Presenters: Dwi Kurniawan, Dita Andraeny
Affiliation: Raden Mas Said State Islamic University Surakarta
Room: 11
ICIES News- At the 4th International Conference on Islamic Economics Studies (ICIES) 2024, Dwi Kurniawan and Dita Andraeny from Raden Mas Said State Islamic University Surakarta presented their research on “Determinants of Liquidity of Islamic Commercial Banks in Indonesia.” Held in Room 11, their study focused on analyzing the factors influencing liquidity in Islamic commercial banks over the period from 2017 to 2022.
The research aimed to explore how various factors—profit-sharing financing, capital adequacy ratio, profitability, financing risk, and bank size—affect the liquidity of Islamic commercial banks in Indonesia. The study used a sample of 10 Islamic commercial banks, selected through purposive sampling. Data analysis was conducted using the Generalized Method of Moments with STATA software version 17.
Key findings from the presentation include:
- Profitability: The study found that profitability has a positive and significant effect on the liquidity of Islamic commercial banks. This indicates that banks with higher profitability tend to have better liquidity.
- Other Factors: Contrary to expectations, profit-sharing financing, capital adequacy ratio, financing risk, and bank size were found to have no significant effect on liquidity. This suggests that these factors do not play a crucial role in determining liquidity for Islamic commercial banks in Indonesia.
The research provides valuable insights into the dynamics of liquidity within Islamic banking institutions. It highlights the importance of profitability in maintaining liquidity while questioning the influence of other traditional financial metrics.
Kurniawan and Andraeny’s findings offer a nuanced understanding of liquidity determinants in Islamic banking, emphasizing the need for further investigation into how various financial practices and characteristics impact liquidity in the sector. Their work contributes to the broader discussion on financial stability and efficiency within Islamic banking in Indonesia.