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Journal : Journal of Sustainable Economics

The Determinants of Capital Structure of Islamic Banks in Indonesia, Malaysia, and Brunei Darussalam Hawariyuni, Weni; Suprayitno, Aryadimas
Journal of Sustainable Economics Vol. 1 No. 2 (2023): Journal of Sustainable Economics
Publisher : TALENTA PUBLISHER UNIVERSITAS SUMATERA UTARA

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.32734/jse.v1i2.14323

Abstract

This study is to determine the effect of Profitability, Liquidity, Asset Growth, Bank Size, and Asset Structure on the Capital Structure of Islamic banks in Indonesia, Malaysia, and Brunei Darussalam. The type of research used is descriptive quantitative, which is a descriptive approach with a quantitative approach. The analysis technique used is panel data regression with fixed effect model is the selected model. The population used in this study is Islamic banks in Indonesia, Malaysia, and Brunei Darussalam. The data was collected from Asian Banker website for 27 banks. The sample selected using purposive sampling method was 22 Islamic banks in Indonesia, Malaysia and Brunei Darussalam which consistently published annual reports during 2015-2021 period. Data collection was carried out using secondary data in the form of annual reports of 22 banks during the 2015-2021 period. The results showed that the Profitability and Asset Growth variables had a positive and insignificant effect on Capital Structure, Liquidity had a negative and significant effect on Capital Structure, and Bank Size and Asset Structure had a significant positive effect on Capital Structure.
Sustainability of Islamic Bank Financing across Macroeconomic and Internal Factors Suprayitno, Aryadimas; Susanto, Arva Athallah; Hawariyuni, Weni
Journal of Sustainable Economics Vol. 2 No. 2 (2024): Journal of Sustainable Economics
Publisher : TALENTA PUBLISHER UNIVERSITAS SUMATERA UTARA

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.32734/jse.v2i2.18433

Abstract

The sustainability of Islamic banking financing can be evaluated by examining the dynamics of financing risk, as an escalation in financing risk may lead to significant losses for banks. This study aims to investigate the long-term and short-term effects of internal factors and macroeconomic conditions on the financing risk encountered by Islamic banks in Indonesia. This study utilizes quarterly time series data from 2015 to 2023, with Financing Risk as the endogenous variable and Macroeconomics, Capital, Efficiency, and Bank Performance as the exogenous factors. This study utilizes Autoregressive Distributed Lag (ARDL) analysis technique. The results indicate that, over the long term, internal factors such as capital, efficiency, and performance substantially affect financing risk. Capital exerts a detrimental influence, although both efficiency and the performance of Islamic banks positively affect financing risk. In contrast, macroeconomic factors are found to exert no substantial influence on financing risk. In the short term, capital and efficiency exert considerable effects, with capital adversely influencing financing risk and efficiency favorably improving it. The performance of Islamic banks does not substantially influence financing risk throughout this period. Macroeconomic conditions are observed to positively affect financing risk. This study's conclusions offer significant insights for analysts of Islamic banking risk, facilitating educated short-term and long-term decision-making to more effectively predict variations in financing risks.