The impact of Islamic bank financing on business

Sri Herianingrum (), Ririn Tri Ratnasari (), Tika Widiastuti (), Imron Mawardi (), Rachmi Cahya Amalia () and Hanif Fadhlillah ()
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Sri Herianingrum: Airlangga University, Indonesia
Ririn Tri Ratnasari: Airlangga University, Indonesia
Tika Widiastuti: Airlangga University, Indonesia
Imron Mawardi: Airlangga University, Indonesia
Rachmi Cahya Amalia: Airlangga University, Indonesia
Hanif Fadhlillah: Airlangga University, Indonesia

Entrepreneurship and Sustainability Issues, 2019, vol. 7, issue 1, 133-145

Abstract: From the test results concluded that the Local Number Index (LNI) variable (business tendency index) affects Local Number Portability (LNP) variable (Islamic bank financing). The LNP variable (Islamic bank financing) does not affect this variable (business tendency index). So, there is one-way causality from the LNI (business tendency index) to LNP (Islamic bank financing). Other statistical test results showed that there is a long-term relationship between Islamic bank financing and business tendency. This is clarified by the results obtained from Johansen cointegration test. The result of cointegration test in this research is there is long-term relationship between syariah bank financing and business tendency. From the test results can be seen that the trace statistic is greater than the critical value of 5%. So in the long term, Islamic financing variables and business tendencies will affect each other. This shows that the financing of sharia banks whose allocation of financing is directed to the real sector, even forbidden to finance riba investments and speculation, will drive the business nationally, and vice versa, business that runs well and smoothly, will contribute to the development of Islamic banking performance.

Keywords: business tendency; conventional banks; Islamic banks; Islamic Bank financing; Johansen Cointegration test (search for similar items in EconPapers)
JEL-codes: Z23 Z29 (search for similar items in EconPapers)
Date: 2019
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ssi:jouesi:v:7:y:2019:i:1:p:133-145

DOI: 10.9770/jesi.2019.7.1(11)

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