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Abstract
Introduction
Murabaha financing accounts for the largest portion of Sharia bank financing, and many previous studies have analyzed this topic using symmetric impact. However, studies using the asymmetric link, a common phenomenon in economic theory, are limited.
Objectives
This study explores the determinants of Murabaha financing with symmetric and asymmetric approaches.
Method
The explanatory variables are the bank-specific variables in the form of the Murabaha financing rate, the cost of borrowing money, and the macroeconomic conditions in the form of the Industrial Production Index, which is a proxy of domestic output. The period of study is from 2010 to 2021 using monthly data. The method is Autoregressive distributed lag (ARDL) for symmetric analysis and non-linear ARDL (NARDL) for asymmetric analysis.
Results
The symmetric effect method indicates that the Murabaha financing rate negatively affects Murabaha financing, but the Industrial Production Index has no effect on Murabaha financing. The asymmetric effect method suggests that the Murabaha financing rate and Industrial Production Index asymmetrically affect Murabaha financing.
Implications
Murabaha financing will experience a drastic fall if there is a rise in the Murabaha financing rate, but a fall in the Murabaha financing rate will not have an impact on an increase in Murabaha financing. Economic upturns boost Murabaha financing, but economic downturns have no impact on Murabaha financing.
Originality/Novelty
The main contribution of our research is evidence of the asymmetric response of Murabaha financing to bank-specific variables as well as macroeconomic conditions in which Sharia banks are resilient to the business cycle.
Keywords
Article Details
Copyright (c) 2023 Agus Widarjono, Munrokhim Misanam
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References
Alsyahrin, D. P., Atahau, A. D. R., & Robiyanto, R. (2018). The effect of liquidity risk, financing risk, and operational risk toward Indonesian sharia bank’s financing with bank size as a moderating variable. Journal of Economics, Business, & Accountancy Ventura, 21(2), 241–249. https://doi.org/10.14414/jebav.v21i2.1181
Caporale, G. M., Çatık, A. N., Helmi, M. H., Menla Ali, F., & Tajik, M. (2020). The bank lending channel in the Malaysian Islamic and conventional banking system. Global Finance Journal, 45, 100478. https://doi.org/10.1016/j.gfj.2019.100478
Fitrah, R. (2018). Menelisik mekanisme pembentukan bank umum syariah di Indonesia [Examining the mechanism for establishing sharia commercial banks in Indonesia]. Jurnal As-Salam, 1(3), 106–118. https://jurnal-assalam.org/index.php/JAS/article/view/87
Hiya, N., Siregar, S., & Pane, S. G. (2022). Analisis penerapan akuntansi murabahah dalam pembiayaan KPR syariah ditinjau dari PSAK No.102 pada Bank Syariah Indonesia [Analysis of the application of murabahah accounting in sharia mortgage financing in terms of PSAK No.102 at Bank Syariah Indonesia]. Ekonomi, Keuangan, Investasi Dan Syariah (EKUITAS), 4(1), 70–73. https://doi.org/10.47065/ekuitas.v4i1.1298
Hutapea, E. G., & Kasri, R. A. (2010). Bank margin determination: A comparison between Islamic and conventional banks in Indonesia. International Journal of Islamic and Middle Eastern Finance and Management, 3(1), 65–82. https://doi.org/10.1108/17538391011033870
