The International Financial Reporting Accounting Standards (IFRS) of financial instruments were implemented in 2010. It was found to have major impacts on risk transparency of the banking industry in Indonesia. This study examines the impact of IFRS of financial instruments on market discipline of banks in Indonesia. Data from the study period between 2007 and 2013 was analysed, and findings show an increase in market discipline after the implementation of the IFRS of financial instruments. Specifically, the quality of loan loss provision information and the disclosure of financial instruments based on IFRS in financial statements had improved market discipline among Indonesian banks. The study therefore, concludes transparency of risk information in financial statements enhances the ability of bank stakeholders to perform monitoring functions, which in turn enables effective market discipline.
This study examines the impact work-life balance, motivation, and personality of owners of micro and small enterprise (MSE) on their business performance in Greater Jakarta area. A total of 152 micro and small enterprise was surveyed and data was analysed using SPSS 23.0 software. Results indicate work-life balance does not have an influence on MSE performance, whereas motivation and personality do.
Micro and small enterprises, motivation, performance, personality, work-life balance
This study analyse microcredit loan price and size in the Indonesian retail trade sub-sector using data from 2015. The aim is to find out if micro enterprises (MEs), as debtors, are harmed in microcredit transactions with Microfinance Institutions (MFIs). It was found that MEs are harmed if the percentage of the loan price increase exceeds that of the loan size, from the first to the second loan. The behaviour of MFIs is also investigated. This study uses the ME as a unit of analysis and examined 400 MEs from all provinces in Indonesia. A non-probabilistic sampling technique was used to identify the MEs while three types of MFIs were examined: cooperatives, Baitul Maal wat Tamwils (BMTs), and others. Most microcredit transactions, except 'between MEs and MFIs' in the 'others' group, did not have a loan price movement that was greater than that of their loan size. Consequently, most MEs were not harmed by microcredit transactions with MFIs.
This paper focuses on the relationship between entrepreneurs' competencies and innovation arguing that age and education play an important role in moderating this relationship. Data on entrepreneurial activities was analysed using Global Entrepreneurship Monitor â€“ GEM framework. The GEM model identifies key elements of the relationship and interaction between entrepreneurship and economic growth. It defines entrepreneurship as consisting of three main components: entrepreneurial framework conditions, entrepreneurial competencies and aspirations, and the phase of entrepreneurial activities. This study uses the 2013 individual level data of ASEAN countries in the GEM consortium. Using multiple regression modelling, research findings indicate that competencies enhance innovation, higher education reduces innovation, early entrepreneurs are more innovative than established business owners, and young entrepreneurs are generally more innovative, but the interaction between age and competency would lead to stronger innovation.
Entrepreneurial competency, entrepreneurial phase, GEM model, innovation, regression model
Strategic management practices and their influence on entrepreneurship in family businesses are receiving increasing attention from scholars. Yet, few studies have hitherto investigated such practices in the context of large family business groups with unique characteristics, i.e. the presence of a corporate centre that handles corporate strategy in a business group and the presence of family management that affects strategic decision-making processes concerning entrepreneurship and innovation, both at the corporate level and the business unit level. This paper aims to explore and analyse the influence of corporate parenting style of corporate centres in strategic planning, strategic control and financial control as well as family influence factors on business unit entrepreneurial orientation (EO) and business unit strategic initiatives, which in turn affect business unit performance. The study applies a structural equation model (SEM) to a sample of 106 respondents who are CEOs and senior management officers in business units managed by 16 corporate centres of family business groups in Indonesia. The results suggest that the presence of corporate centres and family influence affect business unit performance through influencing EO and strategic initiatives. The corporate parenting role played by corporate centres differentially influences EO and strategic initiatives in business units. Moreover, family influence has a positive impact on EO and business units' strategic initiatives. At the business unit level, it is found that EO does not exhibit a direct relationship with performance, but its influence on performance is positive whenever EO has been implemented in the form of strategic initiatives.
Corporate centres, entrepreneurial orientation, family business groups, family influence, strategic initiatives
Successful organisational change begins with employees, in which employees become the core of organisational change, especially in cases of divergent organisational change which could represent a matter of life and death for the organisations. Literature on theory of power had identified personality, personal mastery, and network centrality as central to organisational change. Having this power, however, does not guarantee that people within the organisations have desire to participate actively to facilitate that change. This study examines how personality could increase employees engagement in organisational change through the mediation effect of personal mastery and network centrality. This research was conducted in a state-owned Indonesian energy enterprise, included 155 respondents, and data was analysed using structural equation modelling. The results of this research confirm that personal mastery and network centrality mediate the effect of personality on employee engagement to achieve organisational change. Network centrality in particular, has a greater effect on employee desire to change. The study concludes with a discussion of the findings, managerial implications and limitations.
