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Abstract
The contribution of the agricultural sector towards East Java’s Gross Domestic Product (GDP) in 2008 recorded at 16.55%, however, it shrinks to 13.75% in 2015. This statistic shows the regressed contribution of the agriculture sector in comparison to other economic sectors. One common view that linked to shrinking in credit composition is due to the lack of credit accessibility for the sector. Given this issue, this paper attempts to propose a viable financing model to develop the agricultural sector in East Java known as Integrated Agricultural Land Crowdfunding Model (IALCM) using Islamic financing instruments in form of a crowd funding platform. This model is expected to offer farmers in East Java to meet their liquidity constraints and the Indonesian government to accelerate social entrepreneurship innovation. Lastly, several challenges and conceivable recommendations have been deliberated for the development of the agricultural sector in East Java.
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References
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- Agrawal, A., Catalini, C., & Goldfarb, A. (2013). Some simple economics of crowdfunding. National Bureau of Economic Research (NBER) Working Paper No. w19133.
- Agrawal, A., Catalini, C., & Goldfarb, A. (2015). Crowdfunding: geography, social networks, and the timing of investment decisions. Journal of Economics and Management Strategy, 24(2), 253–274. DOI: 10.1111/jems.12093
- Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179-211. DOI: 10.1016/0749-5978(91)90020-T
- Allison, T. H., Davis, B. C., Short, J. C., & Webb., J. W. (2015). Crowdfunding in a prosocial microlending environment: examining the role of intrinsic versus extrinsic cues. Entrepreneurship Theory and Practice, 39(1), 53-73. DOI: 10.1111/etap.12108
- Asnawi, A., A.A. Amrawaty, & Nirwana. 2018. Mukhabarah as sharia financing model in beef cattle farm entreprise. IOP Conf. Series: Earth and Environmental Science.
- Belleflamme, P., Lambert, T., & Schwienbacher, A. (2010). Crowdfunding: an industrial organization perspective. Workshop on Digital Business Models: Understanding Strategies, Held in Paris in June 2010.
- Belleflamme, P., Lambert, T., & Schwienbacher, A. (2013). Crowdfunding: tapping the right crowd. Journal of Business Venturing, 29(5), 585-609. DOI: 10.2139/ssrn.1578175
- Bruntje, D., & Gajda, O. (2016). Crowdfunding in Europe, state of the art in theory and practice. Switzerland: Springer International Publishing.
- Colombo, M. G., Franzoni, C., & Rossi-Lamastra, C. (2015). Internal social capital and the attraction of early contributions in crowdfunding projects. Entrepreneurship Theory and Practice, 39(1), 75-100. DOI: 10.1111/etap.12118
- Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of information technology, MIS Quarterly, 13(1), 983-1003. DOI: 10.2307/249008
- Dusuki, A. W., & Abdullah, N. I. (2007). Why do Malaysian customers patronize Islamic banks? International Journal of Bank Marketing, 25(3), 142-160. DOI: 10.1108/02652320710739850
- Erol, C., Kaynak, E. & El-Bdour, R. (1990). Conventional and Islamic banks: patronage behavior of Jordanian customers, International Journal of Bank Marketing, 8(4), 25-35. DOI:10.1108/02652329010004231
- Fazlan, S., & Mohammad, A. (2007). The efficiency of Islamic banks: empirical evidence from the MENA and Asian countries Islamic banking sectors. Paper presented at the Fifth International Islamic Finance Conference, September 3-4, Kuala Lumpur.
- Fishbein, M., & Ajzen, I. (1975). Belief, attitude, intention and behaviour: an introduction to theory and research. Penn State University Press, US.
- Freedman, S., & Jin, G. (2014). The signaling value of online social networks: lessons from peer-to-peer lending. National Bureau of Economic Research (NBER) Working Paper No. 19820, 48 -70.
- Gerber, E., Hui, J., & Kuo, P. (2012). Crowdfunding: why people are motivated to post and fund projects on crowdfunding platforms. in computer-supported cooperative work (CSCW) Workshop, 2012.
- Gleasure, R., & Feller, J. (2016). Emerging technologies and the democratisation of financial services: A meta triangulation of crowdfunding research. Information and Organization, 26 (4), 101-115. DOI: 10.1016/j.infoandorg.2016.09.001
- Gorbatai, A. D., & Nelson, L. (2015). Gender and the language of crowdfunding. Academy of Management Proceedings 1.