Ibrahim, M. H. (2016). Business cycle and bank lending procyclicality in a dual banking system. Economic Modelling, 55, 127–134. https://doi.org/10.1016/j.econmod.2016.01.013
Karim, B. A., Karim, Z. A., & Shukri, M. H. M. (2017). Determinants of Islamic bank financing in Malaysia: An empirical study using linear and nonlinear ARDL model. Jurnal Ekonomi Malaysia, 51(2), 17–26. https://doi.org/10.17576/JEM-2017-5001-2
Khodiron, K., Fitriyani, F., & Maulana, M. A. (2022). Peran perbankan syariah dalam pembangunan mikro ekonomi Indonesia [The role of sharia banking in Indonesia’s microeconomic development]. The Academy Of Management and Business, 1(3), 113–118. https://doi.org/10.55824/tamb.v1i3.181
Kristianti, D. S. (2015). Rekonstruksi dual banking system: Keberadaan prinsip-prinsip syariah perbankan dalam sistem hukum perbankan nasional [Reconstruction of the dual banking system: the existence of sharia banking principles in the national banking legal system]. Veritas et Justitia, 1(2), 329–355. https://doi.org/10.25123/vej.v1i2.1691
Louhichi, A., & Boujelbene, Y. (2016). Credit risk, managerial behaviour and macroeconomic equilibrium within dual banking systems: Interest-free vs. interest-based banking industries. Research in International Business and Finance, 38, 104–121. https://doi.org/10.1016/j.ribaf.2016.03.014
Mauluddin, M. S. (2018). Pembiayaan murabahah dalam perspektif Fatwa DSNMUI [Murabahah financing from the Fatwa of National Sharia Board – Indonesian Ulama Council (DSN-MUI) perspective]. Qawãnïn Journal of Economic Syaria Law, 2(1), 1–19. https://doi.org/10.30762/q.v2i1.1044
Otoritas Jasa Keuangan. (2023, March). Statistik perbankan syariah—Januari 2023 [Islamic banking statistics—January 2023] [HTML]. Otoritas Jasa Keuangan. https://ojk.go.id/id/kanal/syariah/data-dan-statistik/statistik-perbankan-syariah/Pages/Statistik-Perbankan-Syariah---Januari-2023.aspx
Pesaran, M. H., & Shin, Y. (1998). An autoregressive distributed-lag modelling approach to cointegration analysis. In S. Strøm (Ed.), Econometrics and economic theory in the 20th Century: The Ragnar Frisch centennial symposium (pp. 371–413). Cambridge University Press. https://doi.org/10.1017/CCOL0521633230.011
Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326. https://doi.org/10.1002/jae.616
Rahmatika, A. N. (2014). Dual banking system di Indonesia [Dual banking system in Indonesia]. At-Tahdzib: Jurnal Studi Islam Dan Muamalah, 2(2), 133–147. https://ejournal.staiat-tahdzib.ac.id/tahdzib/article/view/35
Rashid, A., Hassan, M. K., & Shah, M. A. R. (2020). On the role of Islamic and conventional banks in the monetary policy transmission in Malaysia: Do size and liquidity matter? Research in International Business and Finance, 52, 101123. https://doi.org/10.1016/j.ribaf.2019.101123
Rianda, C. N. (2018). Konversi bank konvensional menjadi bank syariah ditinjau dari hukum positif dan hukum Islam [The conversion of conventional banks into sharia banks is viewed from positive law and Islamic law]. At-Tasyri’: Jurnal Ilmiah Prodi Muamalah, 10(2), 87–100. https://doi.org/10.47498/tasyri.v10i2.214
Risfandy, T., Harahap, B., Hakim, A. R., Sutaryo, S., Nugroho, L. I., & Trinugroho, I. (2020). Equity financing at Islamic banks: Do competition and bank fundamentals matter? Emerging Markets Finance and Trade, 56(2), 314–328. https://doi.org/10.1080/1540496X.2018.1553160
Saeed, S. M., Abdeljawad, I., Hassan, M. K., & Rashid, M. (2021). Dependency of Islamic bank rates on conventional rates in a dual banking system: A trade-off between religious and economic fundamentals. International Review of Economics and Finance, forthcomming. https://doi.org/10.1016/j.iref.2021.09.013
