annual data covering from 1980-2017. Using estimation Vector Error Correction Model (VECM) allows to see short-term and long-term effects. The test results prove that the influence between variables is more visible in the long run

scholarly journals Sustainable Knowledge Investment Increases Employment and GDP in the Spanish Agricultural Sector More Than Other Investments

2020 ◽  
Vol 12 (8) ◽  
pp. 3127
Author(s):  
Carolina Cosculluela-Martínez
Keyword(s):  
Agricultural Sector ◽  
First Year ◽  
Long Term Effects ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Short And Long Term ◽  
Stock Types ◽  
Processing Techniques

Investment in every type of asset increases GDP and net employment differently. This paper compares the effect produced by a permanent unitary shock in Sustainable Knowledge for the Primary Sector (SKPS) on the Spanish employment and GDP growth with the effect produced by the other fourteen capital stock types. The methodology used is a Vector Error Correction Model (VECM), where the complementary capital can affect SKPS instantaneously. The results suggest that SKPS produces the second-highest, short and long-term effects on both labor and production, per Euro invested; moreover, the investment of 4.3 thousand euros is retrieved in the first year and increases net employment in one person after four years. Accordingly, the 5 million Euro Budget to invest in sustainable machinery and processing techniques increases net employment by 827 employees.

scholarly journals DETERMINANTS OF BANK PROFITABILITY: A NEW EVIDENCE FROM STATE-OWNED BANKS IN INDONESIA

TRIKONOMIKA ◽  
2020 ◽  
Keyword(s):  
Financial Services ◽  
Impulse Response Function ◽  
Long Term Effects ◽  
Short Term ◽  
Bank Profitability ◽  
Vector Error Correction ◽  
Vector Error ◽  
Short Run ◽  
New Evidence

This paper investigates the factors that determine bank profitability in Indonesia particularly on state-owned banks during the 2007 to 2017. The research applied Vector Error Correction Model (VECM) to measure short-term and long-term effects of independent variable on dependent variable. The research data ini this paper is drawn from two main sources namely Bank Indonesia (BI) and Financial Services Authority (OJK) from 2007 to 2017. The findings showed that in the long term, BOPO, LDR, NPLs, economic growth, and exchange rates have positive relationship toward bank profitability while in the short term, inflation and BI rates do not have effect on bank profitability. However, in the short run, all variables mentioned do not have impact toward banking profitability. In addition, based on Impulse Response Function test, it showed that there are only two independent variables are able to provide a response in case of shock, namely inflation and the exchange rate toward bank’s profitability.

scholarly journals Analisis Pengaruh Kinerja Keuangan terhadap Profitabilitas Bank Syariah di Indonesia

2017 ◽  
Vol 8 (2) ◽  
pp. 175
Author(s):  
Heri Sudarsono
Keyword(s):  
Error Correction ◽  
Error Correction Model ◽  
Third Party ◽  
Vector Error Correction Model ◽  
Correction Model ◽  
Factors Affecting ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run

<p>This study aimed to analyze the factors affecting the amount of profitability (ROA) provided by Islamic banking in Indonesia. The data which is used is taken from the financial report of the Shari’a Bank during the 2011-2016 periods by using montly financial statement This study uses a Vector Error Correction Model (VECM) to see the long-term effect and response to shock that occur in the studied variables. The result shows that in the long run, the percentage Financing (FIN) and BOPO give a positive siqnifikant effect on the ROA, while third party funds (DPK), percentage profit and loss sharing (TBH), financial to deposit ratio (FDR) has negative and siqnificant effect on the ROA. Sertifikat Bank Indonesia Syariah (SBIS) and non performing finance (NPF) have no significant effect on the ROA. In short run, ROA give a negatif and siqnificant effect on the ROA and FDR give a positif and siqnificant effect, while DPK, FIN, SBIS, TBH, NPF and BOPO have no sinificant effect on the ROA. Therfore, shocks that occur in the ROA, FIN, FDR , NPF dan BOPO positively responded by ROA and will be stable in the long term. While the shocks that occur in the percentage of FDR, SBIS and TBH responded negatively by financing and will be stable in the long term.</p><p>Penelitian ini bertujuan untuk menganalisis faktor-faktor yang memengaruhi profitabilitas (ROA) perbankan syariah di Indonesia. Data yang digunakan data bulanan dari laporan keuangan bank syariah periode 2010-2015. Penelitian ini mengunakan Vector Error Correction Model (VECM) untuk melihat dampak jangka panjang dan respon terhadap dampak shock pada setiap variabel terhadap pembiayaan. Hasil olah data menunjukkan bahwa FIN dan BOPO berhubungan positif terhadap ROA, sedangkan DPK, TBH, FDR berhubungan negatif terhadap dan ROA SBIS dan NPF tidak berpengaruh terhadap tingkat ROA. Dalam jangka pendek, ROA berhubungan negatif, tetapi FDR terhadap ROA berhubungan positif. Sedangkan DPK, FIN, SBIS, TBH, NPF and BOPO tidak berhubungan dengan pembiayaan. Di lain pihak, respon pembiayan terhadap goncangan yang terjadi terjadi pada ROA, FIN, FDR, NPF dan BOPO direspon positif oleh ROA. Sedangkan respon ROA terhadap goncangan yang terjadi pada FDR, SBIS dan TBH adalah negatif.</p>

scholarly journals Interaksi Investasi, Dana Pihak Ketiga dan Pembiayaan Perbankan Syariah Terhadap Pertumbuhan Ekonomi di Sumatera Utara

