Journal of Indonesian Economy and Business
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DOES HEURISTIC BEHAVIOR LEAVE ANOMALIES IN THE CAPITAL MARKET?
No full textIntroduction/Main Objectives: This study aims to examine the role of heuristic behavior toward the formation of fundamental and technical anomalies in the capital market. This study also aims to examine the role of fundamental and technical anomalies on investment performance. Background Problems: Efficient Market Hypothesis (EMH) is not always able to explain all of the events or phenomena so that it still raises questions and produces research results that do not meet expectations, so in the end these phenomena are categorized as market anomalies. This study investigates whether heuristics have an effect on fundamental and technical anomalies and whether the anomalies have an effect on investment performance. Novelty: There is no research that uses hindsight variables incorporated into heuristics; therefore, this study confirms that the indicators used for hindsight measurements are appropriate for measuring what will be measured. Previous research did not involve hindsight in the heuristic category. Research Methods: Data management are done by using Structural Equation Modelling (SEM) with the help of the WarpPLS analysis tool. Mediation exploration testing was accomplished with variance accounted for (VAF). Findings/Results: The results of the study show that heuristics (availability, representativeness, and hindsight) are proven to be one of the factors that cause fundamental and technical anomalies in the capital market, except for availability heuristics. Conclusion: A large number of anomalies in the capital market do not stop investors from continuing to invest, so that at a certain level, investors are satisfied with their investments’ performance because they use heuristics in an efficient way
Bringing Virtual Communities into a Marketing Strategy to Create Purchase Intentions in the Social Media Era
No full textIntroduction/main objectives: A virtual community is a new form of social interaction that provides an alternative way for connectivity and creativity. As the most favorite platform, social networking site is one of marketing objectives and strategies for global brands. The purpose of this study is to examine the antecedents (social eWOM, image, and trust) and consequences (purchase intention) of eWOM’s adoption. Background problem: Today, taking part in virtual communities is a must. People with the same interests share their experiences and become trustworthy referees for others. Understanding the effect virtual communities can have will help companies to expand their markets. Novelty: Social eWOM has a great impact, but no prior studies have examined the effect of social eWOM or a virtual community on image, trust, eWOM‘s adoption and purchase intentions, this study would be the first study that provides a comprehensive model using recent issues. Research methods: Purposive sampling was used to recruit 240 active participants in virtual communities in Indonesia. To collect the data, spreading questionnaire was conducted. SPSS and PLS 3 were used to analyze the data. Findings: The findings proved the relationship among social eWOM, image and trust. It also revealed that eWOM’s adoption affected purchase intentions. Surprisingly, image has no statistically significant effect on eWOM’s adoption. Conclusion: Well-managed social eWOM creates a better image, and increases trust, and eWOM’s adoption leads to an increase in the purchase intention. This study offers managerial insights to manage social eWOM from any virtual communities, to improve their image and trust. Finally, managers should maintain positive reviews, as this will also create an intention to purchase.
THE INFLUENCE OF TAX EDUCATION DURING HIGHER EDUCATION ON TAX KNOWLEDGE AND ITS EFFECT ON PERSONAL TAX COMPLIANCE
No full textIntroduction/Main Objectives: This study has three objectives. First, to analyze whether tax education during higher education influences individual tax compliance through increased knowledge about taxation. Second, to explore the implementation of tax education in universities. Third, to identify the cooperation between universities and the Directorate General of Taxation in order to improve individuals’ tax compliance. The research method used in this study is a mixed-method. Background Problems: In previous studies the educational variables have been measured from the level of the education of the respondents (diploma, undergraduate, and postgraduate), not on the application of courses in tertiary institutions, so that they do not reflect if the respondents received any tax education. Research Method: The approach used in this mixed-method is a convergent parallel one. In a parallel convergent approach, the author collects each item of quantitative and qualitative data simultaneously, and then the data are analyzed. Findings/Results: The results of a survey of 100 students who regularly attend night classes held at the Politeknik Negeri Batam (Polibatam), who have fulfilled the requirements to be taxpayers, indicate that tax education has a significant effect on tax compliance. Then, the indirect effect of tax education through tax knowledge also significantly influences tax compliance. The results of quantitative research are also supported by the results of interviews with two students, two tax lecturers, and one employee of the Directorate General of Taxation. Conclusion: The results of this study are also in line with the social learning theory, where the environment influences cognition and behavior. From the theory, it can be concluded that tax education can increase tax knowledge and influence taxpayers’ compliance behavior
The Effect of Levers of Control and Leadership Style on Creativity
