Journal of Indonesian Economy and Business <p style="text-align: justify;"><img style="display: block; margin-left: auto; margin-right: auto;" src="/v3/public/site/images/jieb/homepageImage_en_US_(1).jpg" width="331" height="455"></p> <p style="text-align: justify;">Journal of Indonesian Economy and Business (JIEB), with registered number print ISSN&nbsp;<strong><a title="ISSN" href=";search[]=MUST=issnl=0215-2487&amp;currentpage=1&amp;size=10" target="_blank" rel="noopener">2085-8272</a></strong>; online ISSN&nbsp;<a title="Check ISSN" href=";search[]=MUST=issnl=0215-2487&amp;currentpage=1&amp;size=10" target="_blank" rel="noopener"><strong>2338-5847</strong>, </a>is open access, peer-reviewed journal whose objectives is to publish original research papers related to the <strong>Indonesian economy and business issues</strong>. This journal is also dedicated to disseminating the published articles freely for international academicians, researchers, practitioners, regulators, and public societies.</p> <p style="text-align: justify;">The journal welcomes authors from any institutional backgrounds and accepts rigorous empirical research papers with any methods or approach that is relevant to the Indonesian economy and business context or content, as long as the research fits one of three salient disciplines: economics, business, or accounting.&nbsp;</p> <p style="text-align: justify;">The JIEB is Internationally indexed in <a href="" target="_blank" rel="noopener">SCOPUS</a>, EBSCOHost (<a href="">Business Source Corporate Plus</a>&nbsp;and&nbsp;<a href=";sid=d9b01640-fc29-4180-b733-0ef52c7990ab%40sessionmgr4006&amp;bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=bth&amp;jid=BL33">Business Source Complete</a>),&nbsp;<a href="">EconLit</a>,&nbsp;<a href="">ProQuest</a>,&nbsp;<a href=";user=9VyQpCoAAAAJ&amp;view">Google Scholar</a>,&nbsp;<a href="">DOAJ</a>,&nbsp;<a href="">Microsoft Academic Search</a>, and ACI (<a title="ACI" href=";id=634">ASEAN Citation Index</a>). &nbsp;Furthermore, this journal has been nationally accredited by the Directorate-General for Research Strengthening and Development, the Ministry of Research and Technology for Higher Education, Republic of Indonesia (Decree No. 148/M/KPT/2020) in <a href="">SINTA 2 (Indonesian Science &amp; Technology Index).</a></p> <p style="text-align: justify;"><img style="display: block; margin-left: auto; margin-right: auto;" src="/v3/public/site/images/jieb/Akreditasi_JIEB.JPG" width="522" height="346"></p> en-US <p><strong>Copyright</strong></p> <p>Upon acceptance of an article, authors transfer copyright to the JIEB as part of a journal publishing agreement, but authors still have the right to share their article for personal use, internal institutional use, and for any use permitted under the CC BY-SA license</p> <div> <p><strong>Open Access</strong></p> </div> <p>Articles are freely available to the public without any subscription with permitted reuse. For open access articles, permitted third party (re)use is defined by the following Creative Commons user licenses:&nbsp;<em><strong>Creative Commons Attribution (CC BY-SA)</strong>.</em></p> (Widya Paramita, Ph.D) (Maria Wintang Rarasati) Fri, 27 Jan 2023 08:01:21 +0700 OJS 60 Characteristics of a Good Board of Directors for Indonesian SOEs Performance <p><strong>Introduction/Main Objectives: </strong>This research aims to empirically show the positive influence of the board of directors' characteristics on company performance, proxied by female directors, political connections, economic and/or business educational backgrounds, and education levels. <strong>Background Problems: </strong>Essential characteristics are required to produce quality strategies because they directly affect the performance of SOEs, and Regulation PER-8/MBU/08/2020 of the Minister of SOEs restruc­tures the BOD to increase the proportion of women. <strong>Novelty: </strong>This research measures SOEs' performance from their financial, adminis­trative, and operational aspects. It comprehensively assesses the dual function of SOEs as public servants and producers of state profits. <strong>Research Methods: </strong>A total of 245 Indonesian state-owned enterprises were examined between 2014 and 2019 using panel regression with the random effect model. The companies’ performance data were obtained from the Information Management and Documentation Officer (PPID) of the Ministry of SOEs of the Republic of Indonesia (RI). <strong>Finding/ Results: </strong>The results show that female directors and political connections positively influence the performance of SOEs. According to the robust­ness test, directors with economic and/or business education backgrounds positively influence the financial performance, and the higher the education level is, this negatively influences the performance of SOEs. <strong>Conclusion: </strong>Essentially, this research supports the plan of the Minister of SOEs to increase the proportion of women on the boards of directors. The findings also prove that political connections strengthen the personal qualities of SOE directors, whether they are female or not.