2021 ◽  
Vol 7 (2) ◽  
Author(s):  
Sugianto Sugianto ◽  
Muhammad Yafiz ◽  
Anita Khairunnisa
Keyword(s):  
Economic Growth ◽  
Secondary Data ◽  
Third Party ◽  
Domestic Product ◽  
Islamic Banking ◽  
Domestic Investment ◽  
Vector Error Correction ◽  
Long Run ◽  
Negative Effect ◽  
North Sumatra

Economic growth is a picture to see the progress of economy a country or region, as measured with the amount of data on Gross Domestic Product (GDP) or data on Gross Regional Domestic Product (GRDP). The purpose of this study is to analyze the independence of the variables that affect economic growth, such as Domestic Investment (DI), Foreign Direct Investment (FDI), Third Party Funds (TPF) and Islamic Banking Financing. The research method uses a quantitative approach with secondary data in time series with the Vector Error Correction Model (VECM) methods and uses the help of Eviews 9 program. This study uses a sample from 2010 to 2020. The results of this study indicate that in the long run the variables of DI, FDI and Financing Islamic Banking have a positive and significant effect on the GRDP of North Sumatra, while the TPF Islamic Banking variable has a negative effect on the GRDP of North Sumatra. In the short term, the DI variable significantly affects the FDI. This study suggests that in order to advance the economy of a region, North Sumatra government should encourage and support activities carried out by DI and FDI, as well as financial institutions such as Islamic banking, which are primarily activities in the form of Third Party Funds and financing. The existence of financing disbursed by Islamic banking can provide capital assistance to business actors, so as to increase economic growth.

scholarly journals Long term relationship between exports, gross domestic capital formation, transfer fund allocation, and private investment in Jambi Province

2021 ◽  
Vol 8 (6) ◽  
pp. 631-650
Author(s):  
Sayid Syekh ◽  
Zainuddin Zainuddin
Keyword(s):  
Impulse Response Function ◽  
Private Investment ◽  
Capital Formation ◽  
Vector Error Correction ◽  
Current Period ◽  
Long Run ◽  
Domestic Capital ◽  
Long Time ◽  
The Impact

This study investigates the relationship between Jambi export with gross domestic capital formation, allocation of transfer funds, and private investment, based on the Vector Error Correction Model (VECM). The results show that, both in the short and long term, the gross domestic capital formation, allocation of transfer funds, and private investment can explain changes in Jambi exports. The gross domestic capital formation strongly influences Jambi's export fluctuations compared to other variables. There is a disequilibrium relationship in the short term, and it becomes equilibrium in the long run. Only 69 percent of export changes can be determined in the current period, and the rest is determined in other periods. Likewise, the gross domestic capital formation, only 38 percent, can be determined in the current period, and the rest is determined in other periods. Based on the impulse response function, the impact of export shocks has a large impact on itself. Shocks have a very significant impact and have a long lead to stable levels. Shocks can cause changes in Jambi exports to gross domestic capital formation. Shocks to the formation of gross domestic capital formation require a long time to reach a stable level.

scholarly journals Modelling Respon Rasio Keuangan Terhadap Pembiayaan Pada Bank Syariah Di Indonesia

2017 ◽  
Vol 7 (1) ◽  
pp. 1 ◽  
Author(s):  
Heri Sudarsono
Keyword(s):  
Capital Adequacy ◽  
Third Party ◽  
Factors Affecting ◽  
Vector Error Correction ◽  
Financial Report ◽  
Vector Error ◽  
Long Run ◽  
Long Term Effect ◽  
Short Run

<p align="center"><strong> </strong></p><p><em>This research is meant to analyze the factors affecting the amount of financing provided by Islamic banking in Indonesia. The data which is used is taken from the financial report of the Shari’a Bank during the 2011-2015 periods by using montly financial statement This study uses a Vector Error Correction Model (VECM) to see the long-term effect and response to shock that occur in the studied variables. The result shows that in the long run, the percentage of third party funds (DPK), capital adequacy ratio (CAR), financial deposit ratio (FDR), percentage profit and loss sharing (TBH), give a positive and significant effect on the financing, while BOPO  has negative and significant effect.  Return on asset (ROA) and non perfroming finance (NPF) have no significant effect on the financing. In short run, financing and BOPO give a positive and siqnificant effect on teh financing, then DPK, CAR, FDR, TBH have no sinificant effect on the financing. Therfore, shocks that occur in the financing, ROA, CAR, FDR dan NPF positively responded by financing and will be stable in the long term. While the shocks that occur in the percentage of profit and loss sharing, third party funds, and BOPO responded negatively by financing and will be stable in the long term. </em></p>

scholarly journals Test FOR Dynamic Relationship between Financial Development and Economic Growth in Malaysia: A Vector Error Correction Modeling Approach

2007 ◽  
Vol 9 (1) ◽  
pp. 61 ◽  
Author(s):  
Rosilawati Amiruddin ◽  
Abu Hassan Shaari Mohd Nor ◽  
Ismadi Ismail
Keyword(s):  
Economic Growth ◽  
Error Correction ◽  
Financial Development ◽  
Impulse Response Function ◽  
Vector Autoregressive ◽  
Vector Error Correction ◽  
Dynamic Relationship ◽  
Vector Error ◽  
Error Correction Modeling

This paper purports to study the effectiveness of financial development to Malaysian economic growth utilizing quarterly data. In view of the priority given to dynamic relationship in conducting this study, Vector Autoregressive (VAR) method which encompasses Johansen-Juselius’ Multivariate cointegration, Vector Error Correction Model (VECM), Impulse Response Function (IRF), and Variance Decomposition (VDC) are used as empirical evidence. The result reveals a short-term and long-term dynamic relationship between financial development and economic growth. The importance of financial sector in influencing the economic activity is proven as a clear policy implication.

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