Engagement to change, network centrality, personality, personal mastery
This study examines how Indonesia's hotel industry responds to environmental sustainability pressure and how dynamic managerial capabilities play a significant role in defining environmental proactiveness as a proxy of strategic response and its impact on a firm's performance. This will be done using a model that integrates institutional theory, resource dependence theory, and cognitive theoretical perspectives. The findings of this study indicate that stakeholder pressures perceived by hotel managers have a positive impact on hotels' environmental proactiveness through the mediating effect of dynamic managerial capabilities. This current study also finds a strong and positive relationship between environmental proactiveness and firm performance. Drawing from the results, research contributions, managerial implication, policy implication, and future avenues of inquiries for researchers are provided.
This research aims to investigate whether information risk and liquidity become yield spread determinants of Indonesian corporate bond market. This study uses market microstructure approach. Previous research had revealed the impact of Volatility Model or the information effect on transaction (Balduzi et al., 1999; Brandt & Kavajecz, 2004; Green, 2004) and the sequential trade models used by Easley et al. (2002). In this research, information risk is measured by Probability of Informed Trading (PIN) model, liquidity is measured using Lesmond-Ogden-Trzcinka (LOT) model, and the Pastor and Stambaugh model is used to measure systematic liquidity risk. Using intraday transaction data of Indonesian corporate bonds during 2006-2011, all three main variables were found to influence Indonesian corporate bond yield spread. The average PIN of Indonesian corporate bonds is 7.98%, which is lower than that of the US market. The average LOT for the Indonesian corporate bond is 310 bps, which is less than that of the US market, and investor demand of illiquid bonds is more sensitive to systematic liquidity than liquid bonds.
Indonesian corporate bond, information risk, Probability of Informed Trading, systematic liquidity, yield spread
Small and Medium Enterprises (SMEs) play an important role in the Indonesian economy. Not only do they generate jobs, they also nurture a culture of innovation and entrepreneurial skills that enable small firms manage economic downturns with minimal fallouts. Because of the SMEs' unique management characteristics and mixed business-personal goals, they are an interesting subject of research. This study examined if the strategy of SMEs executed by owner-managers affected their performance (financial/economic vs. non-economic). One of the strategies pursued by SMEs is a differentiation strategy, characterised by a unique product that is hard to imitate and results in customers' willingness to purchase goods or services at higher prices. Using a small sample size and applying SEM-PLS, this research attests to the strategic role of owner-managers for achievement of their non-economic goals, but not the SMEs' economic/financial goals. These results imply the presence of non-financial goals that may be considered to be important or perhaps more important than the financial goals. Small sample size and self-assessed performance measures are among the limitations of this research.
Financial goals, non-financial goals, owner-manager, small enterprise, strategy
This study was aimed at examining the impact of entrepreneurial proclivity on business performance of SMEs in West Sumatera, Indonesia. The moderating variables of this study were role of market and technology turbulence. Data was collected from survey of selected managers or owners of SMEs and later analysed using Moderated Regression Analysis (MRA). Findings show dimensions of entrepreneurial proclivity have significant effects on business performance. There is no significant moderating effect of the role market and technology turbulence on entrepreneurial proclivity of SMEs. Therefore, this study contributes to literature by highlighting the relationship between entrepreneurial proclivity and business performance. Managerial implications are discussed as well.
Business performance, entrepreneurial proclivity, market and technology turbulence, SMEs
This paper examines the dynamic correlation between oil volatility and five ASEAN stock markets using the DCC-GARCH approach. The oil volatility index (OVX or CBOE crude oil volatility index) was used and realised variance (RV) derived from WTI (West Texas Intermediate) crude oil prices. The aim was to examine optimal oil volatility measures between these proxies and to investigate the OVX index as a volatility measure for emerging countries. Findings show that both proxies had a negative correlation to these stock markets between 2007 and 2017, with the exception of the Philippines' stock market. Furthermore, results suggest RV is still a better measure compared with OVX for ASEAN-5 stock markets.
The Islamic capital market is a capital market selling Islamic stocks, and is traded based on Islamic principles. Currently, there are many capital markets providing Islamic stock. Islamic capital market concepts have been developed by a number of experts, such as Metwally (1992), Chapra (1992), and Taj-El-Din (2002). This study aims to create a model of investing in Islamic capital markets. It tests whether existing Islamic capital market models are adequate. The results of these tests show that Metwally's model is quite attractive in terms of return and risk, but is constrained by technical problems relating to capital markets that do not allow trade restrictions, as required by Metwally. In contrast, the Chapra model has no constraints in implementation, but its appeal does not consistently outperform or match existing capital market models. Therefore, the study will also examine Islamic capital market models that are both attractive to investors and can be effectively implemented. Findings of this research show the Islamic capital market model using a long-term investment strategy is an attractive option, and proves that investments over longer periods will generally yield higher annualised returns. The annual investment yields the greatest returns, followed by the period of a semester, and then quarterly. Investors who do not have large amounts of cash will generally only invest in certain stocks to serve as their portfolio. The strategy of selecting stocks based on price-to-book ratio (PBR) is quite successful in generating higher return/risk.
