THE INFLUENCE OF FIRM SIZE, CAPITAL ADEQUACY, AND PROFITABILITY ON LIQUIDITY RISK MANAGEMENT OF INDONESIA ISLAMIC BANKING
Universitas Gunadarma
Indonesia
Abstract
One of the problems facing sharia banking is liquidity risk management. Liquidity risk management in Islamic banking faces greater challenges because they need to be in accordance with Sharia. This research aims to determine the influence of firm size, capital adequacy, and profitability with return on asset and return on equity as proxies, on Indonesian Islamic banking liquidity risk management which is listed in Bank Indonesia in the period 2010-2014. This research uses panel data from eleven Islamic banks. The dependent variable in this research is liquidity risk and the independent variables are firm size, capital adequacy, and profitability with return on asset and return on equity as proxies. The method of analysis in this research uses descriptive statistics, regression model selection, classic assumption test, and hypothesis test. The results show that firm size, capital adequacy, and profitability with return on asset and return on equity as proxies simultaneously affect liquidity risk management, where partially return on equity does not affect liquidity risk management.
Keywords
References
Abdullah, Asim., and Khan, Abdul Qayyum. (2012). “Liquidity Risk Management: A Comparative Study between Domestic and Foreign Banks in Pakistan” Journal of Managerial Sciences, 6 (1), 61-72.
Ahmed, Naveed., Akhtar, Muhammad Farhan., and Usman, Muhammad. (2011). “Risk Management Practices and Islamic Banks: An Empirical Investigation from Pakistan”, Interdisciplinary Journal of Research in Business, 1(6), 50-57.
Ariffin, Noraini Mohd. (2012). “Liquidity Risk Management and Financial Performance in Malaysia: Empirical Evidence from Islamic Banks”, Aceh International Journal of Social Sciences, 1(2), 77-84.
Ayub, Muhammad. (2007). Understanding Islamic Finance: A-Z Keuangan Syariah. Jakarta: PT. Gramedia Pustaka Utama.
Eliskovski, Milan. (2014). “The Determinants of Capital Buffer in the Macedonian Banking Sector”, JCEBI, 1(2), 19-33.
Ghozali, Imam. (2013). Aplikasi Analisis Multivariate dengan Program IBM SPSS 21 Update PLS Regresi, edisi 7. Semarang: Badan Penerbit Universitas Diponegoro.
Gujarati, Damodar N., and Porter Dawn C. (2012). Dasar-Dasar Ekonometrika.
Jakarta: Salemba Empat.
Iqbal, Anjum. (2012). “Liquidity Risk Management: A Comparative Study
between Conventional and Islamic Bank of Pakistan”, Global Journal of Management and Business Research, 12 (5), 54-64.
Ismal, Rifki. (2011). The Indonesian Islamic Banking: Theory and Practices. Depok: Gramedia Publishing.
Niresh, J. Aloy. (2012). “Trade-Off between Liquidity and Profitability: A Study of Selected Manufacturing Firms in Sri Lanka”, International Refereed Research Journal, 3(4).
Obaidullah, Mohammed. (2015). “Islamic Risk Management: Towards Greater Ethics and Efficiency”, International Journal of
Islamic Financial Services, 3(4).
Pervan, Maja., and Visic, Josipa. (2012). “Influence of Firm Size on Its Business
Success” Croatian Operational Research Review, Vol. 3, 213-223.
Ramzan, Muhammad., and Zafar, Muhammad Imran. (2014). “Liquidity Risk Management in Islamic Banks: A Study of Islamic Banks of Pakistan”, Interdisciplinary Journal of Contemporary Research in Business, 5(12), 199-215.
Siringoringo, Renniwaty. (2012). “Karakteristik dan Fungsi Intermediasi Perbankan Indonesia”, Buletin Ekonomi Moneter dan Perbankan, July 2012, 61-83.
Wimelda, L., & Marlinah, A. (2013). Variabelvariabel yang mempengaruhi struktur modal pada perusahaan publik sektor non keuangan. Media Bisnis, 5(3), 200–213.
Fakultas Ekonomi Universitas Gunadarma
