Articles
<![CDATA[Investigating the Determinants of Islamic Banks’ Financing Quality: A Regional Approach ]]>
<![CDATA[Fakhrunnas, Faaza]]>;
<![CDATA[Anto, M. B. Hendrie]]>
<![CDATA[ International Journal of Islamic Economics and Finance (IJIEF) Vol 7, No 1 (2024): IJIEF Vol 7 (1), January 2024 ]]>
Publisher : <![CDATA[Universitas Muhammadiyah Yogyakarta ]]>
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DOI: 10.18196/ijief.v7i1.18532
<![CDATA[The quality of Islamic banks’ financing is pivotal to determine the banking performance. When an Islamic bank has good quality of financing activities, the bank can generate more financial return due to less exposure to bad financing. This study aims to investigate the determinants of Islamic banks’ financing quality by considering the regional approach. The study utilized non-performing financing as the proxy of bank’s quality financing. The dependent variables consisted of inflation, financing growth, financing to deposit ratio, and asset. In addition, dummy variables were used to identify the period of the COVID-19 pandemic and the regional effect in Java and other regions outside Java. By adopting panel data analysis, this study observed 33 provinces in Indonesia from January 2004 to October 2021. The findings of the study revealed that the determinant of Islamic banks’ financing quality in consumption scheme was different from equity and investment schemes. Moreover, only Islamic banks’ financing quality in consumption scheme had exposure to inflation risk. Regional influence was present in all sorts of financing schemes at the time the COVID-19 pandemic significantly impacted financing quality in investment and consumption schemes. This study suggests that Islamic banking practitioners and financial authorities should understand the different behavior of each financing scheme in order to maintain Islamic banks’ financing quality.]]>
<![CDATA[Examining Indonesian Stock Price Movement Amid COVID-19 Pandemic: Which Sectors that Underperformed the Most? ]]>
<![CDATA[Fakhrunnas, Faaza]]>;
<![CDATA[Ramadhani, Almadita]]>
<![CDATA[ Jurnal Economia Vol. 20 No. 2 (2024): June 2024 ]]>
Publisher : <![CDATA[Faculty of Economics and Business, Universitas Negeri Yogyakarta in collaboration with the Institute for ]]>
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DOI: 10.21831/economia.v20i2.43390
<![CDATA[AbstractThe stock market is a financial market that is highly responsive to changes in economic conditions. Therefore, the stock market normally reflects the current economic conditions. This study discusses the effect of the COVID-19 pandemic on the Indonesian stock exchange in several industrial sectors. Using the event study method, this study utilized a time-series data over a five-month period starting from December 2019 to April 2020. To examine the short-run and long-run impact among the observed variables, this study also applied the ARDL (Autoregressive Distributed Lag). The findings showed that the COVID-19 pandemic affected stock performance, particularly in trade, service and investments, and agricultural sectors, all of which experienced a negative return on the day of the first announcement of the COVID-19 positive cases. In addition, the outbreak evidently influenced the cumulative abnormal return in the short run, but not in the long run. Keywords:Stock Market, COVID-19 pandemic, Event Study, ADRL, Cumulative Abnormal Return]]>
<![CDATA[The Determinants of Islamic Banks’ Non-Performing Financing in the Small-Medium Enterprises (SMEs) Sector ]]>
<![CDATA[Fakhrunnas, Faaza]]>;
<![CDATA[El Hasanah, Lak Lak Nazhat]]>
<![CDATA[ Jurnal Ekonomi & Studi Pembangunan Vol 23, No 2: October 2022 ]]>
Publisher : <![CDATA[Universitas Muhammadiyah Yogyakarta ]]>
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DOI: 10.18196/jesp.v23i2.15562