</p> Dian Kusuma Wardhani, Wiwik Supratiwi Copyright (c) 2023 Journal of Indonesian Economy and Business Tue, 24 Jan 2023 10:39:54 +0700 Factors Affecting Trust and Interest in Transactions by Indonesian MSME Sellers in e-Commerce <p><strong>Introduction/Main Objective:</strong> This study aims to examine the factors that influence the trust and interest in e-commerce transactions among MSME actors in Indonesia. Therefore, a study was conducted on the effect of these variables. <strong>Background of the problem</strong>: The transition of MSMEs in Indonesia to using e-commerce for carrying out their business transactions. Every year, there is an increase in the number of MSMEs converting from conventional to digital, as well as the government's contribution to assist in the transition. <strong>Novelty</strong>: The variable of interest in transacting through e-commerce is the basis for conventional businesses to switch to digital, but in other studies, no one has added a variable of trust as an intervening variable, and several other supporting variables for the interest in transacting via e-commerce. This study presents new research that provides a comprehensive view of the technology acceptance model (TAM) and how it relates to trust and interest in e-commerce transactions. <strong>Research Methods</strong>: This study uses a snowball sampling technique by employing a survey of the MSMEs in Indonesia with certain criteria. This study also uses structural equation modeling (SEM) based on partial least squares (PLS). <strong>Findings/Results</strong>: This study proves that all the variables of trust and interest in e-commerce transactions are supportive and significant, but there are two hypotheses that do not support them (H3 and H6). This shows that empirically MSMEs are not necessarily interested in using e-commerce for their business transactions. <strong>Conclusion</strong>: This study provides insight into the trust and interest in e-commerce transactions among MSME business actors. We suggest that the MSMEs should switch to using e-commerce for their transactions, to develop their businesses into digital ones.</p> Yongki Alfa Rizi, Fitra Dharma, Yunia Amelia, Tri Joko Prasetyo Copyright (c) 2023 Journal of Indonesian Economy and Business Tue, 24 Jan 2023 15:30:48 +0700 Cash Holdings and R&D Intensity with Different Controlling Shareholders <p><strong>Introduction/Main Objectives:</strong> This research aims to examine the effects of cash holdings on a firm’s R&amp;D intensity. We further examine how that relationship may be varied across different controlling share­holders. For robustness reasons, we test it in a developing market and a developed market. <strong>Background Problems:</strong> Economics and business theories state that research and development (R&amp;D) is susceptible to financing constraints due to the lack of collateral value and asymmetric information issues. This argument has been extensively debated with no consensus being reached. Therefore current study focuses on the examination of R&amp;D and cash holding and the role of controlling shareholders. <strong>Novelty:</strong> The current study considers the importance of controlling shareholders on the relationship between cash holding and R&amp;D intensity. We expect that different controlling shareholders will have different constraints on R&amp;D financing. <strong>Research Methods:</strong> This study focuses on a sample of public listed companies in Malaysia and Singapore from the year 2012 to 2018, and estimates the model under a two-step GMM panel regression to eliminate the endogeneity issue. <strong>Finding/Results:</strong> The results show that cash holdings have significant effects on the intensity of R&amp;D. However, that relationship is different across countries and across controlling shareholders. Malaysia’s foreign firms will increase their R&amp;D’s intensity when their cash holdings are high. Meanwhile, Singaporean family firms will reduce the intensity of their R&amp;D when their cash holdings are high. Overall the findings confirm the hypothetical alignment of the agency theory and also the resource-based view theory. <strong>Conclusion:</strong> Our findings surmise that higher cash holdings cause a lower R&amp;D intensity due to the cash management decisions by managers. A firm with high leverage tends to reduce its R&amp;D intensity when cash holdings are high, and vice versa. This behavior can be found in all the controlling shareholders.