- Harjanto, J.T. (2011). Precision agriculture toward sustainable food sovereignty. Badan Penyuluhan dan Pengembangan Sumber Daya Manusia Pertanian (BPPSDMP), Ministry of Agriculture, Rep. of Indonesia.
- Herzenstein, M., Sonenshein, S., & Dholakia, U. M. (2011). Tell me a good story and I may lend you money: the role of narratives in peer-to-peer lending decisions. Journal of Marketing Research, 48(2), 138-149. DOI:10.1509/jmkr.48.SPL.S138
- Hulme, M., & Wright, C. (2006). Internet-based social lending: Past, present and future. Social Futures Observatory.
- Ingram, C., Teigland, R., & Vaast, E. (2014). Solving the puzzle of crowdfunding: where technology affordances and institutional entrepreneurship collide. In System Sciences (HICSS), 2014 47th Hawaii International Conference On, IEEE, 4556-4567.
- International Organization of Securities Commissions (IOSCO). (2004). Islamic Capital Market Fact-Finding Report, July 2004, p10 available at www.iasplus.com/resource/ioscoislamiccapitalmarkets.pdf (Accessed on 22 Feb 2018).
- Kuppuswamy, V., & Bayus, B. L. (2018). Crowdfunding creative ideas: the dynamics of project backers. In H. L. Cumming D., The Economics of Crowdfunding. (pp. 151-182). Cham: Palgrave Macmillan.
- Lu, C.-T., Xie, S., Kong, X., & Yu, P. S. (2014). Inferring the impacts of social media on crowdfunding. Proceeding WSDM 14 Proceedings of the 7th ACM international conference on Web search and data mining, 573-582. DOI: 10.1145/2556195.2556251
- Marom, D., Robb, A., & Sade, O. (2016). Gender dynamics in crowdfunding (Kickstarter): evidence on entrepreneurs, investors, deals and taste-based discrimination. Social Science Research Network.
- Marzban, S., Asutay, M., & Boseli, A. (2014). Shariah-compliant crowdfunding: An efficient framework for entrepreneurship development in Islamic Countries. Paper presented at the Harvard Islamic Finance Forum, Boston, USA.
- Meyer, R.L. (2013). Microcredit and agriculture: challenges, successes and prospects. In Microfinance in Developing Countries: Issues, Policies and Performance Evaluation, by Jean-Pierre Gueyie, Ronny Manos and Jacob Yaron, 199-226. London: Palgrave Macmillan, a division of Macmillan Publishers Limited. DOI: 10.1057/9781137301925_10
- Mollick, E. R. (2013). The dynamics of crowdfunding: determinants of success and failure. Social Science Research Network, Electronic Journal, 29(1). DOI:10.2139/ssrn.2088298
- Mollick, E. R. (2014). The dynamics of crowdfunding: an exploratory study. Journal of Business Venturing, 29(2), 1-16. DOI: 10.1016/j.jbusvent.2013.06.005
- Moritz, A., & Block, J. (2016). Crowdfunding: a literature review and research directions. In D. Bruntje, & O. Gajda, Crowdfunding in Europe, State of the Art in Theory and Practice (25-53). Switzerland: Springer International Publishing.
- Riethmuller, P. (1999). The Indonesian feed and livestock sector. a statistical overview. In Livestock Industries of Indonesia Prior to the Asian Financial Crisis, by Food and Agriculture Organization of the United Nations (Regional Office for Asia and the Pacific), 107-198. Bangkok: RAP Publication.
- Sirajuddin, S.N, Aminawar, M., Amrawaty, A., & Nurlaelah, S. (2015). The application of Tesang sharing system at cattle farm in Indonesia. Proceedings of the 3rd International Seminar on Animal Industry, Bogor, 17-18 September 2015. Bogor: Faculty of Animal Science Bogor Agricultural University.
- Suprapto, A. (2002). Land and water resources development in Indonesia. In Investment in Land and Water (Proceedings of the Regional Consultation), by Food and Agriculture Organization of the United Nations. Bangkok: RAP Publication.
- Smith, S., Windmeijer, F., & Wright, E. (2014). Peer Effects in Charitable Giving: Evidence from the (Running) Field. The Economic Journal 125 (35), 1053-1071. DOI: 10.1111/ecoj.12114
- Thaker, M.A.M. & Thaker, H.M.T (2018). SMEs financing and the potential of crowdfunding. Working paper
- The World Bank. (2017). Indonesia GDP Share of Agriculture.
