Effect of competition and sustainable financial performance aplication on the profitability at banking industry in Indonesia
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Published:
Aug 30, 2023
Keywords:
Banking, Competition, Profitability, Financial Ratios, Sustainable Financial Performance
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Decision Support System
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Abstract
The aims of this study are to determine the competition effect and the application of sustainable financial performance on the profitability of the banking industry in Indonesia. Purposive sampling was used on the Indonesian Stock Exchange in 2018-2021. The analysis used the panel data regression method. Return on Assets was used as the dependent variable, and the independent variable used banking competition and the application of sustainable financial performance, while the control variable used Net Interest Margin, Capital Adequacy Ratio, Loans to Deposit Ratio, and Non Performance Loans. For the results, the right model is used Fixed Effect effect model, with market share, economic performance, environmental performance, and Net Interest Margin having a positive and significant effect on the profitability of the banking industry, while the Herfindahl-Hirschman Index has a negative and significant effect on the profitability of the banking industry. However, governance performance, social performance, Capital Adequacy Ratio, Loans to Deposit Ratio, and Non Performance Loans have no effect on banking industry profitability.
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How to Cite
Soeharjoto, S., Tribudhi, D. A. . and Salfinnia, M. . (2023) “Effect of competition and sustainable financial performance aplication on the profitability at banking industry in Indonesia”, Jurnal Mantik, 7(2), pp. 1067-1073. doi: 10.35335/mantik.v7i2.3944.
References
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Bain, J. S. (1959). Industrial Organization. John Wiley & Sons.
Brigham, E. F., & Houston, J. F. (2018). Fundamentals of Financial Management. Boston: Cengage Learning.
Fahmi, I., Daryanto, A., Siregar, H., & Harianto. (2012). Prosedur Uji Kepatuhan Terhadap Prinsip Bersaing Islami Pada Industri Perbankan Syariah: Sebuah Proposal Berdasarkan Teori dan Kajian Empiris Organisasi Industri. Jurnal Ekonomi Dan Kebijakan Pembangunan, 1(1), 43–61.
Gumilar, A., & Mulyana, A. E. (2022). Pengaruh Market Share dan Total Assets Turnover Terhadap Return on Equity (Kasus pada PT Kalbe Farma Tbk). BanKu: Jurnal Perbankan Dan Keuangan, 3(1), 33–43.
Hamid, E. S. (2009). Akar Krisis Ekonomi Global dan Dampaknya Terhadap Indonesia. La_Riba, 3(1), 1–11.
Hariyanti, D., Soeharjoto, Tribudhi, D. A., Adriana, M., Octaviani, D., & Rustam, R. (2022). Determinasi Return on Assets Pada Bank Umum di Indonesia. Media Bina Ilmiah, 17(4), 787–794.
Hendra, S. T. N., & Hartomo, D. D. (2017). Pengaruh Konsentrasi dan Pangsa Pasar Terhadap Pengambilan Resiko Bank. Jurnal Bisnis & Manajemen, 17(2), 35–50.
Horvath, R., & Vaško, D. (2016). Central bank transparency and financial stability. Journal of Financial Stability, 22(C), 45–56.
Houben, A., Kakes, J., & Schinasi, G. (2004). Toward a Framework for Safeguarding Financial Stability. In IMF Working Paper: International Capital Markets Department.
Jensen, M. C., & Meckling, W. (1976). Theory of the firm: Managerial behavior, agency cost and ownership structure. Journal of Finance Economic, 3, 305-360.
Kashyapa, A. K., & Siegert, C. (2020). Financial Stability Considerations and Monetary Policy. International Journal of Central Banking, 6(1), 231–266.
Kusumo, W. K., & Novasari, L. (2017). Model Structure Performance Dalam Mengukur Tingkat Efisiensi Pasar Pada Industri Perbankan Syariah. Dinamika Sosial Budaya, 19(2), 308-317.
