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Market Discipline Mechanism: A Quantitative Approach (The Study of Islamic Banking in Indonesia 2011-2014)

JEMA: Jurnal Ilmiah Bidang Akuntansi dan Manajemen

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Title Market Discipline Mechanism: A Quantitative Approach (The Study of Islamic Banking in Indonesia 2011-2014)
 
Creator Sapta Pradana, Ayub Wijayati
Hariri, Hariri
Junaidi, Junaidi
 
Subject —
 
Description Transparency of information are the main requirement of market discipline mechanism which is described by an adequate disclosure. Through the quantitative approach, the customer will attract an investment funds (giro, savings, deposits) if the bank takes a high risk action based on information that disclosed on financial statements. In a theoretical view, Islamic banks with the principle of profit-loss sharing (PLS) have a higher risk than conventional banks with a fixed rate of interest, so that customers of Islamic banks should have a higher sensitivity than conventional bank customers. The next question, whether the customers of Islamic banks would react to the disclosure of financial statements through changes in the number of funds invested?This research aimed to examine the effect of the level of disclosure of financial statements to changes in the number of third party funds in Indonesia Islamic Banking on the period 2011-2014. Data were analyzed using a regression model. The study states that the level of disclosure of financial statements significant positive effect on changes in the number of third-party funds were indicates that there is a mechanism of market discipline on Islamic Banks in Indonesia. However, this result must to be strengthened by data of risk disclosure and ability to absorb information from customers, analysis of determinants were affecting customers behavior, then as well as the comparison test with conventional commercial banks.Keywords: market discipline, the level of disclosure, third party funds, Islamic bank
 
Publisher University of Islam Malang
 
Contributor —
 
Date 2017-03-22
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://riset.unisma.ac.id/index.php/jema/article/view/213
10.31106/jema.v14i01.213
 
Source JEMA: Jurnal Ilmiah Bidang Akuntansi dan Manajemen; Vol 14, No 1 (2017): JEMA: Jurnal Ilmiah Bidang Akuntansi dan Manajemen; 35-53
2597-4017
1693-7864
10.31106/jema.v14i01
 
Language eng
 
Relation http://riset.unisma.ac.id/index.php/jema/article/view/213/pdf
 
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License URL: http://creativecommons.org/licenses/by/4.0/