Šeho, M., Bacha, O. I., & Smolo, E. (2020). The effects of interest rate on Islamic bank financing instruments: Cross-country evidence from dual-banking systems. Pacific-Basin Finance Journal, 62, 101292. https://doi.org/10.1016/j.pacfin.2020.101292
Shin, Y., Yu, B., & Greenwood-Nimmo, M. (2014). Modelling asymmetric cointegration and dynamic multipliers in a nonlinear ARDL framework. In R. C. Sickles & W. C. Horrace (Eds.), Festschrift in Honor of Peter Schmidt (pp. 281–314). Springer New York. https://doi.org/10.1007/978-1-4899-8008-3_9
Stein, J. C. (1998). An adverse-selection model of bank asset and liability management with implications for the transmission of monetary policy. The RAND Journal of Economics, 29(3), 466–486. https://doi.org/10.2307/2556100
Sudarsono, H. (2017). Modelling respon rasio keuangan terhadap pembiayaan pada bank syariah di Indonesia [Modeling the response of financial ratios to financing in Islamic banks in Indonesia]. JESI (Jurnal Ekonomi Syariah Indonesia), 7(1), 1–13. https://doi.org/10.21927/jesi.2017.7(1).1-13
Sudarsono, H., & Shiddiqi, J. S. A. (2021). Equity financing, debt financing, and financial performance in Islamic banks. Muqtasid: Jurnal Ekonomi Dan Perbankan Syariah, 12(2), 89–104. https://doi.org/10.18326/muqtasid.v12i2.89-104
Sukmana, R., & Ibrahim, M. H. (2017). How Islamic are Islamic banks? A non-linear assessment of Islamic rate – conventional rate relations. Economic Modelling, 64, 443–448. https://doi.org/10.1016/j.econmod.2017.02.025
Sutrisno, S., & Widarjono, A. (2022). Is profit–loss-sharing financing matter for Islamic bank’s profitability? The Indonesian case. Risks, 10(11), Article 11. https://doi.org/10.3390/risks10110207
Syaifullah, H. (2019). Penerapan Fatwa DSN-MUI tentang murabahah di bank syariah [Implementation of the Fatwa of National Sharia Board – Indonesian Ulama Council (DSN-MUI) regarding murabahah in sharia banks]. Kordinat: Jurnal Komunikasi Antar Perguruan Tinggi Agama Islam, 17(2), 257–282. https://doi.org/10.15408/kordinat.v17i2.9612
Tappata, M. (2009). Rockets and feathers: Understanding asymmetric pricing. The RAND Journal of Economics, 40(4), 673–687. https://doi.org/10.1111/j.1756-2171.2009.00084.x
Trinugroho, I., Risfandy, T., & Ariefianto, M. D. (2018). Competition , diversification , and bank margins: Evidence from Indonesian Islamic rural banks. Borsa Istanbul Review, 18(4), 349–358. https://doi.org/10.1016/j.bir.2018.07.006
Widarjono, A. (2018). Estimating profitability of Islamic banking in Indonesia. Jurnal Keuangan Dan Perbankan, 22(3), 568–679. https://doi.org/10.26905/jkdp.v22i3.2197
Widarjono, A., Alam, M. M., & Rafik, A. (2023). The dynamic link between Islamic and conventional deposit rates in a dual banking system. ISRA International Journal of Islamic Finance, 15(1), 91–108. https://doi.org/10.55188/ijif.v15i1.487
Widarjono, A., & Rafik, A. (2023). Do Islamic banks have their benchmarks for financing rates in the dual banking system? Cogent Economics & Finance, 11(1), 1–17. https://doi.org/10.1080/23322039.2023.2209954
Widarjono, A., & Rudatin, A. (2021). Financing diversification and Indonesian Islamic bank’s non-performing financing. Jurnal Ekonomi & Keuangan Islam, 7(1), 45–58. https://doi.org/10.20885/jeki.vol7.iss1.art4