Lubis, A. F. (2012). Market Power Perbankan Indonesia. Buletin Ekonomi Moneter Dan Perbankan, 14(3), 235–255.
Malik, A. (2020). Pengaruh Loan to Deposit Ratio (LDR) Terhadap Profitabilitas Dengan Non Performing Loan (NPL) Sebagai Variabel Intervening Pada Sub Sektor Perbankan. Jurnal Sains Manajemen, 6(1), 13–22.
Neuberger, D. (1997). Structure, Conduct and Performance in Banking Markets, Thünen-Series of Applied Economic Theory. Working Paper, No. 12, Universität Rostock, Institut für Volkswirtschaftslehre, Rostock.
Niekerk, A. J. V. (2020). Inclusive Economic Sustainability: SDGs and Global Inequality. Sustainability, 12(5427), 1–19.
Nugroho, D., Mangantar, M., & Tulung, J. E. (2019). Influence CAR, BOPO, NIM, and NPL Toward ROA National Private Public Bank Book 3 Period 2014-2018. EMBA, 7(3), 4222–4229.
Nurhayati, D., & Safri. (2023). Pengaruh Capital Adequacy Ratio, Non Performing Loan, dan Biaya Operesional Pendapatan Operasional Terhadap Return on Assets Pada Perusahaan Sub Sektor Perbankan Bank BUMN Yang Tercatat di BEI. JIMA, 3(2), 106–120.
Onder, Z., & Ozyildirim, S. (2013). Role of Bank Credit on Local Growth: Do Politics and Crisis Matter?. Journal of Financial Stability, 9(1), 13–25.
Pinasti, W. F., & Mustikawati, R. I. (2018). The Effect of CAR, BOPO, NPL, NIM AND LDR to Bank Profitability. Jurnal Nominal, 7(1), 126–142.
Pratama, M. S. (2021). Pengaruh BOPO, LDR, CAR, dan NPL terhadap Profitabilitas Sektor Perbankan Indonesia. -Finance: A Research Journal on Islamic Finance, 7(1), 43–55.
Putrianingsih, D. I., & Yulianto, A. (2016). Pengaruh Non Performing Loan (NPL) dan Capital Adequacy Ratio (CAR) Terhadap Profitabilitas. Management Analysis Journal, 5(2), 110–115.
Rahmawati, R. (2015). Strategi Peningkatan Efisiensi Biaya Pada Bank Umum Syariah Berbasis Stochastic Frontier Approach dan Data Envelopment Analysis. Buletin Ekonomi Moneter Dan Perbankan, 17(4), 457–480.
Soeharjoto, S., & Hariyanti, D. (2019). Pengaruh makro ekonomi dan fundamental perusahaan terhadap kinerja perbankan syariah di Indonesia. Jurnal Akuntansi, Keuangan, Dan Manajemen, 1(1), 1–8.
Soeharjoto, Miyasto, & Mariyanti, T. (2021). Firm Value Determination With Inflation and Exchange Rate as a Moderating Variable (Study on the Manufacturing Industry Recorded in Indonesia Sharia Stock Index). The International Journal of Accounting and Business Society, 29(2), 69–84.
Soeharjoto, Tribudhi, D. A., Yusran, H. L., & Masyhudi, L. (2023). Financial And Macroeconomic Performance Effect On Net Interest Margins At Conventional Commercial Banks In Indonesia. Jurnal Manajemen Industri Dan Logistik, 7(1), 11–24.
Soekapdjo, S. (2020). Determinasi Kinerja Bank Umum Konvensional di Indonesia. Jurnal Ilmiah Bisnis Dan Ekonomi Asia, 14(1), 35–45.
Wang, Y., & Li, S. (2021). Market Concentration, Market Power, and Firm Growth of Construction Companies. Advances in Civil Engineering, 1–9.
Widyastuti, R. S., & Armanto, B. (2013). Banking Industry Competition in Indonesia. Bulletin of Monetary, Economics and Banking, 15(4), 401–434.