No full textIntroduction: This research aims to investigate how leadership assists the levers of control (LOC) to influence employees’ creativity. Background problem: Managing a company is challenging due to the numerous issues faced, including those relating to the employees’ creativity. Prior studies showed different results concerning how company controls constrained or enhanced the employees’ creativity. Previous studies explained that incentives can influence the employees’ creativity, but only temporarily. However, organizations require creativity continuously in order to sustain themselves. In response to this issue, it is essential to investigate other determinants that encourage employees’ creativity, and how the process is relevant to each organization’s core values. This study examines this through companies control systems and leadership aspects. Novelty: Our study attempts to complement previous studies and answer Spekle’s (2017) call. This study offers transformational leadership to strengthen employees’ creativity, aligned through the LOC. Research Methods: The data were collected via an online survey. The questionnaires were sent to startup companies’ employees who had worked in the creative divisions of those companies for a minimum of six months. There were 109 responses that we processed. This study used SEM-PLS to analyze the data. Finding/ Result: The LOC positively influenced employee creativity. The more leaders behaved as transformational leader, it strengthened LOC to influence employees’ creativity. Conclusion: This study shows that the dimensions used to establish the LOC should be integrated, to align the employees’ creative ideas for new methods of working. Furthermore, this study supports the prior research into the self-determination theory and answers Spekle et al (2017), that leadership is required to influence the employees. Particularly, companies should appoint appropriate leaders to encourage their employees’ creativity. Transformational leaders should be considered to be an option
STRATEGIC PROFILING: EMPIRICAL EVIDENCE OF SUPPLY CHAIN STRATEGY PRACTICES IN SMALL AND MEDIUM ENTERPRISES
No full textIntroduction/Main Objectives: The purpose of this study is to describe the characteristics of the development pattern of the capabilities of SME (Small and Medium Enterprises) to manage an integrated supply chain’s capabilities. Background Problems: The use of a single source will lead to a single respondent bias and give rise to inter-rater reliability for the perceptual data. When measuring the performance variables in this study, which uses self-reporting, the use of a single respondent will lead to bias. Novelty: This study aims to test the concept of fit, in particular for the alignment of strategy between functions, which are the supply chain and manufacturing strategies, by using a selection approach. The taxonomy result will produce a strategic profile which is able to describe the extent to which the strategic decision agrees with, and is consistent between the functions of SMEs in particular. Research Methods: The hypothesis testing process of the study uses a sample of 102 SMEs in the Province of Yogyakarta, Indonesia. The testing technique used in this study is a cluster analysis and an ANOVA. Findings/Results: The testing result of the cluster analysis identifies three taxa of supply chain strategy groups. The result of the ANOVA test is used to test three hypotheses and all the hypotheses are supported, while the hypothesis of the supply chain’s strategy group differences, based on the type of product, is not proven. Conclusion: The cluster testing result produces strategic profiling; it identifies the three groups of the supply chain’s strategies that describe the ability of SMEs to design their supply chain’s capabilities, with particular regard to the six dimensions of the supply chain’s strategy that have been listed
Team Monitoring, Does it Matter for Team Performance? Moderating role of Team Monitoring on Team Psychological Safety and Team Learning
No full textIntroduction: The use of work teams is a strategy that allows organizations to move faster and more proactively. Team performance is an interesting issue that needs to be studied more extensively. Background Problems: Team psychological safety and team learning have a positive effect on team performance. But in some of the literature, psychological safety has also been shown to have a negative impact on teams when team monitoring is low. This research was conducted to investigate the moderation role of team monitoring and the influence of team learning and team psychological safety on team performance. Novelty: This research contributes new insights related with team monitoring and its interaction to team learning and team psychological safety on team performance. Team psychological safety has been proven to be able to directly influence team performance indirectly through team learning, but we tested the two separately. Research Methods: This study involved 215 respondents who joined 38 teams. The collected data were analyzed using a regression analysis and bootstrap techniques. Findings: Team monitoring has been shown to have a moderate role in influencing team learning on team performance, but it has not been proven to influence team psychological safety on team performance. The learning and psychological safety of each team proved to have a direct effect on team performance. Conclusion: This paper can guide managers since, at a certain level team monitoring can improve team performance, but too much team monitoring actually has no effect on team performance. Managers need to consider team monitoring policies carefully, to optimizing team performance by managing team learning and building team psychological safety
Blue-Collar Workers Entrepreneurial Intentions and The Extended Theory of Reasoned Action: Incorporating SEM and Person-Item Map Analysis
