Do Financial Inclusion, Debt Behavior Affect Business Investment? Study in Small Medium Enterprise Customers of Bank BPD Yogyakarta Indonesia

Bank, financial inclusion, debt behavior, and business investment greatly affect the economic growth of a region industry. The main purpose of this research is to examine the effect of bank behavior, financial inclusion, debt behavior on investment decisions of Micro, Small and Medium Enterprises customers at Bank BPD Yogyakarta, Indonesia. The research sample is BPD Yogyakarta customers Respondents as 200 entrepreneurs are customers who are in debt for business investment. The analysis model uses mediation regression with PLS. The results showed that bank behavior had a positive effect on financial inclusion. Bank behavior has a positive effect on debt behavior. Financial inclusion has a positive effect on business investment. Debt behavior has a positive effect on business investment. Financial inclusion, debt behavior mediates the influence of bank behavior on business investment. The implication of this research is that a clear bank behavior and high commitment of banks are needed in offering bank products. It takes commitment and supervision from the Bank in providing credit to customers so that the use of funds is in accordance with investment objectives.

Do Financial Inclusion, Debt Behavior Affect Business Investment? Study in Small Medium Enterprise Customers of Bank BPD Yogyakarta Indonesia

Bank, financial inclusion, debt behavior, and business investment greatly affect the economic growth of a region industry. The main purpose of this research is to examine the effect of bank behavior, financial inclusion, debt behavior on investment decisions of Micro, Small and Medium Enterprises customers at Bank BPD Yogyakarta, Indonesia. The research sample is BPD Yogyakarta customers Respondents as 200 entrepreneurs are customers who are in debt for business investment. The analysis model uses mediation regression with PLS. The results showed that bank behavior had a positive effect on financial inclusion. Bank behavior has a positive effect on debt behavior. Financial inclusion has a positive effect on business investment. Debt behavior has a positive effect on business investment. Financial inclusion, debt behavior mediates the influence of bank behavior on business investment. The implication of this research is that a clear bank behavior and high commitment of banks are needed in offering bank products. It takes commitment and supervision from the Bank in providing credit to customers so that the use of funds is in accordance with investment objectives.

The Impact of Bank Behavior, Financial Literacy on Investment Decisions, Mediation of Financial Inclusion and Debt Behavior. Study on Working Capital and Investment Debtors at Regional Development Bank Yogyakarta Indonesia

Bank behavior, financial literacy, financial inclusion, debt behavior, and investment affect the economic growth of an industry. The purpose of this research is to examine the effect of bank behavior, financial literacy, financial inclusion, debt behavior on investment decisions of working capital and investment debtors in the Regional Development Bank of Yogyakarta. Indonesia. Examine the mediating role of financial inclusion, debt behavior on investment decisions. The research sample are 280 debtors. The analysis model used mediation regression with the PLS program. The results showed that: Bank behavior has an effect on financial inclusion. Bank behavior has an effect on debt behavior. Financial literacy has an effect on financial inclusion. Financial literacy has an effect on debt behavior. Financial inclusion mediates the effect of bank behavior on investment decisions. Debt behavior mediates the effect of financial literacy on investment decisions. The managerial implication of this research is: the flexibility of providing credit to customers, must be followed by control of the use of funds. Financial literacy, financial inclusion and higher debtor debt behavior will increase the movement of the industry. The right investment will improve entrepreneurial and banking performance.

The Role of Audit Firms in Spreading Depositor Contagion

Auditor credibility is important in the banking industry due to the opacity of bank assets and the use of financial statements by external parties to facilitate monitoring. Depositors monitor and discipline bank behavior, but they can also contribute to the spread of shocks from one bank to another. We argue that depositors perceive bank failure as an audit failure, which reduces their assessment of auditor credibility. We document that exposure to failure through the audit firm is associated with lower uninsured deposit growth following the failure, consistent with depositors perceiving failures as a negative signal of auditor credibility. We further document that this association is stronger when depositors perceive connection to failure to reflect a pervasive issue within the audit firm. Collectively, our results suggest that depositors consider accounting signals at other banks in assessing financial reporting credibility.

