Journal of Islamic Monetary Economics and Finance (JIMF)
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The COVID-19 Lockdown Effects on Mental Well-Being and Religiosity: Evidence from Indonesia
Full text linkWe investigate the effects of COVID-19 lockdowns on frequency of online search on mental well-being and religiosity-related terms in Indonesia using high-frequency data from Google Trends and Bank Indonesia Consumer Survey from January 1st, 2018, to February 28th, 2021. Monthly search terms and consumer survey data are merged at the provincial level, which results in a total of 131,300 individual observations. Using event analysis and instrumental variable approaches, our study suggests that lockdown policy is significantly associated with higher search intensity of mental well-being and religiosity-related terms compared to the pre-lockdown period. Our findings suggest that mentally disturbed people tend to lean on religion to cope with stressful events during a crisis. Our study has substantial policy implications on ensuring appropriate government interventions that minimize the detrimental effect of COVID-19 on mental well-being.
Acknowledgment
We are grateful to Bank Indonesia's Department of Statistics for helping us to provide the survey data
Determinants of the Intention to Pay Zakat Online: The Case of Indonesia
Full text linkIn this paper, we extend the Unified Theory of Acceptance and Use of Technology (UTAUT) model to examine factors that shape the intention of Muslims in Indonesia to pay zakat online. In the analysis, we include performance expectancy, effort expectancy, social influence, facilitating conditions, trust in zakat institutions, zakat literacy and Islamic religiosity as potential factors. The study employs primary data gathered from 734 respondents and uses the Structural Equation Modeling (SEM) method for data analysis. The main result shows that facilitating conditions, performance expectancy, trust in zakat institutions, social influence, and zakat literacy influence the intention to pay zakat online. However, effort expectancy and Islamic religiosity turn out to be insignificant determinants of the intention to pay online zakat. The findings suggest that zakat stakeholders must enhance trust and intensify education about zakat. Zakat organizations must also improve the quality of the online zakat system, highlight the benefits of zakat online, and optimize the use of social media to increase zakat collection through digital channels
The Role of PLS Financing on Economic Growth: Indonesian Case
Full text linkThis paper investigates the role of PLS financing and non-PLS financing of Islamic banks in supporting the real sector for the case of Indonesia using monthly data from January 2009 to December 2018. Applying the ARDL approach to model their long-run and short-run relations, we find positive contribution of the PLS financing scheme to Indonesia's economic growth. Comparing the PLS and non-PLS financing, we note that the PLS financing has a larger impact on growth, both in the long run and short run. Accordingly, for Islamic finance to have larger growth impact, concrete steps and initiatives must be put in place to increase Islamic financing based on PLS arrangements. 
Does Islamic Social Capital Enhance SMEs Sustainable Performance?
Full text linkThe study examines the roles of Islamic social capital and firm innovativeness in maintaining sustainable performance of SMEs in Indonesia. Compiling data from 186 respondents and using the partial least squares structural equation modeling approach (SEM-PLS), the study documents the importance of Islamic social capital for many aspects of businesses. The Islamic social capital not only supports business activities but also strengthens business networks, which in turn boosting firms’ innovation its performance.
Acknowledgment
The authors would like to thank Bank Indonesia
Policy Rates Pass-Through in Indonesia’s Dual Banking System: Does Business Cycle Matter?