No full textIntroduction/Main Objectives: Blue-collar workers face major threats related to the development and application of Industry 4.0. Unfortunately, research on how they deal with this situation is scarce in the behavioral science literature. In this study, we attempt to fill this gap by emphasizing a methodological aspect of combining structural equation modeling (SEM) and person-item map analysis to the extended model of the theory of reasoned action. Novelty and Methods: We offer the notion of combining SEM and Rasch model analysis to explain the extended of theory of reasoned action. The respondents were blue-collar workers from Indonesia who have not yet started a business. Finding/Results: In line with our goal of applying intersubjective certification to the extended theory of reasoned action (TRA) model in the context of blue-collar workers, our results suggest that religiosity affects entrepreneurial intentions, both directly and indirectly, through attitude. The subjective norms have also been shown to influence the intention of blue-collar workers to become entrepreneurs. The extended TRA model has been proven empirically to have good predictive power, with a total effect of 83%. Conclusion: Regarding the sample issue, the person-item map is excellent for explaining our SEM-based findings. The idea of combining the Rasch model property, which is a persons-items map, requires more empirical support to promote its ability to illuminate SEM-based research explanations
Day-of-the-Week Effect and Investors’ Psychological Mood Testing in a Highly Mispriced Capital Market
No full textResearch Aims: This research examines investors’ psychological moods which cause day-of-the-week anomalies in highly mispriced stock markets. Design/methodology/approach: We use a sample from the Indonesian capital market as, in the Asian region, this country is considered to have a highly mispriced capital market. We decompose the stock price index in Indonesia into speculative, less speculative, and non-speculative indexes. We employ the mean and variance regressions to control the heteroscedasticity and serial correlation. Novelties: Our novelties are two fold. We postulate a method to decompose stock price indexes in Indonesia (the JKSE, LQ 45, and Kompas 100) into speculative, less speculative, and non-speculative indexes. Secondly, we estimate the mean and variance levels simultaneously to get a robust estimation result of the anomaly. Research Findings: We empirically find that the behavior mood hypothesis is supported only during normal periods, when investors tend to be irrational and use their good mood to trade on speculative stocks on a Wednesday and sell them on Monday. In other periods, rationality and psychological effects play a role with Indonesian investors, when their mood is good they are more active in trading less speculative stocks, to avoid higher risks and earn higher returns from those less speculative and non-speculative stocks
The Effect of Power Distance, Moral Intensity, and Professional Commitment on Whistleblowing Decisions
No full textIntroduction/Main Objectives: Whistleblowing decisions are one of the keys in fraud detection. Considering the rise of fraud cases in organizations, this individual action has a significant impact on organizational performance. Therefore, it is necessary to examine factors that influence the whistleblowing decisions of individuals. Background Problems: This study examines the effect of power distance, moral intensity, and professional commitment on the whistleblowing decision of undergraduate accounting students at the Faculty of Economics and Business, Universitas Gadjah Mada (FEB UGM).Novelty: The novelty of our research is we are filling the gap in previous studies by using students as the population; most studies use employees (such as auditors) as the main population. We use students because they form the next fraud-fighting generation to enter the working environment. Therefore, their understanding and perceptions of whistle blowing activities are crucial. This research is considered to be the first micro-level analysis research in the areas. Research Methods: We adopted the survey method and analyzed it using a regression. We use purposive sampling on 189 undergraduate students from the accounting department. Findings/Results: Our findings indicate that power distance, moral intensity, and professional commitment simultaneously affect accounting students’ whistleblowing decisions. Power distance had a negative and significant effect, meanwhile professional commitment had a positive and significant effect and there was no significant effect of moral intensity toward the whistleblowing. Conclusion: Having professional commitment is essential for whistleblowing decision-making. It needs individual awareness and professional ethics, as well as improvements to people’s morals and values
WELFARE IMPACT OF HIGH-NUTRIENT FOODS’ PRICE INCREASE ON INDONESIAN HOUSEHOLDS: IS THERE A ROLE FOR OWN-FARM PRODUCTION?
No full textIntroduction/Main Objectives: Significant price increases in food items and uncertainty in the market probably have a severe impact on society, and especially on low-income households. Background Problems: The increases in food prices could have a large impact on the economy and specifically on households. Thus, this study was conducted to investigate what the demand for food, specifically high-nutrient food items, and the impact on welfare are like in Indonesian households when food prices rise. Novelty: There is a great deal of empirical research into the impact of food price changes on household welfare, however studies that have focused on high-nutrient commodities, in particular on self-produced food, are still limited. Many of the previous studies used cross-sectional data for one period but this study used two-wave longitudinal data. Research Methods: Using a large sample of data from the Indonesian Family Life Survey (IFLS), this study employed the quadratic almost ideal demand system (QUAIDS) to identify the demand pattern and applied compensating variation (CV) to understand the impact of soaring food prices on welfare changes. Findings/Results: Overall, the analysis of the impact notes that when prices increase, all household groups would experience welfare losses. The poorest households would experience less of a welfare loss than the richest households, while a larger welfare loss is suffered by households in Java and rural areas. Conclusion: For the low-income households, having their own productive farms could overcome any economic shocks threatening them. Thus, the government should support small-scale farming through such strategic policies as giving them assistance and training in how to manage a small farm