Crowdfunding and bank financing: substitutes or complements?

In this paper, we analyze a firm choice between crowdfunding and bank financing. For many entrepreneurs, it is an important issue. We analyze a model where the choice of financing is affected by moral hazard problem regarding the choice of production scale that favors bank financing, and by the uncertainty about market demand that favors crowdfunding. We argue that long crowdfunding campaigns or campaigns with large targets usually are less efficient in mitigating moral hazard problem than small/short campaigns. We also argue that high-quality firms and firms with potentially large markets will tend to select bank financing while projects with largest amount of investment should select mixed financing where the firm uses a short crowdfunding campaign and a bank loan. Most of our model empirical predictions have not been directly tested so far while they are indirectly consistent with available evidence.

Determinants of Muslim Entrepreneurs Decisions 0n Sharia Bank Financing and It's Effect 0n Business Performance

The purpose of this study is to determine the factors that influence the decisions of Muslim entrepreneurs in using Islamic bank financing products and their influence on Business performance in MSMEs. The research method used is the factor analysis method (Exploratory Factor Analysis) and multiple linear regression. The results showed that there are 2 (two) main factors that determine the behaviour of entrepreneurs in using Islamic bank financing, namely external drives, and internal references. A profit-sharing system is the most important factor for customers in deciding to use Islamic bank financing products. The factors of using these financing products have a significant effect on the performance of small and medium enterprises (SMEs) in Southeast Sulawesi, Indonesia

PENGARUH VARIABEL EKONOMI MAKRO TERHADAP PEMBIAYAAN PERBANKAN SYARIAH PERIODE 2010-2018

The purpose of the research is to examine and analyze the effect of macroeconomic variables GDP and inflation on Islamic banking financing in Indonesian. Islamic bank financing is the dependent variable, whereas GDP, reference interest rates, and inflation are the independent variable. The data used is Islamic banking financing, GDP, reference interest rates, and inflation in Indonesian from 2010-1018. This empirical study uses a quantitative approach and method of OLS (Ordinary Least Square). The results of this research indicate that the GDP variable has positive and statistically significant effect on Islamic banking financing, the variable reference interest rates (BI Rate and BI Rate 7days Repo Rate) have negative and statistically significant effect on Islamic banking financing, the inflation variable has positive and statistically significant effect on Islamic banking financing.

Influence of Entrepreneur and Firm Characteristics in Accessing Bank finance

SMEs are mostly guided by the owners’ characteristics which is an indicator of the level of decisions taken in the firm. Access to credit is a prerequisite for a high performance of an SME. The paper aimed at establishing the empirical link between entrepreneurs and firm characteristics and access to bank financing by SMEs in Eldoret town. Descriptive and explanatory research designs were employed in the study. A chi-square test of association was used to determine the relationship between study variables. The study findings indicated that gender and number of employees had a significant influence on access to bank financing. Male entrepreneurs are more likely to get bank financing compared to their female counterparts, while an increase in the number of employees increases the success rate of getting bank financing. However, age, education, business form, number of years of operation, stage of business and average turnover were found to be insignificant in obtaining funding. The study concluded that entrepreneur characteristics namely gender and relation to business and firm characteristics specifically structure of the business, economic sector and the average turnover determines the likelihood of banks financing SMEs. Entrepreneurial and firm characteristics were found to be important in access to bank financing. The study recommended that government and other service providers incorporate additional simplified components to their training packages to cover such areas as bookkeeping and development of business plans. Banks should develop lending policies which are friendly to Small and Medium Enterprise contexts. Keywords: Entrepreneur, firm characteristics, access, bank financing, SMEs

Heterogeneity and state dependence in firms’ access to bank credit

This paper investigates firms’ access to bank credit in eleven euro area countries over the periods 2014–2019. Exploiting firm-level longitudinal data, we analyse loan demand and credit rationing probabilities, accounting for sample selection, unobserved heterogeneity and state dependence. Empirical results show that small and informationally opaque businesses, with deteriorated public support and credit history, face greater difficulties in obtaining bank loans. Furthermore, we provide evidence of a significant degree of state dependence in access to credit. In particular, firms that have already experienced credit restrictions are more likely to face further constraints, while enterprises that applied for bank financing in the past seem to have easier access to credit. Focusing on the subset of firms actually needing additional bank financing, we also find that past credit restrictions significantly reduce their current demand, providing evidence of a significant discouragement effect.