Winarti, & Rinardi, H. (2020). Paket Kebijakan Deregulasi 27 Oktober 1988 (Pakto 1988): Pengaruhnya Terhadap Liberalisasi Perbankan Indonesia Periode 1988-1993. Historiografi, 1(1), 29–37.
Yu, P., & Wenner, N. (2005). Market Structure, Scale Efficiency, and Risk as Determinabts of German Banking Profitability. Tubinger Discussions beitrage Working Paper.
Yuliani. (2007). Hubungan Efisiensi Operasional dengan Kinerja Profitabilitas pada sektor Perbankan yang go public di Bursa Efek Jakarta. Jurnal Manajemen Dan Bisnis Sriwijaya, 5(10), 13–41.
Bain, J. S. (1959). Industrial Organization. John Wiley & Sons.
Brigham, E. F., & Houston, J. F. (2018). Fundamentals of Financial Management. Boston: Cengage Learning.
Fahmi, I., Daryanto, A., Siregar, H., & Harianto. (2012). Prosedur Uji Kepatuhan Terhadap Prinsip Bersaing Islami Pada Industri Perbankan Syariah: Sebuah Proposal Berdasarkan Teori dan Kajian Empiris Organisasi Industri. Jurnal Ekonomi Dan Kebijakan Pembangunan, 1(1), 43–61.
Gumilar, A., & Mulyana, A. E. (2022). Pengaruh Market Share dan Total Assets Turnover Terhadap Return on Equity (Kasus pada PT Kalbe Farma Tbk). BanKu: Jurnal Perbankan Dan Keuangan, 3(1), 33–43.
Hamid, E. S. (2009). Akar Krisis Ekonomi Global dan Dampaknya Terhadap Indonesia. La_Riba, 3(1), 1–11.
Hariyanti, D., Soeharjoto, Tribudhi, D. A., Adriana, M., Octaviani, D., & Rustam, R. (2022). Determinasi Return on Assets Pada Bank Umum di Indonesia. Media Bina Ilmiah, 17(4), 787–794.
Hendra, S. T. N., & Hartomo, D. D. (2017). Pengaruh Konsentrasi dan Pangsa Pasar Terhadap Pengambilan Resiko Bank. Jurnal Bisnis & Manajemen, 17(2), 35–50.
Horvath, R., & Vaško, D. (2016). Central bank transparency and financial stability. Journal of Financial Stability, 22(C), 45–56.
Houben, A., Kakes, J., & Schinasi, G. (2004). Toward a Framework for Safeguarding Financial Stability. In IMF Working Paper: International Capital Markets Department.
Jensen, M. C., & Meckling, W. (1976). Theory of the firm: Managerial behavior, agency cost and ownership structure. Journal of Finance Economic, 3, 305-360.
Kashyapa, A. K., & Siegert, C. (2020). Financial Stability Considerations and Monetary Policy. International Journal of Central Banking, 6(1), 231–266.
Kusumo, W. K., & Novasari, L. (2017). Model Structure Performance Dalam Mengukur Tingkat Efisiensi Pasar Pada Industri Perbankan Syariah. Dinamika Sosial Budaya, 19(2), 308-317.
Lubis, A. F. (2012). Market Power Perbankan Indonesia. Buletin Ekonomi Moneter Dan Perbankan, 14(3), 235–255.
Malik, A. (2020). Pengaruh Loan to Deposit Ratio (LDR) Terhadap Profitabilitas Dengan Non Performing Loan (NPL) Sebagai Variabel Intervening Pada Sub Sektor Perbankan. Jurnal Sains Manajemen, 6(1), 13–22.
Neuberger, D. (1997). Structure, Conduct and Performance in Banking Markets, Thünen-Series of Applied Economic Theory. Working Paper, No. 12, Universität Rostock, Institut für Volkswirtschaftslehre, Rostock.
Niekerk, A. J. V. (2020). Inclusive Economic Sustainability: SDGs and Global Inequality. Sustainability, 12(5427), 1–19.