<![CDATA[The performance of Islamic banks in financing activities is determined by many factors, including macroeconomic variables and internal factors, such as the financial performance of the bank. The study investigates the determinant of non-performing financing (NPF) of Islamic banks in Indonesia, particularly in Small-Medium Enterprises (SMEs) sector. Adopting the panel data analysis, the data comprise 33 provinces in Indonesia starting from 2016m1 to 2021m07, equal to a 2211 observation period. The study reveals that the size of the bank’s asset and financing to deposit ratio (FDR) of Islamic banks has a significant relationship to NPF value in SMEs sector, and the impact remains unchanged in the period before and during the COVID-19 pandemic. From the regional viewpoint, the size of the bank’s assets also has a significant influence on NPF in the provinces located in Java but not outside of Java. As a policy implication, the study suggests that the size of a bank’s assets must be enhanced with prudent risk management in financing activities in the SME sector. Surely, the policy can be implemented in a top-down approach through government and financial authority; then it also can be applied bottom-up approach through the bank’s business activities. Finally, as the limitation of the research, the study only utilizes limited variables and uses a single-country analysis which can be improved and extended for future study.]]>
<![CDATA[Investigating the Determinants of Islamic Banks’ Financing Quality: A Regional Approach ]]>
<![CDATA[Fakhrunnas, Faaza]]>;
<![CDATA[Anto, M. B. Hendrie]]>
<![CDATA[ International Journal of Islamic Economics and Finance (IJIEF) Vol. 7 No. 1 (2024): IJIEF Vol 7 (1), January 2024 ]]>
Publisher : <![CDATA[Universitas Muhammadiyah Yogyakarta ]]>
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DOI: 10.18196/ijief.v7i1.18532
<![CDATA[The quality of Islamic banks’ financing is pivotal to determine the banking performance. When an Islamic bank has good quality of financing activities, the bank can generate more financial return due to less exposure to bad financing. This study aims to investigate the determinants of Islamic banks’ financing quality by considering the regional approach. The study utilized non-performing financing as the proxy of bank’s quality financing. The dependent variables consisted of inflation, financing growth, financing to deposit ratio, and asset. In addition, dummy variables were used to identify the period of the COVID-19 pandemic and the regional effect in Java and other regions outside Java. By adopting panel data analysis, this study observed 33 provinces in Indonesia from January 2004 to October 2021. The findings of the study revealed that the determinant of Islamic banks’ financing quality in consumption scheme was different from equity and investment schemes. Moreover, only Islamic banks’ financing quality in consumption scheme had exposure to inflation risk. Regional influence was present in all sorts of financing schemes at the time the COVID-19 pandemic significantly impacted financing quality in investment and consumption schemes. This study suggests that Islamic banking practitioners and financial authorities should understand the different behavior of each financing scheme in order to maintain Islamic banks’ financing quality.]]>
<![CDATA[ESG AND BANKING PERFORMANCE IN EMERGING AND DEVELOPING COUNTRIES: DO ISLAMIC BANKS PERFORM BETTER? ]]>
<![CDATA[Fakhrunnas, Faaza]]>;
<![CDATA[Kenc, Turalay]]>;
<![CDATA[Hengchao, Zhang]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol 11 No 1 (2025) ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v11i1.2429
<![CDATA[This paper investigates the effects of Environmental, Social, and Governance (ESG) implementation on banking performance in emerging and developing countries. Applying the Two-step System Generalized Method of Moments (System-GMM) to panel data of 179 banks across 29 countries spanning 2016-2022, we find that ESG implementation significantly enhances overall banking profitability. However, when we assess the implications of ESG on Islamic banks, we find that overall ESG commitment significantly reduces profitability. As for the individual ESG pillar, we note the profit-enhancing effect of environmental pillar on both Islamic and conventional bank profitability. Some evidence is also uncovered for the significant positive effect of social pillar on conventional bank profitability. Finally, we note no significant influences from governance pillar. These results highlight the divergent impacts of ESG implementation on Islamic and conventional banks. We conclude that policymakers should exercise caution in designing and implementing ESG policies, ensuring they are tailored to promote optimal performance across different banking models. This study contributes to the growing body of the literature on sustainable finance and provides valuable insights for regulators and bank managers in emerging and developing economies.]]>