</p> Rayenda Khresna Brahmana, Doddy Setiawan, Maria Kontesa, Lee-Ung Soo Copyright (c) 2023 Journal of Indonesian Economy and Business Tue, 24 Jan 2023 10:46:38 +0700 The Effect of Tournament Horizon, Faultline and Group Performance Relationships under Decentralized System <p><strong>Introduction/Main Objectives: </strong>This research integrates the self-categorization and contagion theories to analyze faultlines due to a decentralization system. Besides, this research investigates the inducement of tournament incentives as a control mechanism to mitigate the harmful effects of a faultline on group performance. <strong>Background Problems: </strong>Fiscal decentralization has a crucial role as it stimulates economic growth, enhances the quality of decision-making and escalates performance. However, decentralization by one local government, which consists of various local government departments, may trigger a faultline. This research argues that patterned diversity convenes faultlines that split up a group into antagonistic sub-groups following the attributes affecting the aggregate group performance. <strong>Novelty: </strong>This research provides a new insight, in that decentralization appears to be a double-edged sword. It can elevate the quality of local decision-making, and trigger faultlines between local government departments at other times, affecting the local government’s aggregate performance. <strong>Research Methods: </strong>This research uses a laboratory experimental method with a 2×3 between-subjects factorial design. The research design uses the dyad analysis level. <strong>Finding/Results: </strong>The results found that the induction of a tournament scheme with the use of a cumulative ordinal scale for determining group performance encourages the social cognitive activation of individuals, thus encouraging cognitive orientation to optimize compensation and minimize categorization and antagonism. <strong>Conclusion: </strong>A tournament incentive scheme can be induced as a management control mechanism and to encourage the sub-groups to be winners. This resolution is expected to mitigate antagonistic behavior due to faultlines and enhance the optimization of aggregate performance</p> Frida Fanani Rohma, Indah Shofiyah, Abdus Salam Junaedi Copyright (c) 2023 Journal of Indonesian Economy and Business Tue, 24 Jan 2023 15:10:48 +0700 Nexus between Financial Leverage and Board Independence of Public-Listed Firms: Is There Any Stylised Fact? <p><strong>Introduction/Main Objectives:</strong> This paper examines the relationship between financial leverage and board independence for firms listed on the Malaysian stock exchange. <strong>Research Methods: </strong>This research is conducted using sample of 265 non-financial firms listed on Bursa Malaysia from 2014 to 2018<strong>. Finding/Results: </strong>Our results show: first, board independence is essential in reducing firm leverage. However, board independence does not affect all firms equally. In particular, board independence has insignificant influences on the financial leverage of young or small firms. In contrast, the financial leverage of old or large firms is negatively associated with board independence. Second, the financial leverage of firms with low profitability is adversely affected by the presence of independent directors. However, the negative impact diminishes as the firms' profitability increases. <strong>Conclusion:</strong> These results indicate the importance of having independent directors for old, large, or low-profitability firms to reduce their financial leverage. These findings contribute to the stylised facts of the nexus between financial leverage and board independence.</p> Wai-Cheng Kok, Wee-Yeap Lau, Tien-Ming Yip Copyright (c) 2023 Journal of Indonesian Economy and Business Tue, 24 Jan 2023 15:17:02 +0700