- Zhang, Juanjuan, & Liu, P. (2012). Rational herding in microloan markets. Management Science, 58(3), 892–912. DOI: 10.2307/41499528
- Zyl, J. Van, H.J.G. Nel, & J. A. Groenewald. (1988). Agricultures contribution to the South African economy. Agricultural Economics Research, Policy and Practice in Southern Africa, 27(2), 1-9. DOI: 10.1080/03031853.1988.9524124
References
Abdullah, A. (2016). Crowdfunding as an emerging fundraising tool: with special reference to the Malaysian regulatory framework. Islam and Civilisational Renewal, (1), 98-119.
Agrawal, A., Catalini, C., & Goldfarb, A. (2013). Some simple economics of crowdfunding. National Bureau of Economic Research (NBER) Working Paper No. w19133.
Agrawal, A., Catalini, C., & Goldfarb, A. (2015). Crowdfunding: geography, social networks, and the timing of investment decisions. Journal of Economics and Management Strategy, 24(2), 253–274. DOI: 10.1111/jems.12093
Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179-211. DOI: 10.1016/0749-5978(91)90020-T
Allison, T. H., Davis, B. C., Short, J. C., & Webb., J. W. (2015). Crowdfunding in a prosocial microlending environment: examining the role of intrinsic versus extrinsic cues. Entrepreneurship Theory and Practice, 39(1), 53-73. DOI: 10.1111/etap.12108
Asnawi, A., A.A. Amrawaty, & Nirwana. 2018. Mukhabarah as sharia financing model in beef cattle farm entreprise. IOP Conf. Series: Earth and Environmental Science.
Belleflamme, P., Lambert, T., & Schwienbacher, A. (2010). Crowdfunding: an industrial organization perspective. Workshop on Digital Business Models: Understanding Strategies, Held in Paris in June 2010.
Belleflamme, P., Lambert, T., & Schwienbacher, A. (2013). Crowdfunding: tapping the right crowd. Journal of Business Venturing, 29(5), 585-609. DOI: 10.2139/ssrn.1578175
Bruntje, D., & Gajda, O. (2016). Crowdfunding in Europe, state of the art in theory and practice. Switzerland: Springer International Publishing.
Colombo, M. G., Franzoni, C., & Rossi-Lamastra, C. (2015). Internal social capital and the attraction of early contributions in crowdfunding projects. Entrepreneurship Theory and Practice, 39(1), 75-100. DOI: 10.1111/etap.12118
Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of information technology, MIS Quarterly, 13(1), 983-1003. DOI: 10.2307/249008
Dusuki, A. W., & Abdullah, N. I. (2007). Why do Malaysian customers patronize Islamic banks? International Journal of Bank Marketing, 25(3), 142-160. DOI: 10.1108/02652320710739850
Erol, C., Kaynak, E. & El-Bdour, R. (1990). Conventional and Islamic banks: patronage behavior of Jordanian customers, International Journal of Bank Marketing, 8(4), 25-35. DOI:10.1108/02652329010004231
Fazlan, S., & Mohammad, A. (2007). The efficiency of Islamic banks: empirical evidence from the MENA and Asian countries Islamic banking sectors. Paper presented at the Fifth International Islamic Finance Conference, September 3-4, Kuala Lumpur.
Fishbein, M., & Ajzen, I. (1975). Belief, attitude, intention and behaviour: an introduction to theory and research. Penn State University Press, US.
Freedman, S., & Jin, G. (2014). The signaling value of online social networks: lessons from peer-to-peer lending. National Bureau of Economic Research (NBER) Working Paper No. 19820, 48 -70.
Gerber, E., Hui, J., & Kuo, P. (2012). Crowdfunding: why people are motivated to post and fund projects on crowdfunding platforms. in computer-supported cooperative work (CSCW) Workshop, 2012.
Gleasure, R., & Feller, J. (2016). Emerging technologies and the democratisation of financial services: A meta triangulation of crowdfunding research. Information and Organization, 26 (4), 101-115. DOI: 10.1016/j.infoandorg.2016.09.001
Gorbatai, A. D., & Nelson, L. (2015). Gender and the language of crowdfunding. Academy of Management Proceedings 1.
Harjanto, J.T. (2011). Precision agriculture toward sustainable food sovereignty. Badan Penyuluhan dan Pengembangan Sumber Daya Manusia Pertanian (BPPSDMP), Ministry of Agriculture, Rep. of Indonesia.