Trade Credit as a Determinant of Firm’s Financial Performance: Moderating Role of Bank Financing

The objective of study is to find out the impact of trade credit on a firm’s financial performance and how this effect diversifies when enterprises acquire bank loans to finance the trade credit channel. To achieve the objective, we employ the data of 6,654 non-financial-sector firms from 12 Asian economies and apply fixed-effects model to estimate the regression. The statistical output of the model provides consistent evidence that the firms that adjust their trade credit activities through bank financing perform better financially. Acquisition of bank loans to expand the trade credit activities is a healthy financial activity because it provides financial setbacks in case of any fluctuation in trade credit. However, acquiring bank loans when firms have no operational need for such types of funds can disturb their financial health. Briefly, the analysis provides novel evidence that efficient usage of bank loans into physical business activities can intensify financial efficiency of corporate firms. The analysis provides financial guidance to corporate managers that before entering into any trade credit terms, they should ensure the availability of bank loans because it provides a strong financial pace against any financial shock.

The Effect of Sharia Bank Financing, Zakat, and Education Expense, on Economic Growth and Human Development Index in Indonesia 2015-2019

<p><em>Islamic bank financing, zakat, and education expenditure can increase Indonesia’s economic growth and Human Development Index (HDI). Islamic bank financing could be funding capital for the community</em><em>. Zakat plays a role in wealth distribution, while education expenditure contributes by improving the quality of human resources. This study analysed the direct and indirect relationship between Islamic bank financing, zakat, and education expenditure to economic growth and HDI. Data were analysed using path analysis based on panel data for the period 2015-2019. The results showed that the Islamic bank financing, zakat and education expenditure had a significant positive effect on economic growth. Islamic bank financing, zakat, and education expenditure had a significant positive impact on HDI. At the same time, the indirect implications showed that Islamic bank financing, zakat, and education expenditure have a significant positive effect on HDI through economic growth.</em></p><p> </p><p>Pembiayaan perbankan syariah, zakat, dan belanja pendidikan menjadi instrumen yang dapat meningkatkan pertumbuhan ekonomi dan di Indonesia. Pembiayaan perbankan syariah dapat menjadi modal pendanaan bagi masyarakat, zakat berperan sebagai penyalur kekayaan, sedangkan belanja pendidikan dapat meningkatkan kualitas sumber daya manusia. Penelitian ini menganalisis hubungan langsung dan tidak langsung antara variabel pembiayaan bank syariah, zakat, dan pengeluaran pendidikan terhadap pertumbuhan ekonomi dan IPM. Analisis data menggunakan path analysis berdasarkan data panel untuk periode 2015-2019. Hasil penelitian menunjukkan bahwa pembiayaan bank syariah, zakat dan belanja pendidikan berpengaruh positif signifikan terhadap pertumbuhan ekonomi. Pembiayaan perbankan syariah, zakat, dan belanja pendidikan berpengaruh positif signifikan terhadap IPM. Sedangkan pengaruh tidak langsung menunjukkan bahwa pembiayaan bank syariah, zakat, dan pengeluaran pendidikan berpengaruh positif signifikan terhadap IPM melalui pertumbuhan ekonomi.</p>

The Impact of Islamic Bank Financing, Government Spending, and Investment on Economic Growth in Indonesia

This study aims to analyze the effect of Islamic bank financing, government spending, and investment on economic growth in Indonesia from 2003 to 2019. A quantitative descriptive methodusing the Vector Error Correction Model (VECM) analysis was applied. The results showed that in the short term, the variables of Islamic bank financing, government spending, and investment did not have a significant effect on economic growth. This shows that these variables require enough time to affect the economic growth. However in the long term, the results showed that Islamic bank financing and investment respectively have a significant, negative effect on economic growth, while government spending has a positive and significant effect on economic growth in Indonesia.JEL Classification: F22, F24, I32, J01, O15How to Cite:Nofrianto, Muliana, Y., & Cahyadi, A. (2021). The Impact of Islamic Bank Financing, Government Spending, and Investment on Economic Growth in Indonesia. Signifikan: Jurnal Ilmu Ekonomi, 10(2), 299-310. https://doi.org/10.15408/sjie.v10i2.20469.

Financial Statement Complexity and Bank Lending

Recent evidence suggests that investors struggle to process complex financial disclosures. Relative to equity and public debt investors, banks have unique advantages in acquiring information and can impose contractual terms to mitigate information frictions. We investigate whether financial statement complexity is associated with firms' reliance on bank financing and the terms of bank loans. We focus on two aspects of complexity, the length of financial reports and the complexity of financial reporting rules. We document that both aspects of complexity are positively associated with firms' reliance on bank financing (i.e., level of debt and new financing). This result is consistent with banks' superior information processing capabilities. Next, we document that banks ameliorate information frictions using loan contractual terms that depend on the source of complexity. Overall, banks are an attractive source of financing for firms with complex disclosures, but banks also increase screening and monitoring for relatively complex borrowers.