SOLUTION TO OVERCOME THE BANKRUPTCY POTENTIAL OF ISLAMIC RURAL BANK IN INDONESIA

Abrista Devi () and Irman Firmansyah ()
Additional contact information
Abrista Devi: Ibn Khaldun University of Bogor
Irman Firmansyah: Siliwangi University Indonesia

Journal of Islamic Monetary Economics and Finance, 2018, vol. 3, issue Special Issue, 45-62

Abstract: This paper investigates the direct and indirect effect of macro and microeconomics variables toward financial distress by using efficiency variable as mediator. This research used time series and monthly-published report data of Islamic Banking Statistics and Macroeconomics data. The Springate Model is used to measure financial distress through s-score, while the Data Envelopment Analysis (DEA) approach is utilized to measure Islamic rural bank’s efficiency. The finding implies that the efficiency of Islamic rural bank in Indonesia is mainly caused by microeconomics variables where CAR and NPF directly have significant and negative effects on efficiency, while ROA and FDR directly have significant and positive effects on efficiency. The financial distress of Islamic rural bank in Indonesia is mainly caused by micro and macroeconomics variables where CAR and SIZE directly have significant and positive effects on financial distress score, while NPF and Exchange rate directly have significant and negative effects on efficiency. Efficiency has a strong role on mediating the effect of microeconomics variables toward financial distress score of Islamic rural bank.

Keywords: Efficiency; Financial Distress; Islamic Rural Banks (search for similar items in EconPapers)
JEL-codes: C14 D10 E42 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://jimf-bi.org/index.php/JIMF/article/download/750/708 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:idn:jimfjn:v:3:y:2018:i:specialissuec:p:45-62

DOI: 10.21098/jimf.v3i0.750

Access Statistics for this article

Journal of Islamic Monetary Economics and Finance is currently edited by Dr. Ali Sakti

More articles in Journal of Islamic Monetary Economics and Finance from Bank Indonesia Contact information at EDIRC.
Bibliographic data for series maintained by Lutzardo Tobing ( this e-mail address is bad, please contact ) and Jimmy Kathon ().