Widarjono, A., Suharto, S., & Wijayanti, D. (2022). Do Islamic banks bear displaced commercial risk? Evidence from Indonesia. Banks and Bank Systems, 17(3), 102–115. https://doi.org/10.21511/bbs.17(3).2022.09
Widuhung, S. D., & Machmud, A. (2022). Indonesian Islamic banking in mastering the global halal value chain: Opportunities and challenges from economics and legal aspects. Jurnal Ekonomi, Manajemen, Akuntansi Dan Keuangan, 3(4), 1343–1352. https://doi.org/10.53697/emak.v3i4.600
Yusuf, M. (2013). Analisis penerapan pembiayaan murabahah berdasarkan pesanan dan tanpa pesanan serta kesesuaian dengan PSAK 102 [Analysis of the application of murabahah financing based on orders and without orders and conformity with PSAK 102]. Binus Business Review, 4(1), 15–29. https://doi.org/10.21512/bbr.v4i1.1032
Zulkhibri, M., & Sukmana, R. (2017). Financing channels and monetary policy in a dual banking system: Evidence from Islamic banks in Indonesia. Economic Notes, 46(1), 117–143. https://doi.org/10.1111/ecno.12076
References
Alsyahrin, D. P., Atahau, A. D. R., & Robiyanto, R. (2018). The effect of liquidity risk, financing risk, and operational risk toward Indonesian sharia bank’s financing with bank size as a moderating variable. Journal of Economics, Business, & Accountancy Ventura, 21(2), 241–249. https://doi.org/10.14414/jebav.v21i2.1181
Caporale, G. M., Çatık, A. N., Helmi, M. H., Menla Ali, F., & Tajik, M. (2020). The bank lending channel in the Malaysian Islamic and conventional banking system. Global Finance Journal, 45, 100478. https://doi.org/10.1016/j.gfj.2019.100478
Fitrah, R. (2018). Menelisik mekanisme pembentukan bank umum syariah di Indonesia [Examining the mechanism for establishing sharia commercial banks in Indonesia]. Jurnal As-Salam, 1(3), 106–118. https://jurnal-assalam.org/index.php/JAS/article/view/87
Hiya, N., Siregar, S., & Pane, S. G. (2022). Analisis penerapan akuntansi murabahah dalam pembiayaan KPR syariah ditinjau dari PSAK No.102 pada Bank Syariah Indonesia [Analysis of the application of murabahah accounting in sharia mortgage financing in terms of PSAK No.102 at Bank Syariah Indonesia]. Ekonomi, Keuangan, Investasi Dan Syariah (EKUITAS), 4(1), 70–73. https://doi.org/10.47065/ekuitas.v4i1.1298
Hutapea, E. G., & Kasri, R. A. (2010). Bank margin determination: A comparison between Islamic and conventional banks in Indonesia. International Journal of Islamic and Middle Eastern Finance and Management, 3(1), 65–82. https://doi.org/10.1108/17538391011033870
Ibrahim, M. H. (2016). Business cycle and bank lending procyclicality in a dual banking system. Economic Modelling, 55, 127–134. https://doi.org/10.1016/j.econmod.2016.01.013
Karim, B. A., Karim, Z. A., & Shukri, M. H. M. (2017). Determinants of Islamic bank financing in Malaysia: An empirical study using linear and nonlinear ARDL model. Jurnal Ekonomi Malaysia, 51(2), 17–26. https://doi.org/10.17576/JEM-2017-5001-2
Khodiron, K., Fitriyani, F., & Maulana, M. A. (2022). Peran perbankan syariah dalam pembangunan mikro ekonomi Indonesia [The role of sharia banking in Indonesia’s microeconomic development]. The Academy Of Management and Business, 1(3), 113–118. https://doi.org/10.55824/tamb.v1i3.181
Kristianti, D. S. (2015). Rekonstruksi dual banking system: Keberadaan prinsip-prinsip syariah perbankan dalam sistem hukum perbankan nasional [Reconstruction of the dual banking system: the existence of sharia banking principles in the national banking legal system]. Veritas et Justitia, 1(2), 329–355. https://doi.org/10.25123/vej.v1i2.1691
