The Influence of Macroeconomic Factors on Indonesian Banking Performance (In Buku 3 and Buku 4 of 2012-2017 Period) (Published)
Banks should have adequate capacity, especially in holding capital, to be able to manage risks. In its development, the requirements of capital’s components and instruments as well as the calculation of bank capital adequacy need to be adjusted to the international standard. Strong capital will make banks healthier and more competitive in the face of the competition from major banks in the ASEAN region and globally. Therefore, the Financial Services Authority (OJK) issued a number of regulations so that the national banking industry is stronger and more trustworthy by the public. The rule is the OJK Regulation (POJK) Number 6/POJK.03/2016 concerning Business Activities and Office Networks Based on the Core Capital. In 2012, the dynamics of the global economy set a negative trend and began to have an impact on the Asian economies, such as Indonesia. In this study, the focus was on the improvement in banking risk indicators that occurred to evaluate the performance of banks by using CAR, ROA, NIM, LDR and NPL variables, and analyze macroeconomic factors such as inflation, interest rates, exchange rates, and GDP. This study aims to describe the performance of banking in Bank Umum Kegiatan Usaha 3 and 4 (BUKU 3 and BUKU 4) consist of NIM, NPL, CAR, ROA, and LDR and analyze the response of macroeconomic variables to banking performance in banks in BUKU 3 and BUKU 4. The method used was the VECM estimation model that was then analyzed with the Impulse Response Function (IRF) and Forecast Error Decomposition of Variance (FEVD). The results of the research on banking performance, if it was grouped based on bank business activities in BUKU 3 and BUKU 4, showed that overall bank performance in BUKU 4 was better than which was in BUKU 3. The result of bank IRF and FEVD in BUKU 3 was that the macroeconomic variable that provide the greatest response and contribution was interest rates. While the result of bank IRF and FEVD in BUKU 4 was that the macroeconomic variable that gave the biggest response and contribution was inflation.
Keywords: Indonesia Banking Performance, Macroeconomic, Panel Data, VECM
AN EMPIRICAL ASSESSMENT OF THE MACROECONOMIC EFFECT OF A SHIFT FROM INDIRECT TO DIRECT TAXES IN COTE D’IVOIRE (Published)
This paper examines the long-run effect of a shift from indirect to direct taxes for Cote d’Ivoire using data for the period 1960 to 2006. The residual-based test of Gregory and Hansen (1996) is employed to test for cointegration and the Engle-Yoo (1987) three-step procedure is used to estimate the long-run effect of tax variables on real output. The results reveal that tax burden and tax mix are negatively associated with output, with tax burden having a much greater adverse effect on GDP than tax mix. The effect of the tax mix on GDP is contingent on the level of the tax burden and diminishes as tax burden increases. Our estimates also suggest that up to a threshold level of tax burden of 17.57%, increased direct taxation relative to indirect taxation is associated with decreased output. But beyond this threshold a move from indirect to direct taxes is likely to lead to higher levels of output.
Keywords: Cote d’Ivoire, Direct, Indirect, Macroeconomic, Taxes