Cover Image

IT investment and Islamic banking performance in Indonesia: do sukuk issuance and shariah governance matter?

IT investment and financial performance are crucial issues for the Islamic banking industry. An Islamic banking (IB) that is established in a technologically advanced setting, employs mostly young and tech-savvy employees, and adheres to Islamic principles in all aspects of its activities, needs to...

Full description

Saved in:
Bibliographic Details
Main Authors: Effendi, Jaenal, Qoyum, Abdul, Wardhana, Leo Indra, Mohd Thas Thaker, Hassanudin
Format: Article
Language:English
English
Published: Business Perspectives 2023
Subjects:
HG3368 Islamic Banking and Finance
Online Access:http://irep.iium.edu.my/104761/3/104761_IT%20investment%20and%20Islamic%20banking%20performance%20in%20Indonesia.pdf
http://irep.iium.edu.my/104761/9/104761_IT%20investment%20and%20Islamic%20banking%20performance%20in%20Indonesia_SCOPUS.pdf
http://irep.iium.edu.my/104761/
https://www.businessperspectives.org/index.php/journals/banks-and-bank-systems
http://dx.doi.org/10.21511/bbs.18(2).2023.07
Tags: Add Tag
No Tags, Be the first to tag this record!
id my.iium.irep.104761
record_format dspace
spelling my.iium.irep.1047612024-05-20T03:56:52Z http://irep.iium.edu.my/104761/ IT investment and Islamic banking performance in Indonesia: do sukuk issuance and shariah governance matter? Effendi, Jaenal Qoyum, Abdul Wardhana, Leo Indra Mohd Thas Thaker, Hassanudin HG3368 Islamic Banking and Finance IT investment and financial performance are crucial issues for the Islamic banking industry. An Islamic banking (IB) that is established in a technologically advanced setting, employs mostly young and tech-savvy employees, and adheres to Islamic principles in all aspects of its activities, needs to invest in IT. This investment in information technology is essential if they are to remain competitive and achieve solid financial performance. This study aims to investigate the effect of IT investment on Islamic banking performance in Indonesia. The study used data of 14 Islamic banks in Indonesia, from 2012 to 2021. By employing panel regression analysis, the study revealed that IT investment has a significant impact on Islamic banking performance, indicated by ATM and Expenses for Human Resources (BG), which has the coefficient 1.75e-07 (Alpha 0.060) and 4.73e-14 (Alpha 1%), respectively. The study also documented a significant relationship between IT investment and IB performance, caused by Sukuk issuance and the Shariah supervisory board. Sukuk issuance has a negative impact on banking performance in relation to IT investment, while shariah governance (board of directors and shariah supervisory board) has a positive impact. Hence, it is also important for an Islamic banking to minimize the use of Sukuk, which until now was still categorized as debt, and to maximize the role of good governance to back up IT spending. Business Perspectives 2023-05-22 Article PeerReviewed application/pdf en http://irep.iium.edu.my/104761/3/104761_IT%20investment%20and%20Islamic%20banking%20performance%20in%20Indonesia.pdf application/pdf en http://irep.iium.edu.my/104761/9/104761_IT%20investment%20and%20Islamic%20banking%20performance%20in%20Indonesia_SCOPUS.pdf Effendi, Jaenal and Qoyum, Abdul and Wardhana, Leo Indra and Mohd Thas Thaker, Hassanudin (2023) IT investment and Islamic banking performance in Indonesia: do sukuk issuance and shariah governance matter? Banks and Bank Systems, 18 (1). pp. 75-87. ISSN 1816-7403 E-ISSN 1991-7074 https://www.businessperspectives.org/index.php/journals/banks-and-bank-systems http://dx.doi.org/10.21511/bbs.18(2).2023.07
institution Universiti Islam Antarabangsa Malaysia
building IIUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider International Islamic University Malaysia
content_source IIUM Repository (IREP)
url_provider http://irep.iium.edu.my/
language English
English
topic HG3368 Islamic Banking and Finance
spellingShingle HG3368 Islamic Banking and Finance
Effendi, Jaenal
Qoyum, Abdul
Wardhana, Leo Indra
Mohd Thas Thaker, Hassanudin
IT investment and Islamic banking performance in Indonesia: do sukuk issuance and shariah governance matter?
description IT investment and financial performance are crucial issues for the Islamic banking industry. An Islamic banking (IB) that is established in a technologically advanced setting, employs mostly young and tech-savvy employees, and adheres to Islamic principles in all aspects of its activities, needs to invest in IT. This investment in information technology is essential if they are to remain competitive and achieve solid financial performance. This study aims to investigate the effect of IT investment on Islamic banking performance in Indonesia. The study used data of 14 Islamic banks in Indonesia, from 2012 to 2021. By employing panel regression analysis, the study revealed that IT investment has a significant impact on Islamic banking performance, indicated by ATM and Expenses for Human Resources (BG), which has the coefficient 1.75e-07 (Alpha 0.060) and 4.73e-14 (Alpha 1%), respectively. The study also documented a significant relationship between IT investment and IB performance, caused by Sukuk issuance and the Shariah supervisory board. Sukuk issuance has a negative impact on banking performance in relation to IT investment, while shariah governance (board of directors and shariah supervisory board) has a positive impact. Hence, it is also important for an Islamic banking to minimize the use of Sukuk, which until now was still categorized as debt, and to maximize the role of good governance to back up IT spending.
format Article
author Effendi, Jaenal
Qoyum, Abdul
Wardhana, Leo Indra
Mohd Thas Thaker, Hassanudin
author_facet Effendi, Jaenal
Qoyum, Abdul
Wardhana, Leo Indra
Mohd Thas Thaker, Hassanudin
author_sort Effendi, Jaenal
title IT investment and Islamic banking performance in Indonesia: do sukuk issuance and shariah governance matter?
title_short IT investment and Islamic banking performance in Indonesia: do sukuk issuance and shariah governance matter?
title_full IT investment and Islamic banking performance in Indonesia: do sukuk issuance and shariah governance matter?
title_fullStr IT investment and Islamic banking performance in Indonesia: do sukuk issuance and shariah governance matter?
title_full_unstemmed IT investment and Islamic banking performance in Indonesia: do sukuk issuance and shariah governance matter?
title_sort it investment and islamic banking performance in indonesia: do sukuk issuance and shariah governance matter?
publisher Business Perspectives
publishDate 2023
url http://irep.iium.edu.my/104761/3/104761_IT%20investment%20and%20Islamic%20banking%20performance%20in%20Indonesia.pdf
http://irep.iium.edu.my/104761/9/104761_IT%20investment%20and%20Islamic%20banking%20performance%20in%20Indonesia_SCOPUS.pdf
http://irep.iium.edu.my/104761/
https://www.businessperspectives.org/index.php/journals/banks-and-bank-systems
http://dx.doi.org/10.21511/bbs.18(2).2023.07
_version_ 1800081756673540096
score 13.211869

Similar Items