Louhichi, A., & Boujelbene, Y. (2016). Credit risk, managerial behaviour and macroeconomic equilibrium within dual banking systems: Interest-free vs. interest-based banking industries. Research in International Business and Finance, 38, 104–121. https://doi.org/10.1016/j.ribaf.2016.03.014
Mauluddin, M. S. (2018). Pembiayaan murabahah dalam perspektif Fatwa DSNMUI [Murabahah financing from the Fatwa of National Sharia Board – Indonesian Ulama Council (DSN-MUI) perspective]. Qawãnïn Journal of Economic Syaria Law, 2(1), 1–19. https://doi.org/10.30762/q.v2i1.1044
Otoritas Jasa Keuangan. (2023, March). Statistik perbankan syariah—Januari 2023 [Islamic banking statistics—January 2023] [HTML]. Otoritas Jasa Keuangan. https://ojk.go.id/id/kanal/syariah/data-dan-statistik/statistik-perbankan-syariah/Pages/Statistik-Perbankan-Syariah---Januari-2023.aspx
Pesaran, M. H., & Shin, Y. (1998). An autoregressive distributed-lag modelling approach to cointegration analysis. In S. Strøm (Ed.), Econometrics and economic theory in the 20th Century: The Ragnar Frisch centennial symposium (pp. 371–413). Cambridge University Press. https://doi.org/10.1017/CCOL0521633230.011
Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326. https://doi.org/10.1002/jae.616
Rahmatika, A. N. (2014). Dual banking system di Indonesia [Dual banking system in Indonesia]. At-Tahdzib: Jurnal Studi Islam Dan Muamalah, 2(2), 133–147. https://ejournal.staiat-tahdzib.ac.id/tahdzib/article/view/35
Rashid, A., Hassan, M. K., & Shah, M. A. R. (2020). On the role of Islamic and conventional banks in the monetary policy transmission in Malaysia: Do size and liquidity matter? Research in International Business and Finance, 52, 101123. https://doi.org/10.1016/j.ribaf.2019.101123
Rianda, C. N. (2018). Konversi bank konvensional menjadi bank syariah ditinjau dari hukum positif dan hukum Islam [The conversion of conventional banks into sharia banks is viewed from positive law and Islamic law]. At-Tasyri’: Jurnal Ilmiah Prodi Muamalah, 10(2), 87–100. https://doi.org/10.47498/tasyri.v10i2.214
Risfandy, T., Harahap, B., Hakim, A. R., Sutaryo, S., Nugroho, L. I., & Trinugroho, I. (2020). Equity financing at Islamic banks: Do competition and bank fundamentals matter? Emerging Markets Finance and Trade, 56(2), 314–328. https://doi.org/10.1080/1540496X.2018.1553160
Saeed, S. M., Abdeljawad, I., Hassan, M. K., & Rashid, M. (2021). Dependency of Islamic bank rates on conventional rates in a dual banking system: A trade-off between religious and economic fundamentals. International Review of Economics and Finance, forthcomming. https://doi.org/10.1016/j.iref.2021.09.013
Šeho, M., Bacha, O. I., & Smolo, E. (2020). The effects of interest rate on Islamic bank financing instruments: Cross-country evidence from dual-banking systems. Pacific-Basin Finance Journal, 62, 101292. https://doi.org/10.1016/j.pacfin.2020.101292
Shin, Y., Yu, B., & Greenwood-Nimmo, M. (2014). Modelling asymmetric cointegration and dynamic multipliers in a nonlinear ARDL framework. In R. C. Sickles & W. C. Horrace (Eds.), Festschrift in Honor of Peter Schmidt (pp. 281–314). Springer New York. https://doi.org/10.1007/978-1-4899-8008-3_9
Stein, J. C. (1998). An adverse-selection model of bank asset and liability management with implications for the transmission of monetary policy. The RAND Journal of Economics, 29(3), 466–486. https://doi.org/10.2307/2556100