<![CDATA[Environmental commitment and Islamic bank performance: Does management quality matter? ]]>
<![CDATA[Fakhrunnas, Faaza]]>;
<![CDATA[Anto, MB Hendrie]]>
<![CDATA[ Asian Journal of Islamic Management (AJIM) VOLUME 7 ISSUE 1, 2025 ]]>
Publisher : <![CDATA[Faculty of Business & Economics, Universitas Islam Indonesia ]]>
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DOI: 10.20885/AJIM.vol7.iss1.art4
<![CDATA[Purpose – This study investigates the impact of Islamic banks' environmental commitment on their financial performance. In addition, the moderating role of management quality is employed to assess whether it affects the nexus of environmental commitment and Islamic banks’ financial performance. Methodology – The sample of the study consists of 32 Islamic banks from 12 countries with sufficient environmental commitment reports from 2016 to 2023. A panel data approach is adopted to estimate the models in this study, namely the random effects model (REM), 2-Stage Least Squares (2SLS), and Least Squares Dummy Variable Corrected (LSDVC).Findings – The findings reveal that Islamic banks' commitment to environmental activities supports their financial performance. In addition, the management quality of Islamic banks moderates the relationship between environmental commitment and financial performance. The findings of this study are robust after conducting estimations to check the consistency of the results using several econometric scenarios. Implication – The findings imply the urgency to embrace, practice, and develop environmental commitment in Islamic banking. It can be implemented by policymakers and regulators to spur and demand that Islamic banks have sufficient environmental commitment while operating them. Originality – This study contributes to the precise examination of inconclusive findings on the nexus between environmental commitment and financial performance in global Islamic banks. Moreover, it highlights the role of management quality in the nexus between environmental commitment and financial performance, which remains understudied in prior literature.]]>
<![CDATA[ESG AND BANKING PERFORMANCE IN EMERGING AND DEVELOPING COUNTRIES: DO ISLAMIC BANKS PERFORM BETTER? ]]>
<![CDATA[Fakhrunnas, Faaza]]>;
<![CDATA[Kenc, Turalay]]>;
<![CDATA[Hengchao, Zhang]]>
<![CDATA[ Journal of Islamic Monetary Economics and Finance Vol. 11 No. 1 (2025) ]]>
Publisher : <![CDATA[Bank Indonesia ]]>
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DOI: 10.21098/jimf.v11i1.2429
<![CDATA[This paper investigates the effects of Environmental, Social, and Governance (ESG) implementation on banking performance in emerging and developing countries. Applying the Two-step System Generalized Method of Moments (System-GMM) to panel data of 179 banks across 29 countries spanning 2016-2022, we find that ESG implementation significantly enhances overall banking profitability. However, when we assess the implications of ESG on Islamic banks, we find that overall ESG commitment significantly reduces profitability. As for the individual ESG pillar, we note the profit-enhancing effect of environmental pillar on both Islamic and conventional bank profitability. Some evidence is also uncovered for the significant positive effect of social pillar on conventional bank profitability. Finally, we note no significant influences from governance pillar. These results highlight the divergent impacts of ESG implementation on Islamic and conventional banks. We conclude that policymakers should exercise caution in designing and implementing ESG policies, ensuring they are tailored to promote optimal performance across different banking models. This study contributes to the growing body of the literature on sustainable finance and provides valuable insights for regulators and bank managers in emerging and developing economies.]]>
<![CDATA[The impact of bank’s diversity and inclusion index on profitability: evidence from Indonesia and Malaysia ]]>
<![CDATA[Tumewang, Yunice Karina]]>;
<![CDATA[Fakhrunnas, Faaza]]>;
<![CDATA[Ardiami, Kinanthi Putri]]>
<![CDATA[ Journal of Contemporary Accounting Volume 6 Issue 1, 2024 ]]>
Publisher : <![CDATA[Master in Accounting Program, Faculty of Business & Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia ]]>
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DOI: 10.20885/jca.vol6.iss1.art4