Herzenstein, M., Sonenshein, S., & Dholakia, U. M. (2011). Tell me a good story and I may lend you money: the role of narratives in peer-to-peer lending decisions. Journal of Marketing Research, 48(2), 138-149. DOI:10.1509/jmkr.48.SPL.S138
Hulme, M., & Wright, C. (2006). Internet-based social lending: Past, present and future. Social Futures Observatory.
Ingram, C., Teigland, R., & Vaast, E. (2014). Solving the puzzle of crowdfunding: where technology affordances and institutional entrepreneurship collide. In System Sciences (HICSS), 2014 47th Hawaii International Conference On, IEEE, 4556-4567.
International Organization of Securities Commissions (IOSCO). (2004). Islamic Capital Market Fact-Finding Report, July 2004, p10 available at www.iasplus.com/resource/ioscoislamiccapitalmarkets.pdf (Accessed on 22 Feb 2018).
Kuppuswamy, V., & Bayus, B. L. (2018). Crowdfunding creative ideas: the dynamics of project backers. In H. L. Cumming D., The Economics of Crowdfunding. (pp. 151-182). Cham: Palgrave Macmillan.
Lu, C.-T., Xie, S., Kong, X., & Yu, P. S. (2014). Inferring the impacts of social media on crowdfunding. Proceeding WSDM 14 Proceedings of the 7th ACM international conference on Web search and data mining, 573-582. DOI: 10.1145/2556195.2556251
Marom, D., Robb, A., & Sade, O. (2016). Gender dynamics in crowdfunding (Kickstarter): evidence on entrepreneurs, investors, deals and taste-based discrimination. Social Science Research Network.
Marzban, S., Asutay, M., & Boseli, A. (2014). Shariah-compliant crowdfunding: An efficient framework for entrepreneurship development in Islamic Countries. Paper presented at the Harvard Islamic Finance Forum, Boston, USA.
Meyer, R.L. (2013). Microcredit and agriculture: challenges, successes and prospects. In Microfinance in Developing Countries: Issues, Policies and Performance Evaluation, by Jean-Pierre Gueyie, Ronny Manos and Jacob Yaron, 199-226. London: Palgrave Macmillan, a division of Macmillan Publishers Limited. DOI: 10.1057/9781137301925_10
Mollick, E. R. (2013). The dynamics of crowdfunding: determinants of success and failure. Social Science Research Network, Electronic Journal, 29(1). DOI:10.2139/ssrn.2088298
Mollick, E. R. (2014). The dynamics of crowdfunding: an exploratory study. Journal of Business Venturing, 29(2), 1-16. DOI: 10.1016/j.jbusvent.2013.06.005
Moritz, A., & Block, J. (2016). Crowdfunding: a literature review and research directions. In D. Bruntje, & O. Gajda, Crowdfunding in Europe, State of the Art in Theory and Practice (25-53). Switzerland: Springer International Publishing.
Riethmuller, P. (1999). The Indonesian feed and livestock sector. a statistical overview. In Livestock Industries of Indonesia Prior to the Asian Financial Crisis, by Food and Agriculture Organization of the United Nations (Regional Office for Asia and the Pacific), 107-198. Bangkok: RAP Publication.
Sirajuddin, S.N, Aminawar, M., Amrawaty, A., & Nurlaelah, S. (2015). The application of Tesang sharing system at cattle farm in Indonesia. Proceedings of the 3rd International Seminar on Animal Industry, Bogor, 17-18 September 2015. Bogor: Faculty of Animal Science Bogor Agricultural University.
Suprapto, A. (2002). Land and water resources development in Indonesia. In Investment in Land and Water (Proceedings of the Regional Consultation), by Food and Agriculture Organization of the United Nations. Bangkok: RAP Publication.
Smith, S., Windmeijer, F., & Wright, E. (2014). Peer Effects in Charitable Giving: Evidence from the (Running) Field. The Economic Journal 125 (35), 1053-1071. DOI: 10.1111/ecoj.12114
Thaker, M.A.M. & Thaker, H.M.T (2018). SMEs financing and the potential of crowdfunding. Working paper
The World Bank. (2017). Indonesia GDP Share of Agriculture.
Zhang, Juanjuan, & Liu, P. (2012). Rational herding in microloan markets. Management Science, 58(3), 892–912. DOI: 10.2307/41499528
Zyl, J. Van, H.J.G. Nel, & J. A. Groenewald. (1988). Agricultures contribution to the South African economy. Agricultural Economics Research, Policy and Practice in Southern Africa, 27(2), 1-9. DOI: 10.1080/03031853.1988.9524124