USING A VAR MODEL TO INVESTIGATE WHICH FACTORS DETERMINE NON-PERFORMING LOANS: FROM THE PERSPECTIVE OF BANK BEHAVIOR THEORY

Purpose: At present, the credit quality of commercial banks has greatly deteriorated. With the simultaneous rising of the non-performing loan balance and non-performing loan ratio (NPLR), a new round of market-oriented reform is needed in commercial banks. This paper builds upon previous studies to investigate the causes of non-performing loans and their impacts on macroeconomics and microeconomics. Methodology: A conceptual model is developed and empirically tested based on 4 waves of a longitudinal survey of 360 banks in China (2007-2018). A Granger causality test is carried out with a vector autoregression (VAR) model empirical analysis for a stationary time series along with an impulse response analysis for the various variables to measure the influence and contribution rate of each of the identified five factors. Main Findings: The empirical results show that the non-performing loan ratio (NPLR) is positively correlated to the commercial bank’s net interest margin (NIM) and its proportions of state-owned holding (GYCG). However, the non-performing loan ratio (NPLR) is negatively correlated to the capital adequacy ratio (CAR), the provision coverage ratio (PC), and the cost-income ratio (CIR). Implications/Applications: The results can provide new insights for bank managers to benefit the long-term effectiveness of decreasing NPLR: bank managers should establish a unified risk supervision mechanism and improve their banks’ risk management system so that the banks can strengthen their credit management systems and their securitization of bad asset certificates. Novelty/Originality of this study: This paper contributes to the theory of non-performing loan ratio (NPLR) by conceptualizing new constructs from bank behavior theory and find that government intervention indirectly affects a bank’s NPLR mainly through the bank state-owned holding (GYCG).

Remodelling Macroeconomic Trilemma and Central Bank Behaviour in Nigeria: A Markov-Switching Approach

This study investigates macroeconomic trilemma and Central Bank behavior in Nigeria. The period of investigation spans the quarterly period of 1981–2017. Upon the data stability condition of Zivot-Andrew unit-root test with structural breaks, the Markov Switching Dynamic Regression was employed as the technique of analysis. With a validated trilemma hypothesis, the study found that the trilemma constraints hold for the Nigerian economy but at the expense of the autonomy of the monetary authority. Being the policy variable of the Central Bank of Nigeria, the exchange rate was found to follow two regimes of fixed and managed-float regimes. The results also showed that political risk was found insensitive to the regimes of exchange rate while the foreign sector was considered as a moderating factor for the behavior of the monetary authority; irrespective of the exchange rate regime.JEL Classifications: F41, E32, E52, C22, E58.

Financial misconduct in Indian banks: what matters and what doesn’t?

Purpose While several facets of financial misconduct have been explored, one aspect which has largely bypassed the attention of researchers is the factors affecting such misconduct behavior in banks. To investigate this in detail, this paper aims to use disaggregated data on Indian banks for an extended period to understand the factors driving such behavior. Design/methodology/approach Given the longitudinal nature of the data, the author uses fixed effects regression methodology which enables us to control for unobserved characteristics that might affect the dependent variable. Findings The analysis indicates that both bank- and board-specific factors are important in driving financial misconduct, although their importance differs across ownership. In particular, while size and capital are relevant for public banks, liquidity is more of a concern for private banks as compared with their public counterparts. In addition, the relevance of bank boards is important only in case of private banks. These results hold after controlling for the structure of the banking industry and the macroeconomic environment. Originality/value To the best of the author’s knowledge, this is one of the earliest studies for India to carefully examine the interface between financial misconduct and bank behavior in a systematic manner.

The long road to accommodative central banking: the US case

For Basil Moore and post-Keynesians who have followed him in developing the theory of endogenous money, accommodative central-bank behavior is a logical necessity in credit-money economies. Such central banks have no choice but to accommodate the banking system's demand for liquidity. Accommodative central banking evolved through a historical process, as this paper shows for the specific case of the US economy. The road to accommodative central banking was a long one in the US, marked by failed experiments with alternative institutional regimes: the Second Bank of the US of the early national period, the urban clearing-houses of the late nineteenth century, and the early Federal Reserve.