<![CDATA[This study aims to investigate the effects of the Diversity and Inclusion Rating (DIR) score on profitability, comparing conventional and Islamic banks. Employing the available data on DIP and ESG (Environmental, Social, and Governance) scores from the Refinitiv database, this study took a dataset of 100 firm-year observations which consists of both conventional and Islamic banks in Indonesia and Malaysia. We conducted a random-effect regression model with the inclusion of some appropriate control variables as well as year and country dummies. The findings of this study prove that there is a positive and significant association between DIR and both profitability ratios of ROA and ROE. Meanwhile, for Islamic banks, DIR is negatively related to ROA and ROE for several reasons explained in this study, including the partial misalignment of conventional Diversity & Inclusion proxy with Sharia principles.]]>
<![CDATA[Non-linear Effect of Islamic Banks' Liquidity Risk to Financial Stability; Evidence from the Indonesian Banking Industry ]]>
<![CDATA[Fakhrunnas, Faaza]]>
<![CDATA[ Muqtasid: Jurnal Ekonomi dan Perbankan Syariah Vol 14, No 1 (2023): MUQTASID: Jurnal Ekonomi dan Perbankan Syariah ]]>
Publisher : <![CDATA[UIN Salatiga ]]>
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DOI: 10.18326/muqtasid.v14i1.1-15
<![CDATA[Liquidity risk is a pivotal aspect that determines the soundness of financial performance in the banking system. Therefore, the study aims to examine the influence of Islamic banks' liquidity risk on banking stability. Using time series data ranging from 2004m1 to 2022m8, the study adopts a non-linear autoregressive distributed lag (NARDL) approach to examine the influence of liquidity risk on financial stability in the Indonesian banking sectors. The result of the study reveals that it has a non-linear and asymmetric relationship between liquidity risk and financial stability in the banking system. In the short run, an additional increase/decrease in the change of liquidity risk negatively affects financial stability. In addition, the long-run relationship shows that only an additional increase in change has a negative and significant relationship to financial stability. The COVID-19 pandemic also becomes a significant determinant that affects financial stability in the long-run relationship. The findings of the study imply that the Indonesian financial authorities should set suitable regulations to mitigate and address the issue of Islamic banks' liquidity risk, particularly in anticipating its non-linear and asymmetric impact on financial stability.]]>
<![CDATA[Islamic bank stability and efficiency: A cross-country analysis ]]>
<![CDATA[Fakhrunnas, Faaza]]>;
<![CDATA[Boubechtoula, Younes]]>;
<![CDATA[Nahda, Katiya]]>;
<![CDATA[Rezoanul Hoque, Mohammad]]>
<![CDATA[ Economic Journal of Emerging Markets Volume 16 Issue 2, 2024 ]]>
Publisher : <![CDATA[Universitas Islam Indonesia ]]>
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DOI: 10.20885/ejem.vol16.iss2.art2
<![CDATA[Purpose ― The study investigates the impact of the efficiency of Islamic banks on banking stability. Method ― A panel data analysis using the Least Square Dummy Variable Corrected (LSDVC) method is employed to examine the impact of efficiency on banking stability in Islamic banks. The study has a sample of 54 Islamic banks across eight countries from 2013 to 2021.Findings ― The findings reveal that the efficiency of Islamic banks has a positive and significant effect on banking stability. In addition, financial turmoil negatively and significantly affects the stability of Islamic banks but does not significantly affect institutional development. Additionally, financial turmoil can influence how effectively Islamic banks manage their businesses in response to banking stability. The outcomes are robust across various robustness methods. Implications ― The results imply that the efficiency of Islamic banks has a pivotal role in banking stability, considering the efficiency level. To ensure the stability of Islamic banks, practitioners and regulators of Islamic banks have to achieve and maintain the efficiency of Islamic banks by implementing the required policies and guidelines.Originality/Value ― Previous studies examining the impact of Islamic banks' efficiency on banking stability remain limited. The paper fills the research gap by examining how Islamic bank efficiency affects banking stability, considering the effects of financial turmoil and institutional development.]]>