Nugroho, D., Mangantar, M., & Tulung, J. E. (2019). Influence CAR, BOPO, NIM, and NPL Toward ROA National Private Public Bank Book 3 Period 2014-2018. EMBA, 7(3), 4222–4229.
Nurhayati, D., & Safri. (2023). Pengaruh Capital Adequacy Ratio, Non Performing Loan, dan Biaya Operesional Pendapatan Operasional Terhadap Return on Assets Pada Perusahaan Sub Sektor Perbankan Bank BUMN Yang Tercatat di BEI. JIMA, 3(2), 106–120.
Onder, Z., & Ozyildirim, S. (2013). Role of Bank Credit on Local Growth: Do Politics and Crisis Matter?. Journal of Financial Stability, 9(1), 13–25.
Pinasti, W. F., & Mustikawati, R. I. (2018). The Effect of CAR, BOPO, NPL, NIM AND LDR to Bank Profitability. Jurnal Nominal, 7(1), 126–142.
Pratama, M. S. (2021). Pengaruh BOPO, LDR, CAR, dan NPL terhadap Profitabilitas Sektor Perbankan Indonesia. -Finance: A Research Journal on Islamic Finance, 7(1), 43–55.
Putrianingsih, D. I., & Yulianto, A. (2016). Pengaruh Non Performing Loan (NPL) dan Capital Adequacy Ratio (CAR) Terhadap Profitabilitas. Management Analysis Journal, 5(2), 110–115.
Rahmawati, R. (2015). Strategi Peningkatan Efisiensi Biaya Pada Bank Umum Syariah Berbasis Stochastic Frontier Approach dan Data Envelopment Analysis. Buletin Ekonomi Moneter Dan Perbankan, 17(4), 457–480.
Soeharjoto, S., & Hariyanti, D. (2019). Pengaruh makro ekonomi dan fundamental perusahaan terhadap kinerja perbankan syariah di Indonesia. Jurnal Akuntansi, Keuangan, Dan Manajemen, 1(1), 1–8.
Soeharjoto, Miyasto, & Mariyanti, T. (2021). Firm Value Determination With Inflation and Exchange Rate as a Moderating Variable (Study on the Manufacturing Industry Recorded in Indonesia Sharia Stock Index). The International Journal of Accounting and Business Society, 29(2), 69–84.
Soeharjoto, Tribudhi, D. A., Yusran, H. L., & Masyhudi, L. (2023). Financial And Macroeconomic Performance Effect On Net Interest Margins At Conventional Commercial Banks In Indonesia. Jurnal Manajemen Industri Dan Logistik, 7(1), 11–24.
Soekapdjo, S. (2020). Determinasi Kinerja Bank Umum Konvensional di Indonesia. Jurnal Ilmiah Bisnis Dan Ekonomi Asia, 14(1), 35–45.
Wang, Y., & Li, S. (2021). Market Concentration, Market Power, and Firm Growth of Construction Companies. Advances in Civil Engineering, 1–9.
Widyastuti, R. S., & Armanto, B. (2013). Banking Industry Competition in Indonesia. Bulletin of Monetary, Economics and Banking, 15(4), 401–434.
Winarti, & Rinardi, H. (2020). Paket Kebijakan Deregulasi 27 Oktober 1988 (Pakto 1988): Pengaruhnya Terhadap Liberalisasi Perbankan Indonesia Periode 1988-1993. Historiografi, 1(1), 29–37.
Yu, P., & Wenner, N. (2005). Market Structure, Scale Efficiency, and Risk as Determinabts of German Banking Profitability. Tubinger Discussions beitrage Working Paper.
Yuliani. (2007). Hubungan Efisiensi Operasional dengan Kinerja Profitabilitas pada sektor Perbankan yang go public di Bursa Efek Jakarta. Jurnal Manajemen Dan Bisnis Sriwijaya, 5(10), 13–41.
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