Islamic capital market models, long-term investment strategy, price to book ratio, stock return
This study assesses the impact of sovereign bond and sukuk market (Islamic bond market) development, as one of Indonesia's financing instruments, on the growth of its economy and vice versa. It uses the 2009-2016 quarterly longitudinal data of outstanding bond and sukuk as a proxy of the size of the bond and sukuk markets, as well as the GDP of Indonesia as a proxy of the size of its economy. The VAR model and granger causality test were used to determine the direction of causality while Impulse Response Function and Variance Decomposition analysis measured the impact of shock on each variable of the economy. The results show that only sovereign sukuk has a positive impact on the Indonesian economy which means it is more productive compared with the conventional sovereign bond.
In Indonesia, SMEs contribute to approximately 60% of its GDP. The SMEs strengths and limitations however, differ from that of established companies. The primary aim of this study is to find out how to maximise SME marketing performance by examining its entrepreneurial marketing dimensions and marketing strategy clusters. Based on data from 130 SME in Indonesia, the study identified seven entrepreneurial marketing and five marketing strategy clusters. Using the profile deviation of the concept of fit, it is indicated that traditional marketers cluster which combined proactive orientation, will result in maximum market growth while the mass marketers cluster (i.e., customer-focus orientation) will result in maximising profitability.
This study investigates the relationships between capital buffer and bank stability among commercial banks in Indonesia during the period 2001 to 2015. The scope of this study is before and after the 2007-2008 financial crisis and the implementation of Basel II and Basel III in Indonesia's banking sector. By using dynamic panel regression, the estimation indicates that improvement of the capital buffer will enhance bank stability. Furthermore, bank market power, revenue diversification, and size have a positive impact on boosting bank stability. Hence, this study offers insights into the role of capital buffer in supporting bank stability.
This paper examines the effects of website quality and navigation experience on the atttitude and online purchase intention of Muslims women. Website service quality consists of transaction-related services and pre-purchase services. Data was obtained from 318 respondents aged at least 17 years and analysed via descriptive analysis and partial least-squares. The results indicate that transaction-related services and pre-purchase services significantly influence navigation experience, which, in turn, influences customer attitudes and online purchase intentions.
This paper aims to identify the internal attributes of a firm that act as mediators by integrating research on Entrepreneurship, Strategic Management, and Project Management. Previous research shows that entrepreneurial orientation and capabilities are important attributes that mediate the relationship between institutional context and project level. Project in this paper refers to a strategic project - a bundle of activities that are intended to achieve a business goal of a firm. Thus, project performance has a broader definition in this case. Six hypotheses of the research model were analysed using Structural Equation Modelling (SEM). The specific context of the renewable energy power generation industry is chosen to confirm the research model. This industry is highly regulated; the government has a critical role in creating and shaping the market. In this industry, the return of capital is regulated, and there is only one buyer. The units of analysis are Independent Power Producers (IPPs), which are project-based companies dedicated to building, operating and maintaining power generation projects. Structural model analysis shows that only four hypotheses are supported by data. Findings indicate the relationship between government policies and project performance is mediated by two firm attributes: entrepreneurial orientation and network capability. Further study is needed for an indepth understanding of the relationship between project management capability and project performance.
Entrepreneurial orientation, government policies, project performance, resource orchestration
This study is an extension of earlier research on the effect of perceived justice and perceived loss on customer satisfaction during service recovery after service failure. Variables that are likely to impact customer behaviour in the future (trust and (non) intention to switch), once a customer is satisfied with the remedy are identified. Data was obtained from 242 respondents who had experienced service failure, from among customers of a prepaid card of the cellular company, PT.X. The approach used are convenience sampling and snowball sampling. Quantitative data analysis was performed using Structural Equation Modeling (SEM) was and results showed that all variables had a positive effect; the coefficient of determination was shown in the distributive justice, meaning that distributive justice was the biggest variable with a positive and significant effect compared with other variables in this study. Although the 'perceived loss' variable had a positive value, its weightage was lesser than other variables. The SEM test results showed that the combined variables in this research, distributive justice, procedural justice, interactional justice, and the perceived loss, have a positive and significant impact on customer satisfaction in service recovery. The variables also have an impact on trust and switching intention. Therefore, in order to increase trust and reduce switching intention, it is important to consider the strongest variables that influence customer satisfaction.
Perceived loss, perceived justice, satisfaction, service recovery, switching intention, trust
This research aims to first, determine the correlation between the stock market and financial stability. Second, to determine the correlation between stock market and liquidity availability. Both are conducted in the implementation period of quantitative easing of US in 2008. The research is conducted in eight countries: United States, Indonesia, Malaysia, Thailand, Brazil, Russia, India, and Latin America. The national composite index for each country was used to capture the condition of stock market as a dependent variable. The VIX was used as a proxy o financial market stability in the US, and TED spread as a proxy for liquidity availability. Sample will be divided into three different periods based on the implementation of QE1, QE2, and QE3. The DCC model was employed in this research to capture the dynamic movement between variables studied. Results show there are stronger significant influence on VIX correlation with stock indexes in US, Indonesia, Thailand, Brazil, India, and Latin America rather than the correlation on TED spreads, which is only found significant in Russia in the QE1 period. This indicates financial stability affecting investor choice of investment.