Sudarsono, H. (2017). Modelling respon rasio keuangan terhadap pembiayaan pada bank syariah di Indonesia [Modeling the response of financial ratios to financing in Islamic banks in Indonesia]. JESI (Jurnal Ekonomi Syariah Indonesia), 7(1), 1–13. https://doi.org/10.21927/jesi.2017.7(1).1-13
Sudarsono, H., & Shiddiqi, J. S. A. (2021). Equity financing, debt financing, and financial performance in Islamic banks. Muqtasid: Jurnal Ekonomi Dan Perbankan Syariah, 12(2), 89–104. https://doi.org/10.18326/muqtasid.v12i2.89-104
Sukmana, R., & Ibrahim, M. H. (2017). How Islamic are Islamic banks? A non-linear assessment of Islamic rate – conventional rate relations. Economic Modelling, 64, 443–448. https://doi.org/10.1016/j.econmod.2017.02.025
Sutrisno, S., & Widarjono, A. (2022). Is profit–loss-sharing financing matter for Islamic bank’s profitability? The Indonesian case. Risks, 10(11), Article 11. https://doi.org/10.3390/risks10110207
Syaifullah, H. (2019). Penerapan Fatwa DSN-MUI tentang murabahah di bank syariah [Implementation of the Fatwa of National Sharia Board – Indonesian Ulama Council (DSN-MUI) regarding murabahah in sharia banks]. Kordinat: Jurnal Komunikasi Antar Perguruan Tinggi Agama Islam, 17(2), 257–282. https://doi.org/10.15408/kordinat.v17i2.9612
Tappata, M. (2009). Rockets and feathers: Understanding asymmetric pricing. The RAND Journal of Economics, 40(4), 673–687. https://doi.org/10.1111/j.1756-2171.2009.00084.x
Trinugroho, I., Risfandy, T., & Ariefianto, M. D. (2018). Competition , diversification , and bank margins: Evidence from Indonesian Islamic rural banks. Borsa Istanbul Review, 18(4), 349–358. https://doi.org/10.1016/j.bir.2018.07.006
Widarjono, A. (2018). Estimating profitability of Islamic banking in Indonesia. Jurnal Keuangan Dan Perbankan, 22(3), 568–679. https://doi.org/10.26905/jkdp.v22i3.2197
Widarjono, A., Alam, M. M., & Rafik, A. (2023). The dynamic link between Islamic and conventional deposit rates in a dual banking system. ISRA International Journal of Islamic Finance, 15(1), 91–108. https://doi.org/10.55188/ijif.v15i1.487
Widarjono, A., & Rafik, A. (2023). Do Islamic banks have their benchmarks for financing rates in the dual banking system? Cogent Economics & Finance, 11(1), 1–17. https://doi.org/10.1080/23322039.2023.2209954
Widarjono, A., & Rudatin, A. (2021). Financing diversification and Indonesian Islamic bank’s non-performing financing. Jurnal Ekonomi & Keuangan Islam, 7(1), 45–58. https://doi.org/10.20885/jeki.vol7.iss1.art4
Widarjono, A., Suharto, S., & Wijayanti, D. (2022). Do Islamic banks bear displaced commercial risk? Evidence from Indonesia. Banks and Bank Systems, 17(3), 102–115. https://doi.org/10.21511/bbs.17(3).2022.09
Widuhung, S. D., & Machmud, A. (2022). Indonesian Islamic banking in mastering the global halal value chain: Opportunities and challenges from economics and legal aspects. Jurnal Ekonomi, Manajemen, Akuntansi Dan Keuangan, 3(4), 1343–1352. https://doi.org/10.53697/emak.v3i4.600
Yusuf, M. (2013). Analisis penerapan pembiayaan murabahah berdasarkan pesanan dan tanpa pesanan serta kesesuaian dengan PSAK 102 [Analysis of the application of murabahah financing based on orders and without orders and conformity with PSAK 102]. Binus Business Review, 4(1), 15–29. https://doi.org/10.21512/bbr.v4i1.1032
Zulkhibri, M., & Sukmana, R. (2017). Financing channels and monetary policy in a dual banking system: Evidence from Islamic banks in Indonesia. Economic Notes, 46(1), 117–143. https://doi.org/10.1111/ecno.12076