Full text linkThis paper examines the pass-through of the policy rate to conventional and Islamic bank rates during the recessionary and expansionary episodes for the case of Indonesia. Applying an error-correction modelling to monthly data from June 2014 to April 2021, our findings confirm that the interest rate pass-through is sensitive to the business cycle for both conventional and Islamic banks. The policy rate pass-through to deposit rates is higher during the recession for both banking types. We also note that the lending rates of conventional banks fully adjust to the policy rate in the recessionary phase. The findings for Islamic financing rates are interesting. Namely, they tend to move inversely with the policy rates during the expansionary period. Meanwhile, depending on the rates, they are either over-responsive or less responsive during the recessionary phase. Finally, the degree of short-run adjustment in most banking rates is not influenced by the business cycle. These findings suggest that Islamic banking rates are less synchronized to the monetary policy rate, indicating that sharia-based banking barely supports counter-cyclical monetary policy
Relationship between Board Independence and CSR Spending of Islamic Banks in Bangladesh
Full text linkThis study examines the relationship between board independence and CSR expenditures on education, health and human and disaster relief for the case of Islamic banks in Bangladesh, Using unbalanced panel data from 2010 to 2020, the results indicate that board independence is positively and significantly associated with CSR expenditures on education and human and disaster relief sectors but is insignificantly related to the CSR expenditure on health. Thus, in forming the governance framework of Islamic banks, there is a need to have board independence to promote the social responsibility of Islamic banks. Indeed, our results suggest that it should be a regulatory requirement
Asymmetric Causal Linkages between Liquidity and Profitability for MENA Islamic Banks
Full text linkThis paper investigates the impact of liquidity on Islamic bank profitability. We examine the existence of asymmetric causal linkages or structural shifts in the profitability-liquidity nexus for a sample of 34 Islamic banks in the Middle East and North Africa (MENA) countries over the period 2005-2017 using the Panel Threshold Regression and controlling for the bank-specific and macroeconomic variables. Empirical evidence highlights a non-linear relationship between liquidity and Islamic bank profitability. Indeed, there is a significant negative relationship between liquidity and profitability if the ratio of loan/total assets does not exceed the threshold. Contrariwise, liquidity positively affects profitability. Furthermore, the empirical evidence shows that bank size is adversely related to banks’ profitability given the economies of scale issues of Islamic banks. The CAR impact is well emphasized above and below the threshold. We highlight that Islamic banks face a trade-off between liquidity and profitability. They are recommended to strengthen the liquidity risk management instruments to improve their profitability notably within a framework of Basel III liquidity requirements to maintain adequate high-quality liquid assets
Evaluating Indonesian Islamic Banking Scholarly Publications: A Data Analytics
Full text linkThis study employs bibliometric analysis to evaluate 443 scholarly works on the topics of Indonesian Islamic banking published on 194 academic platforms, and authored by 1049 scholars. The machine learning tools i.e., R Studio and VOSviewer were employed to analyse the Scopus’ bibliographical data automatically harvested from the database. We developed four research questions based on the theories that are fundamental to bibliometric study, i.e., performance analysis, citation and co-citation analyses, bibliographic coupling and social network analysis, to identify the most impactful manuscripts, scholarly journals, authors, and institutions of affiliation. We further established the discussion of the current issues in Indonesian Islamic banking topics from the keyword analysis and the bibliographic coupling. These findings derive some recommendations for future research. This study provides a supply of scholarly novelty in the assessment of Indonesian Islamic banking publications which are both practically and theoretically importance to regulators, academia and industry professionals.
Acknowledgment
The authors would like to thank Bank Indonesia for the funding that made this study possible
Determinants of Systematic and Unsystematic Liquidity Risk in Islamic Banks
Full text linkThis study examines whether systematic (macroeconomic) and unsystematic (bank specific) factors determine liquidity risk in Islamic banks. The study employs a sample of Islamic banks from Pakistan, Qatar, Malaysia, UAE, Bangladesh, Bahrain, and Saudi Arabia over the period 2008 – 2019. Using Least Square estimation methods to estimate the model separately for each country, we find the results to be mixed and different across countries. The results also show that non-performing loans, bank size, leverage ratio and return on assets are key unsystematic drivers in determining the liquidity risk of Islamic banks. This study points out the fragility of Islamic banks in relation to managing liquidity risk
Nexus of Risk and Stability in Islamic Banks during the Pandemic: Evidence from Indonesia
Full text linkThis paper analyzes the effect of liquidity risk and credit risk on Islamic bank stability and whether the risk-stability nexus changes during the Covid-19 pandemic. Using a panel quarterly dataset of 14 Islamic banks from 2017 to 2020, a total of 224 quarterly-bank observations in total and the system generalized method of moment, we find that credit risk and liquidity risk are negatively associated with bank stability. Moreover, the COVID-19 does not alter the negative relationship between liquidity risk and stability. To validate the results, we also estimate the model using the LSDVC. The LSDVC results remain consistent. These results provide new insight into understanding risk management implementation for minimizing these risks